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🏥 '''Medicaid managed care''' is a healthcare delivery and financing model in which state [[Definition:Medicaid | Medicaid]] programs contract with [[Definition:Managed care organization (MCO) | managed care organizations]] to coordinate and provide benefits to eligible enrollees, rather than reimbursing providers on a traditional [[Definition:Fee-for-service | fee-for-service]] basis. In the insurance context, these arrangements represent a massive segment of the [[Definition:Health insurance | health insurance]] market — the majority of Medicaid beneficiaries across the United States now receive their coverage through some form of managed care plan. Insurers and health plans that participate as MCOs accept [[Definition:Capitation | capitated]] payments from the state in exchange for assuming [[Definition:Financial risk | financial risk]] for the cost of covered services.

⚙️ Under a typical arrangement, a state agency awards contracts to one or more MCOs through a competitive procurement process. Each MCO receives a fixed [[Definition:Per member per month (PMPM) | per member per month]] payment and, in return, builds and manages a [[Definition:Provider network | provider network]], handles [[Definition:Claims processing | claims processing]], conducts [[Definition:Utilization management | utilization management]], and ensures enrollees receive medically necessary care. The MCO bears [[Definition:Underwriting risk | underwriting risk]]: if actual medical costs exceed the capitated revenue, the plan absorbs the loss, though many state contracts include [[Definition:Risk corridor | risk corridors]] or [[Definition:Risk adjustment | risk adjustment]] mechanisms to temper extreme outcomes. [[Definition:Actuarial analysis | Actuarial analysis]] plays a central role in setting capitation rates that are both adequate for the MCO and sustainable for the state budget.

💡 The significance of Medicaid managed care for the insurance industry can hardly be overstated. Several of the nation's largest [[Definition:Insurance carrier | insurers]] — including UnitedHealth Group, Centene, and Molina Healthcare — derive substantial portions of their revenue from Medicaid MCO contracts. For [[Definition:Insurtech | insurtech]] companies, the space offers opportunities in [[Definition:Care management | care management]] technology, [[Definition:Data analytics | data analytics]] for population health, and [[Definition:Fraud detection | fraud detection]]. Regulatory complexity is high: MCOs must comply with both federal requirements under the Centers for Medicare & Medicaid Services and state-specific rules, making [[Definition:Regulatory compliance | compliance]] infrastructure a critical differentiator. As states continue to expand managed care into long-term services and supports and behavioral health, the competitive landscape for insurers in this segment keeps evolving.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Managed care organization (MCO)]]
* [[Definition:Capitation]]
* [[Definition:Medicaid]]
* [[Definition:Medical loss ratio (MLR)]]
* [[Definition:Risk adjustment]]
* [[Definition:Utilization management]]
{{Div col end}}

Definition:Medicaid managed care - Revision history

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