Frequently Asked Questions
What is Medicaid?
Medicaid and the Children's Health Insurance Program (CHIP) provide health coverage for low-income children, families, seniors, and people with disabilities.
Without Medicaid coverage, more Texans would be uninsured and seek care from costly emergency rooms. Medicaid and CHIP coverage ensures Texans have access to doctor visits, prescription drugs, transportation to health care visits, and mental health and other health care services.
See HHSC’s Medicaid and CHIP Reference Guide for more information.
What is Medicaid managed care?
Texas, like most states, contracts with health plans (or Managed Care Organizations, MCOs) to administer the Medicaid program just like a traditional health insurance program. This delivery system is called Medicaid managed care. It allows the state to leverage the innovation and systems of private health insurance companies to improve the health of Medicaid members, contain costs for Texas taxpayers, and coordinate care.
Medicaid managed care has saved Texas over $13 billion in savings, improved patient care, and improved quality of care in Texas.
97%
of Texas Medicaid enrollees receive services through Texas Medicaid
In this system, a Texas Medicaid member picks a health plan and receives Medicaid services through that health plan's network of providers. Most health plans offer Medicaid members extra services (value added services) not available through traditional Medicaid. Every month, the state pays each MCO a premium — a fixed amount per each person enrolled in their managed care plan.
In exchange for this per-member per-month rate, MCOs must handle a range of functions, including providing all medically necessary services, developing a provider network, paying providers for covered services received by their enrollees, and engaging with enrollees to coordinate care.
Texas has five Medicaid managed care programs that are administered by sixteen MCOs and three dental maintenance organizations (DMOs).
How does Texas hold MCOs accountable?
Texas takes oversight seriously and is known to have one of the most robust managed care contracts in the country.
The State closely monitors health plans to ensure taxpayer dollars are used appropriately and every Medicaid member receives the services they need to stay healthy. The Texas Health and Human Services Commission (HHSC) has a contract with each managed care plan and provides handbooks and manuals that outline every expectation, requirement, deliverable and prohibition for health plans. To monitor compliance with the contract, HHSC has dedicated contract compliance teams and tools that monitor health plan performance and ensure that health plans deliver quality, cost-effective services.
HHSC monitors health plan performance, quality of care, and member satisfaction. HHSC collects data from several sources to support its quality initiatives. The broad range of data available includes measures like disease prevention, chronic disease management, behavioral health, maternal health and preventable hospitalizations, and member and provider experience.
HHSC also uses the following programs to hold MCOs accountable for continuous improvement in quality of care for members.
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Health Plan AccreditationThe Texas Legislature requires all contracted Medicaid health plans to achieve national accreditation. Accreditation means that an independent, nationally recognized organization has validated a plan’s performance. In Texas, health plans must be accredited by the NCQA or URAC.
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Pay for Quality ProgramA program that creates financial incentives and disincentives for MCOs based on their performance on certain quality measures. Health plans that excel in meeting the at-risk measures and bonus measures may be eligible for additional funds. Health plans that don’t meet their at-risk measures can lose up to 3% of their premium.
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Managed Care Report CardsHHSC develops annual MCO report cards for each program service area. Report cards include quality measures such as “Babies get regular checkups”, “Doctors listen carefully, explain clearly and spend enough time with people”, and “People get care for diabetes”. Members can use these report cards to compare MCOs and inform their decision when choosing a plan to enroll in. However, report cards only account for 10% of measures HHSC uses to assess MCO quality and performance.
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Medicaid Value Based EnrollmentThe Texas Legislature directed HHSC to create an incentive program that automatically enrolls a greater percentage of Medicaid recipients who have not selected a health plan into a plan based on quality of care, efficiency, and effectiveness of service provision and performance. Accordingly, HHSC developed a value-based enrollment methodology that incorporates results from key cost, quality, and member satisfaction metrics into the existing method. MCOs with better performance than other MCOs on selected performance measures receive a higher share of enrollments.
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Appointment AvailabilityHHSC uses appointment availability studies to monitor the length of time a managed care member must wait between scheduling an appointment with a provider and receiving treatment from a provider.
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Performance Improvement ProjectsHHSC determines topics for PIPs based on health plan performance. Health plans create a PIP plan, report on their progress annually and provide a final report. HHSC requires each health plan to conduct two PIPs per program. Each PIP is for a two-year term and they are implemented on a staggered schedule so that one PIP per program is being implemented each calendar year.
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Value Based Care or Alternative Payment ModelsThe state's contract with MCOs requires these entities to develop alternative payment models (APMs) between them and their health care providers to encourage innovation, quality improvement and efficiency. The goal is to focus on quality of care and not on volume, within a value-based care (VBC) and associated value-based payment (VBP) system.