Medicaid Contract Purchasing Specifications

Provider Reimbursement by MCOs

There are two broad categories of payment issues in contracts between MCOs (or BHOs) and state Medicaid agencies: (1) those relating to the determination of capitation rates paid to MCOs by state purchasers on behalf of enrolled children; and (2) those relating to payment methodologies used by MCOs with respect to network and out-of-network providers serving enrolled children. The pediatric purchasing specifications listed below contain provisions addressing the issues in category (2). The illustrative language does not specify payment amounts for particular procedures. Instead, the language addresses issues such as the timeliness of payment, allowable financial risk, and minimum payment standards. In the case of network providers, these issues are framed through specifications for written agreements between the providers and the MCO. In the case of out-of-network providers, various reference rates are suggested. For information about issues in category (1), see Payment to MCOs and BHOs, below.

Purchasing Specification	Related Contract Language
CD	§101(e) (other contractor duties)
CW	§112 (payment issues commentary)
CBHN	Chapter I (prime/prime):‡ §205(f) (participating providers) §205(d) (out-of-network providers) Part 3 (payment issues commentary) Chapter II (prime/subprime):‡ §210(f) (participating providers) §210(d) (out-of-network providers)
CSHCN	§204(i) (participating providers) §204(f) (out-of-network providers) Part 3 (payment issues commentary)
DENTAL	§203(b) (payment to publicly assisted providers)
IMMUN	§006(a) (payment to out-of-network providers)
MEDIPED	§005(e) (payment to out-of-network emergency providers) §005(f) (payment to out-of-network public health providers) §501(b) (written agreements with participating providers) §508(c) (payment to traditional Medicaid providers) §509(b) (payment to FQHCs and RHCs) §510(c) (payment to out-of-network providers) §1103 (payment for non-VFC immunizations)
SBHC	§101B (payment to out-of-network SBHCs) §102C(i) (payment to subcontracting SBHCs) §104C(g)(4) (payment to subcontracting SBHCs)
SCHIP	§005(e) (payment to out-of-network emergency providers) §005(f) (payment to out-of-network public health providers) §508(c) (payment to traditional providers) §509(c) (payment to out-of-network providers)

‡The "prime/prime" arrangement has two primary contractors—the MCO and the BHO—to which the state purchaser makes capitation payments. Under this arrangement, a child is enrolled in both the MCO and the BHO. The "prime/subprime" arrangement involves one primary contractor and a subcontractor. The state purchaser contracts with and makes capitation payments to an MCO; the MCO, in turn, subcontracts with the BHO for the provision of behavioral health services.

ACCESS = Access to Services (July 2000)
CD = Child Development Services (July 2000)
CW = Child Welfare (December 2001)
CBHN = Children with Behavioral Health Needs (December 2000)
CSHCN = Children with Special Health Care Needs (August 2000)
CC = Cultural Competence (Updated, November 2001)
DENTAL = Dental and Oral Pediatric Health Services (March 2000)
IMMUN = Immunizations (May 1998)
LEAD = Childhood Lead Poisoning Services (November 1998)
MEDIPED = Medicaid Pediatric Services (September 1999)
SBHC = School-Based Health Center Services (January 2002)
SCHIP = SCHIP Pediatric Services (April 2002)