Home
gpo.gov
govinfo.gov

e-CFR Navigation Aids

Browse

Simple Search

Advanced Search

 — Boolean

 — Proximity

 

Search History

Search Tips

Corrections

Latest Updates

User Info

FAQs

Agency List

Incorporation By Reference

eCFR logo

Related Resources

Electronic Code of Federal Regulations

We invite you to try out our new beta eCFR site at https://ecfr.federalregister.gov. We have made big changes to make the eCFR easier to use. Be sure to leave feedback using the Feedback button on the bottom right of each page!

e-CFR data is current as of April 16, 2021

Title 42Chapter IVSubchapter DPart 457 → Subpart L


Title 42: Public Health
PART 457—ALLOTMENTS AND GRANTS TO STATES


Subpart L—Managed Care


Contents

General Provisions

§457.1200   Basis, scope, and applicability.
§457.1201   Standard contract requirements.
§457.1203   Rate development standards and medical loss ratio.
§457.1206   Non-emergency medical transportation PAHPs.
§457.1207   Information requirements.
§457.1208   Provider discrimination prohibited.
§457.1209   Requirements that apply to MCO, PIHP, PAHP, PCCM, and PCCM entity contracts involving Indians, Indian health care provider (IHCP), and Indian managed care entities (IMCE).

State Responsibilities

§457.1210   Enrollment process.
§457.1212   Disenrollment.
§457.1214   Conflict of interest safeguards.
§457.1216   Continued services to enrollees.
§457.1218   Network adequacy standards.

Enrollee Rights and Protections

§457.1220   Enrollee rights.
§457.1222   Provider-enrollee communication.
§457.1224   Marketing activities.
§457.1226   Liability for payment.
§457.1228   Emergency and poststabilization services.

MCO, PIHP, and PAHP Standards

§457.1230   Access standards.
§457.1233   Structure and operation standards.

Quality Measurement and Improvement; External Quality Review

§457.1240   Quality measurement and improvement.
§457.1250   External quality review.

Grievance System

§457.1260   Grievance system.

Sanctions

§457.1270   Sanctions.
§457.1280   Conditions necessary to contract as an MCO, PAHP, or PIHP.
§457.1285   Program integrity safeguards.

Source: 81 FR 27897, May 6, 2016, unless otherwise noted.

return arrow Back to Top

General Provisions

return arrow Back to Top

§457.1200   Basis, scope, and applicability.

(a) Statutory basis. This subpart implements the following sections of the Act:

(1) Section 2101(a) of the Act, which provides that the purpose of Title XXI is to provide funds to States to enable them to initiate and expand the provision of child health assistance to uninsured, low-income children in an effective and efficient manner.

(2) Section 2103(f)(3) and 2107(e)(1)(M) of the Act, which apply certain provisions of Title XIX related to Medicaid managed care to CHIP.

(3) Sections 2107(b) and 2107(e)(2) of the Act, which relate to program integrity.

(b) Scope. This subpart sets forth requirements for the provision of services through MCOs, PIHPs, PAHPs, and PCCM entities, as defined in §457.10.

(c) Applicability. The requirements of this subpart apply to child health assistance provided under a separate child health program operating a managed care delivery system. Regulations relating to managed care that are applicable to a Medicaid expansion program are found at part 438 of this chapter.

return arrow Back to Top

§457.1201   Standard contract requirements.

(a) CMS review. The State must submit all MCO, PAHP, PIHP, PCCM, and PCCM entity contracts for review in the form and manner established by CMS.

(b) Entities eligible for comprehensive risk contracts. The State may enter into a comprehensive risk contract only with the entities specified in §438.3(b)(1) through (3) of this chapter.

(c) Payment. The final capitation rates for all MCO, PIHP or PAHP contracts must be identified and developed, and payment must be made in accordance with §438.3(c) of this chapter, except that the requirement for preapproval of contracts does not apply, and contract rates must be submitted to CMS upon request of the Secretary.

(d) Enrollment discrimination prohibited. Contracts with MCOs, PAHPs, PIHPs, PCCMs and PCCM entities must comply with prohibitions on enrollment discrimination in accordance with §438.3(d) of this chapter, except that §438.3(d)(2) of this chapter (related to voluntary enrollment) does not apply.

(e) Services that may be covered by an MCO, PIHP, or PAHP. An MCO, PIHP, or PAHP may cover, for enrollees, services that are not covered under the State plan in accordance with §438.3(e) of this chapter.

(f) Compliance with applicable laws and conflict of interest safeguards. Contracts with MCOs, PAHPs, PIHPs, PCCMs or PCCM entities must comply with Federal laws and regulations in accordance with §438.3(f) of this chapter.

(g) Inspection and audit of records and access to facilities. Contracts with MCOs, PIHPs, PAHPs, PCCMs or PCCM entities must allow for the inspection and audit of records and access to facilities in accordance with §438.3(h) of this chapter.

(h) Physician incentive plans. If a contract with an MCO, PAHP, or PIHP provides for a physician incentive plan, it must comply with §438.3(i) of this chapter (which cross references §§422.208 and 422.210 of this chapter).

(i) Subcontractual relationships and delegations. The state must ensure, through its contracts with MCOs, PIHPs, and PAHPs, that any contract or written agreement that the MCO, PIHP, or PAHP has with any individual or entity that relates directly or indirectly to the performance of the MCOs, PIHPs, or PAHPs obligations under its contract comply with §457.1233(b) (which cross references §438.230 of this chapter).

(j) Choice of network provider. The contract must allow each enrollee to choose his or her network provider in accordance with §438.3(l) of this chapter.

(k) Audited financial reports. Contracts with MCOs, PAHPs, and PIHPs must comply with the requirements for submission of audited financial reports in §438.3(m) of this chapter.

(l) Parity in mental health and substance use disorder benefits. Contracts with MCOs, PAHPs, and PIHPs must comply with the requirements of §457.496.

(m) Additional rules for contracts with PCCMs. Contracts with PCCMs must comply with the requirements of §438.3(q) of this chapter, except that the right to disenroll is in accordance with §457.1212.

(n) Additional rules for contracts with PCCM entities. (1) States must submit PCCM entity contracts to CMS for review.

(2) Contracts with PCCMs must comply with the requirements of paragraph (o) of this section; §457.1207; §457.1240(b) (cross-referencing §438.330(b)(2), (b)(3), (c), and (e) of this chapter); §457.1240(e) (cross-referencing §438.340 of this chapter); and §457.1250(a) (cross-referencing §438.350 of this chapter).

(o) Attestations. Contracts with MCO, PAHP, PIHP, PCCM or PCCM entities must include an attestation to the accuracy, completeness, and truthfulness of claims and payment data, under penalty of perjury.

(p) Guarantee not to avoid costs. Contracts with an MCO, PAHP, PIHP, PCCM or PCCM entities must include a guarantee that the MCO, PAHP, PIHP, PCCM or PCCM entity will not avoid costs for services covered in its contract by referring enrollees to publicly supported health care resources.

(q) Recordkeeping requirements. Contracts with MCOs, PIHPs, and PAHPs, must comply with the recordkeeping requirements of §438.3(u) of this chapter.

[81 FR 27897, May 6, 2016, as amended at 82 FR 40, Jan. 3, 2017]

return arrow Back to Top

§457.1203   Rate development standards and medical loss ratio.

(a) A state must use payment rates based on public or private payment rates for comparable services for comparable populations, consistent with actuarially sound principles as defined at §457.10. This requirement for using actuarially sound principles to develop payment rates does not prohibit a state from implementing value-based purchasing models for provider reimbursement, such as pay for performance arrangements, bundled payments, or other service payment models intended to recognize value or outcomes over volume of services; such alternate payment models should be developed using actuarially sound principles to the extent applicable.

(b) A State may establish higher rates than permitted under paragraph (a) of this section if such rates are necessary to ensure sufficient provider participation or provider access or to enroll providers who demonstrate exceptional efficiency or quality in the provision of services.

(c) The rates must be designed to reasonably achieve a medical loss ratio standard, calculated in accordance with the provisions of §438.8 of this chapter, that—

(1) Is equal to at least 85 percent for the rate year; and

(2) Provides for reasonable administrative costs.

(d) The State must provide to CMS, if requested, a description of the manner in which rates were developed in accordance with the requirements of paragraphs (a), (b), or (c) of this section.

(e) The state must comply with the requirements related to medical loss ratios in accordance with the terms of §438.74 of this chapter, except that the description of the reports received from the MCOs, PIHPs and PAHPs under §438.8(k) of this chapter will be submitted independently, and not with the actuarial certification described in §438.7 of this chapter.

(f) The state must ensure, through its contracts, that each MCO, PIHP, and PAHP complies with the requirements §438.8 of this chapter.

[81 FR 27897, May 6, 2016, as amended at 82 FR 40, Jan. 3, 2017]

return arrow Back to Top

§457.1206   Non-emergency medical transportation PAHPs.

(a) For purposes of this section Non-Emergency Medical Transportation (NEMT) Prepaid Ambulatory Health Plan (PAHP) means an entity that provides only NEMT services to enrollees under contract with the State, and on the basis of prepaid capitation payments, or other payment arrangements that do not use State plan payment rates.

(b) The following requirements and options apply to NEMT PAHPs, NEMT PAHP contracts, and States in connection with NEMT PAHPs, to the same extent that they apply to PAHPs, PAHP contracts, and States in connection with PAHPs.

(1) All contract provisions in §457.1201 except those set forth in §457.1201(h) (related to physician incentive plans) §457.1201(l) (related to mental health parity).

(2) The information requirements in §457.1207.

(3) The provision against provider discrimination in §457.1208.

(4) The State responsibility provisions in §§457.1212 and 457.1214, and §438.62(a) of this chapter, as cross-referenced in §457.1216.

(5) The provisions on enrollee rights and protections in §§457.1220, 457.1222, 457.1224, and 457.1226.

(6) The PAHP standards in §438.206(b)(1) of this chapter, as cross-referenced by §§457.1230(a), 457.1230(d), and 457.1233(a), (b) and (d).

(7) An enrollee's right to a State review under subpart K of this part.

(8) Prohibitions against affiliations with individuals debarred or excluded by Federal agencies in §438.610 of this chapter, as cross referenced by §457.1285.

(9) Requirements relating to contracts involving Indians, Indian Health Care Providers, and Indian managed care entities in §457.1209.

return arrow Back to Top

§457.1207   Information requirements.

The State must provide, or ensure its contracted MCO, PAHP, PIHP, PCCM, and PCCM entities provide, all enrollment notices, informational materials, and instructional materials related to enrollees and potential enrollees in accordance with the terms of §438.10 of this chapter, except that the terms of §438.10(c)(2), (g)(2)(xi)(E), and (g)(2)(xii) of this chapter do not apply.

[85 FR 72842, Nov. 13, 2020]

return arrow Back to Top

§457.1208   Provider discrimination prohibited.

The state must ensure through its contracts that each MCO, PIHP, and PAHP follow the requirements related to the prohibition on provider discrimination in §438.12 of this chapter.

return arrow Back to Top

§457.1209   Requirements that apply to MCO, PIHP, PAHP, PCCM, and PCCM entity contracts involving Indians, Indian health care provider (IHCP), and Indian managed care entities (IMCE).

The State must follow, and ensure through its contracts, that each MCO, PIHP, PAHP, PCCM, and PCCM entity follows, the requirements related to Indians, IHCPs, and IMCEs in accordance with the terms of §438.14 of this chapter.

return arrow Back to Top

State Responsibilities

return arrow Back to Top

§457.1210   Enrollment process.

(a) Default enrollment process. (1) If a state uses a default enrollment process to assign beneficiaries to a MCO, PIHP, PAHP, PCCM, or PCCM entity, the process must:

(i) Assign beneficiaries to a qualified MCO, PIHP, PAHP, PCCM or PCCM entity. To be qualified, the MCO, PIHP, PAHP, PCCM or PCCM entity must:

(A) Not be subject to the intermediate sanction described in §438.702(a)(4) of this chapter.

(B) Have capacity to enroll beneficiaries.

(ii) Maximize continuation of existing provider-beneficiary relationships. An “existing provider-beneficiary relationship” is one in which the provider was the main source of CHIP services for the beneficiary during the previous year. This may be established through State records of previous managed care enrollment or fee-for-service experience, encounter data, or through contact with the beneficiary.

(iii) If the approach in paragraph (a)(1)(ii) of this section is not possible, the State must distribute the beneficiaries equitably among the MCOs, PIHPs, PAHPs, PCCMs and PCCM entities. The State may not arbitrarily exclude any MCO, PIHP, PAHP, PCCM or PCCM entity from being considered.

(2) The State may consider additional reasonable criteria to conduct the default enrollment process, including the previous plan assignment of the beneficiary, quality assurance and improvement performance, procurement evaluation elements, accessibility of provider offices for people with disabilities (when appropriate), and other reasonable criteria that support the objectives of the managed care program.

(3) The State must send a confirmation of the enrollee's managed care enrollment to the enrollee within 5 calendar days of the date such enrollment is processed by the State. The confirmation must clearly explain the enrollee's right to disenroll within 90 days from the effective date of the enrollment.

(b) Priority for enrollment. The state must have an enrollment system under which beneficiaries already enrolled in an MCO, PIHP, PAHP, PCCM, or PCCM entity are given priority to continue that enrollment if the MCO, PIHP, PAHP, PCCM, or PCCM entity does not have the capacity to accept all those seeking enrollment under the program.

(c) Informational notices. A State must provide an informational notice to each potential enrollee who may enroll in an MCO, PIHP, PAHP, PCCM, or PCCM entity. Such notice must:

(1) Include the MCOs, PIHPs, PAHPs, PCCMs, or PCCM entities available to the potential enrollee;

(2) Explain how to select an MCO, PIHP, PAHP, PCCM, or PCCM entity;

(3) Explain the implications of making or not making an active choice of an MCO, PIHP, PAHP, PCCM or PCCM entity;

(4) Explain the length of the enrollment period as well as the disenrollment policies in §457.1212; and

(5) Comply with the information requirements in §457.1207 and accessibility standards established under §457.340.

[81 FR 27897, May 6, 2016, as amended at 82 FR 40, Jan. 3, 2017]

return arrow Back to Top

§457.1212   Disenrollment.

The State must comply with and ensure, through its contracts, that each MCO, PAHP, PIHP, PCCM and PCCM entity complies with the disenrollment requirements in accordance with the terms of §438.56 of this chapter, except that references to fair hearings should be read to refer to reviews as described in subpart K of this part.

return arrow Back to Top

§457.1214   Conflict of interest safeguards.

The State must have in effect safeguards against conflict of interest in accordance with the terms of §438.58 of this chapter, except that references to §438.54(b) should be read to refer to the enrollment processes described in §457.1210(a).

[82 FR 40, Jan. 3, 2017]

return arrow Back to Top

§457.1216   Continued services to enrollees.

The State must follow the requirements related to continued services to enrollees in accordance with the terms of §438.62 of this chapter.

return arrow Back to Top

§457.1218   Network adequacy standards.

The State must develop network adequacy standards in accordance with the terms of §438.68 of this chapter, and, ensure through its contracts, that each MCO, PAHP, and PIHP meets such standards.

return arrow Back to Top

Enrollee Rights and Protections

return arrow Back to Top

§457.1220   Enrollee rights.

The State must ensure, through its contracts, that each MCO, PIHP, PAHP, PCCM, and PCCM entity follow the enrollee rights requirements in accordance with the terms of §438.100 of this chapter.

return arrow Back to Top

§457.1222   Provider-enrollee communication.

The State must ensure, through its contracts, that each MCO, PIHP, and PAHP protects communications between providers and enrollees in accordance with the terms of §438.102 of this chapter.

return arrow Back to Top

§457.1224   Marketing activities.

The State must ensure, through its contracts, that each MCO, PIHP, PAHP, PCCM, and PCCM entity follows the requirements related to marketing activities in accordance with the terms of §438.104 of this chapter, except §438.104(c) of this chapter related to state agency review does not apply.

return arrow Back to Top

§457.1226   Liability for payment.

The State must ensure, through its contracts, that enrollees of MCOs, PIHPs, and PAHPs are not held liable for services or debts of the MCO, PIHP, or PAHPs in accordance with the terms of §438.106 of this chapter.

return arrow Back to Top

§457.1228   Emergency and poststabilization services.

The State must ensure that emergency and poststabilization care services are available and accessible to enrollees in accordance with the terms of §438.114 of this chapter.

[82 FR 40, Jan. 3, 2017]

return arrow Back to Top

MCO, PIHP, and PAHP Standards

return arrow Back to Top

§457.1230   Access standards.

(a) Availability of services. The State must ensure that the services are available and accessible to enrollees in accordance with the terms of §438.206 of this chapter.

(b) Assurances of adequate capacity and services. The State must ensure, through its contracts, that each MCO, PIHP and PAHP has adequate capacity to serve the expected enrollment in accordance with the terms of §438.207 of this chapter.

(c) Coordination and continuity of care. The State must ensure, through its contracts, that each MCO, PIHP and PAHP complies with the coordination and continuity of care requirements in accordance with the terms of §438.208 of this chapter, except that the applicability date in §438.208(d) does not apply.

(d) Coverage and authorization of services. The State must ensure, through its contracts, that each MCO, PIHP or PAHP complies with the coverage and authorization of services requirements in accordance with the terms of §438.210 of this chapter, except that the following do not apply: §438.210(a)(5) of this chapter (related to medical necessity standard); §438.210(b)(2)(iii) of this chapter (related to authorizing LTSS), and §438.210(f) (relating to the applicability date).

[81 FR 27897, May 6, 2016, as amended at 82 FR 40, Jan. 3, 2017]

return arrow Back to Top

§457.1233   Structure and operation standards.

(a) Provider selection. The State must ensure, through its contracts, that each MCO, PIHP or PAHP complies with the provider selection requirements as provided in §438.214 of this chapter.

(b) Subcontractual relationships and delegation. The State must ensure, through its contracts, that each MCO, PIHP, PAHP, and PCCM entity complies with the subcontractual relationships and delegation requirements as provided in §438.230 of this chapter.

(c) Practice guidelines. The state must ensure, through its contracts, that each MCO and, when applicable, each PIHP and PAHP, complies with the practice guidelines requirements as provided in §438.236 of this chapter.

(d) Health information systems. The State must ensure, through its contracts, that each MCO, PIHP, and PAHP complies with the health information systems requirements as provided in §438.242 of this chapter, except that the applicability date in §438.242(e) of this chapter does not apply. The State is required to submit enrollee encounter data to CMS in accordance with §438.818 of this chapter.

(e) Privacy protections. The state must ensure, through its contracts, that each MCO, PIHP, and PAHP complies with the privacy protections as provided in §457.1110.

[81 FR 27897, May 6, 2016, as amended at 82 FR 40, Jan. 3, 2017; 85 FR 25637, May 1, 2020; 85 FR 72842, Nov. 13, 2020]

return arrow Back to Top

Quality Measurement and Improvement; External Quality Review

return arrow Back to Top

§457.1240   Quality measurement and improvement.

(a) Scope. This section sets forth requirements related to quality assessment and performance improvement that the State must meet in contracting with an MCO, PIHP, PAHP, or certain PCCM entities.

(b) Quality assessment and performance improvement program. (1) The State must require, through its contracts, that each MCO, PIHP, and PAHP establish and implement an ongoing comprehensive quality assessment and performance improvement program for the services it furnishes to its enrollees, in accordance with the requirements and standards in §438.330 of this chapter, except that the terms of §438.330(d)(4) of this chapter (related to dually eligible beneficiaries) do not apply.

(2) In the case of a contract with a PCCM entity described in paragraph (f) of this section, §438.330(b)(2) and (3), (c), and (e) of this chapter apply.

(c) State review of the accreditation status of MCOs, PIHPs, and PAHPs. The State must review the accreditation status of each MCO, PIHP, and PAHP in accordance with the requirements as set forth in §438.332 of this chapter.

(d) Managed care quality rating system. The State must determine a quality rating or ratings for each MCO, PIHP, and PAHP in accordance with the requirements set forth in §438.334 of this chapter, except that the terms of §438.334(c)(2)(i) and (c)(3) of this chapter (related to consultation with the Medical Care Advisory Committee) do not apply.

(e) Managed care quality strategy. The State must draft and implement a written quality strategy for assessing and improving the quality of health care and services furnished CHIP enrollees as described in §438.340 of this chapter, except that the reference to consultation with the Medical Care Advisory Committee described in §438.340(c)(1)(i) of this chapter does not apply.

(f) Applicability to PCCM entities. For purposes of paragraphs (b) and (e) of this section and §457.1250(a), a PCCM entity described in this paragraph is a PCCM entity whose contract with the State provides for shared savings, incentive payments or other financial reward for improved quality outcomes.

[81 FR 27897, May 6, 2016, as amended at 82 FR 40, Jan. 3, 2017; 85 FR 72842, Nov. 13, 2020]

return arrow Back to Top

§457.1250   External quality review.

(a) Each State that contracts with MCOs, PIHPs, or PAHPs must follow all applicable external quality review requirements as set forth in §§438.350 (except for references to §438.362), 438.352, 438.354, 438.356, 438.358, 438.360 (only with respect to nonduplication of EQR activities with private accreditation) and §438.364 of this chapter. In the case of a contract with a PCCM entity described in §457.1240(f), §438.350 (except for references to §438.362) of this chapter applies.

(b) A State may amend an existing EQRO contract to include the performance of EQR-related activities and/or EQR in accordance with paragraph (a) of this section.

[81 FR 27897, May 6, 2016, as amended at 82 FR 40, Jan. 3, 2017]

return arrow Back to Top

Grievance System

return arrow Back to Top

§457.1260   Grievance system.

(a) Statutory basis and definitions—(1) Statutory basis. This section implements section 2103(f)(3) of the Act, which provides that the State CHIP must provide for the application of section 1932(a)(4), (a)(5), (b), (c), (d), and (e) of the Act (relating to requirements for managed care) to coverage, State agencies, enrollment brokers, managed care entities, and managed care organizations. Section 1932(b)(4) of the Act requires managed care plans to establish an internal grievance procedure under which an enrollee, or a provider on behalf of such an enrollee, may challenge the denial of coverage of or payment for covered benefits.

(2) Definitions. The following definitions from §438.400(b) of this chapter apply to this section—

(i) Paragraphs (1) through (5) and (7) of the definition of “adverse benefit determination”; and

(ii) The definitions of “appeal”, “grievance”, and “grievance and appeal system”.

(b) General requirements. (1) The State must ensure that its contracted MCOs, PIHPs, and PAHPs comply with the provisions of §438.402(a), (b), and (c)(2) and (3) of this chapter with regard to the establishment and operation of a grievances and appeals system.

(2) An enrollee may file a grievance and request an appeal with the MCO, PIHP, or PAHP. An enrollee may request a State external review in accordance with the terms of subpart K of this part after receiving notice under paragraph (e) of this section that the adverse benefit decision is upheld by the MCO, PIHP, or PAHP.

(3) If State law permits and with the written consent of the enrollee, a provider or an authorized representative may request an appeal or file a grievance, or request a State external review in accordance with the terms of subpart K of this part, on behalf of an enrollee. When the term “enrollee” is used throughout this section, it includes providers and authorized representatives consistent with this paragraph (b).

(c) Timely and adequate notice of adverse benefit determination. (1) The State must ensure that its contracted MCOs, PIHPs, and PAHPs comply with the provisions at §438.404(a) and (b)(1), (2), and (5) of this chapter (regarding the content of the notice of an adverse benefit determination).

(2) In addition to the requirements referenced in paragraph (c)(1) of this section, the notice must explain:

(i) The enrollee's right to request an appeal of the MCO's, PIHP's, or PAHP's adverse benefit determination, including information on exhausting the MCO's, PIHP's, or PAHP's one level of appeal described at §438.402(b) of this chapter referenced in paragraph (b)(1) of this section, and the right to request a State external review in accordance with the terms of subpart K of this part; and

(ii) The procedures for the enrollee to exercise his or her rights provided under this paragraph (c).

(3) The MCO, PIHP, or PAHP must provide timely written notice to the enrollee of the adverse benefit determination. The terms of §§438.404(c)(6) and 438.210(d)(2) of this chapter apply in the circumstances of expedited service authorization decisions.

(d) Handling of grievances and appeals. The State must ensure that its contracted MCOs, PIHPs, and PAHPs comply with the provisions at §438.406 of this chapter.

(e) Resolution and notification: Grievances and appeals. (1) The State must ensure that its contracted MCOs, PIHPs, and PAHPs comply with the provisions at §438.408(b) (relating to the timeframe for resolution of grievances and appeals), (c)(1) and (2) (the extension of timeframes for resolution of grievances and appeals), (d) (relating to the format of the notice of resolution for grievances and appeals), and (e)(1) (relating to the content of the notice of resolution for grievances and appeals) of this chapter.

(2) Each MCO, PIHP, or PAHP must resolve each grievance and appeal, and provide notice, as expeditiously as the enrollee's health condition requires, within State-established timeframes that may not exceed the timeframes specified in this paragraph (e).

(3) In the case of an MCO, PIHP, or PAHP that fails to adhere to the notice and timing requirements in this section, the enrollee is deemed to have exhausted the MCO's, PIHP's, or PAHP's appeals process. The enrollee may initiate a State external review in accordance with the terms of subpart K of this part.

(4) For appeals not resolved wholly in favor of an enrollee, in addition to the information required under paragraph (e)(1) of this section and §438.408(e)(1) of this chapter, the content of the notice of appeal resolution must include the enrollee's right to request a State external review in accordance with the terms of subpart K of this part, and how to do so.

(5) Except as provided in paragraph (e)(3) of this section, an enrollee may request a State external review only after receiving notice that the MCO, PIHP, or PAHP is upholding the adverse benefit determination. The State must provide enrollees no less than 90 calendar days and no more than 120 calendar days from the date of the MCO's, PIHP's, or PAHP's notice of resolution to request a State external review. The parties to the State external review include the MCO, PIHP, or PAHP, as well as the enrollee and his or her representative or the representative of a deceased enrollee's estate.

(f) Expedited resolution of appeals. The State must ensure that its contracted MCOs, PIHPs, and PAHPs comply with the provisions at §438.410 of this chapter.

(g) Information about the grievance and appeal system to providers and subcontractors. The State must ensure that its contracted MCOs, PIHPs, and PAHPs comply with the provisions at §438.414 of this chapter.

(h) Recordkeeping requirements. The State must ensure that its contracted MCOs, PIHPs, and PAHPs comply with the provisions at §438.416 of this chapter.

(i) Effectuation of reversed appeal resolutions. If the MCO, PIHP, or PAHP, or the result of a State external review, in accordance with the terms of subpart K of this part, reverses a decision to deny, limit, or delay services, the MCO, PIHP, or PAHP must authorize or provide the disputed services promptly and as expeditiously as the enrollee's health condition requires but no later than 72 hours from the date it receives notice reversing the determination.

[85 FR 72842, Nov. 13, 2020]

return arrow Back to Top

Sanctions

return arrow Back to Top

§457.1270   Sanctions.

(a) General. The State must comply with §§438.700 through 438.704, 438.706(c) and (d), and 438.708 through 438.730 of this chapter.

(b) Optional imposition of temporary management. Except as provided in paragraph (c) of this section, the State may impose temporary management under §438.702(a)(2) of this chapter as referenced in paragraph (a) of this section, only if it finds (through onsite surveys, enrollee or other complaints, financial status, or any other source) any of the following:

(1) There is continued egregious behavior by the MCO, including but not limited to behavior that is described in §438.700 of this chapter (as referenced in paragraph (a) of this section), or that is contrary to any of the requirements of this subpart.

(2) There is substantial risk to enrollees' health.

(3) The sanction is necessary to ensure the health of the MCO's enrollees—

(i) While improvements are made to remedy violations under §438.700 of this chapter as referenced in paragraph (a) of this section.

(ii) Until there is an orderly termination or reorganization of the MCO.

(c) Required imposition of temporary management. The State must impose temporary management (regardless of any other sanction that may be imposed) if it finds that an MCO has repeatedly failed to meet substantive requirements in this subpart. The State must also grant enrollees the right to terminate enrollment without cause, as described in §438.702(a)(3) of this chapter as referenced in paragraph (a) of this section, and must notify the affected enrollees of their right to terminate enrollment.

[85 FR 72843, Nov. 13, 2020]

return arrow Back to Top

§457.1280   Conditions necessary to contract as an MCO, PAHP, or PIHP.

(a) The State must assure that any entity seeking to contract as an MCO, PAHP, or PIHP under a separate child health program has administrative and management arrangements or procedures designed to safeguard against fraud and abuse.

(b) The State must ensure that the arrangements or procedures required in paragraph (a) of this section—

(1) Enforce MCO, PAHP, and PIHP compliance with all applicable Federal and State statutes, regulations, and standards.

(2) Prohibit MCOs, PAHPs, and PIHPs from conducting any unsolicited personal contact with a potential enrollee by an employee or agent of the MCO, PAHP, or PIHP for the purpose of influencing the individual to enroll with the entity.

(3) Include a mechanism for MCOs, PAHPs, and PIHPs to report to the State, to CMS, or to the Office of Inspector General (OIG) as appropriate, information on violations of law by subcontractors, providers, or enrollees of an MCO, PAHP, or PIHP and other individuals.

(c) With respect to enrollees, the reporting requirement in paragraph (b)(3) of this section applies only to information on violations of law that pertain to enrollment in the plan, or the provision of, or payment for, health services.

(d) The State may inspect, evaluate, and audit MCOs, PIHPs, and PAHPs at any time, as necessary, in instances where the State determines that there is a reasonable possibility of fraudulent or abusive activity.

[66 FR 2685, Jan. 11, 2011. Redesignated and amended at 81 FR 27900, May 6, 2016]

return arrow Back to Top

§457.1285   Program integrity safeguards.

The State must comply with the program integrity safeguards in accordance with the terms of subpart H of part 438 of this chapter, except that the terms of §§438.604(a)(2) and 438.608(d)(4) of this chapter do not apply.

[85 FR 72844, Nov. 13, 2020]

return arrow Back to Top

Need assistance?