Medicaid and the Children's Health Insurance Program: Understanding These Programs to Promote Advancements

Abstract

Medicaid and the Children's Health Insurance Program together represent the largest healthcare coverage programs in the United States, providing benefits for approximately one in four residents and more than half of all children. Both programs are funded by a combination of federal and state dollars with more than 70% of beneficiaries enrolled in managed care plans. The size and scope of these programs underpin the importance of a working knowledge to understand healthcare delivery in the United States. This primer provides an overview of several interrelated topics for an improved understanding of the Medicaid and Children's Health Insurance Program programs for orthopaedic surgeons, other clinicians, healthcare administrators, policy makers, and business leaders.

Medicaid was signed into law with Medicare in 1965 as the Medicare and Medicaid Act (a.k.a. Social Security Amendments of 1965) to provide healthcare coverage to low-income families and individuals including adults, children, and people with disabilities.¹ The Children's Health Insurance Program (CHIP) was signed into law in 1997 to help with healthcare expenses of children in families with incomes too high to qualify for Medicaid but insufficient to afford private insurance coverage.² These programs were designed as safety nets to provide coverage for our nation's most vulnerable and underrepresented populations. As of April 2024, these programs provided healthcare benefits for approximately 81.5 million individuals with 46.8% of those covered being children.³ An understanding of both programs is essential to effectively promote means of improving population health and assuring long-term sustainability of healthcare delivery in the United States.

Funding for Medicaid and Children's Health Insurance Program

Medicaid and CHIP are funded by a combination of federal and state dollars. The preponderance of funding is from the federal government through general revenues (eg, federal taxes, borrowing, and tariffs) that are directed to the Federal Financial Participation fund.⁴ States can use various sources to pay for Medicaid and CHIP, including personal income, sales, corporate, and provider taxes; local government funds; and tobacco settlement funds. States in this primer are defined as US states, the District of Columbia (DC), and five US territories (American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico, and the US Virgin Islands).

The federal government reimburses each state on a regular basis for a portion of Medicaid spending using the annually adjusted Federal Medical Assistance Percentage (FMAP). The FMAP computation takes into consideration the per capita income in each state relative to the national average, a state's average income, a state's population size, and a state's population characteristics such as elderly individuals and people with disabilities. The FMAP match can be expressed as a multiple of federal-to-state dollar spending, with an approximate federal contribution multiplier of 1.00 to 3.40 across states in 2024.⁵

The federal matching percentage for CHIP in each state is approximately 15% higher than the federal matching percentage for Medicaid.⁶ The federal CHIP match is referred to as the enhanced FMAP (eFMAP) and is determined by a formula that includes a state's Medicaid matching rate, a state's average per capita income compared with the national average, the number of children enrolled in a state's program, and other state-specific factors such as demographics and healthcare costs. The Centers for Medicare and Medicaid Services (CMS) sets rules for determining the FMAP and the eFMAP for each state's Medicaid and CHIP programs. There is no upper limit on the amount of federal funding, and states with lower per capita income generally receive higher matching percentages.

Spending on Medicaid and Children's Health Insurance Program

In 2013, the year before Medicaid expansion incentives were ushered in by the Patient Protection and Affordable Care Act of 2010 (ACA), total Medicaid spending was $460 billion and total CHIP spending was $13.2 billion, representing increases of 6% and 8% from 1 year earlier.⁷ In 2022, total spending on Medicaid and CHIP had nearly doubled: Medicaid expenses were $830.6 billion and CHIP expenses were $22.3 billion.⁷ An average 5.2% annual increase in Medicaid spending is anticipated from 2023 to 2032,⁸ exceeding $1 trillion by 2028. To our knowledge, there is no published estimate for CHIP spending over this same period. Additional jump in Medicaid spending may occur in 2028 with expiration of a $32 billion 4-year cap reduction on Disproportionate Share Hospital payments.⁹ Disproportionate Share Hospital payments entail payments from states to hospitals that serve a high number of Medicaid and uninsured patients.

The Center for Medicaid and CHIP Services is a branch of CMS that oversees all national program policies and operations related to Medicaid and CHIP. Each state administers the Medicaid program differently with resultant variations in coverage plans. The Center for Medicaid and CHIP Services also oversees an optional and less well-known state program for low-income residents termed the Basic Health Program.¹⁰ As of July 2024, only Minnesota and Oregon were participating in this program.

Beneficiary Qualifications

Medicaid and CHIP operate in all states on a voluntary state basis. Applicants must meet federal and state requirements for residency and US citizenship, although noncitizens can qualify if specified criteria are met.¹¹ The ACA established the Modified Adjusted Gross Income methodology for states to determine Medicaid eligibility for adults, parents, pregnant women, and children. The methodology factors in various sources of income including wages, self-employment, rental income, and designated deductions. Eligibility for individuals aged 65 years and older, and individuals who have a disability is determined using the federal Supplemental Security Income eligibility criteria.

In general, most states provide coverage for individuals earning less than or equal to 138% of the Federal Poverty Level (FPL), an annual earning threshold determined by the US Census Bureau. Some states may also use asset determinations for eligibility. The same percentage cutoff applies to a family of three with typically upward percentage adjustments for increasing numbers of family members using the Modified Adjusted Gross Income methodology. Foster youth through the age of 26 qualify for Medicaid, regardless of annual income. CHIP provides coverage for children with a caregiver(s) earning less than or equal to 200% of the FPL. In select cases, children may qualify for both Medicaid and CHIP resulting in more comprehensive coverage.

Medicaid Expansion, Public Health Emergency Protections, and Enrollment Unwinding

Beginning in 2014, the ACA provided an incentive for states to expand Medicaid eligibility to all adults aged younger than 65 years with incomes up to 138% of the FPL, including their dependent children. Beneficiary enrollment in Medicaid and CHIP increased from approximately 61 million people in December 2013 to nearly 72 million individuals by March 2020.³ Medicaid expansion during this time was funded completely by the federal government with 40 states and DC opting into the expansion. Funding for hospitals experiencing financial losses with Medicaid expansion has been provided through the federal Healthcare Access and Stabilization Program. Before the ACA, Medicaid eligibility varied by state and each state had its own income and categorical requirements.

Coinciding with the announcement of the US COVID-19 Public Health Emergency (PHE) in March 2020, the Families First Coronavirus Response Act was enacted and made available temporary 6.2% and 4.34% increases to each qualifying state's Medicaid FMAP and CHIP eFMAP, respectively. State participation required continuous enrollment for all Medicaid and CHIP beneficiaries, regardless of changes in income status. Before the COVID-19 PHE, redetermination of program eligibility occurred annually. Between March 2020 and March 2023, combined Medicaid and CHIP enrollment increased to 94 million people.¹²

The Consolidated Appropriations Act of 2023 unlinked the continuous Medicaid enrollment provision from the COVID-19 PHE protections and phased down the temporary increases in the FMAP and eFMAP. Beginning in April 2023, states resumed coverage redeterminations and began disenrolling beneficiaries who were no longer eligible or who did not complete renewal forms within required time frames. A June 2025 deadline has been set for states to return to pre-PHE eligibility and enrollment operations.

As of April 2024, 19.6 million people had been disenrolled from Medicaid, decreasing total Medicaid enrollment to 74.4 million.¹³ Approximately 69% of those removed were removed because of procedural reasons, with children representing 37% of Medicaid disenrollments in the 21 states reporting age breakouts. Consequently, CMS has been pressing states to pause terminations and reinstate individuals who were disenrolled from Medicaid and CHIP for procedural reasons rather than eligibility.

States have been required to develop operational plans for the unwinding process with potential fines and a decrease in the FMAP for noncompliance.¹⁴ States have also been instructed to maintain enrollment for all children aged younger than 19 years on Medicaid and CHIP through 2024. Agencies are encouraged to work with community organizations and health plans to perform outreach to enrollees about the importance of completing Medicaid and CHIP renewal forms and/or assisting in the transition to other coverage such as the subsidized ACA Health Insurance Marketplace.

Beneficiary Benefits

States design and administer Medicaid and CHIP programs within federally mandated parameters for benefits (Table 1). The federal government allows for states to cover populations of people not defined by program eligibility criteria and to cover optional services through demonstration and waiver authorities [for example, Section 1115, Section 1915(b), and Section 1915(c) of the Social Security Act]. Consequently, cumulative benefits for Medicaid and CHIP recipients vary across states and may reflect state political leanings. As of 2024, all states provided optional coverage for specific formularies of outpatient prescription drugs.

Table 1.

Federally Mandated Coverage for Medicaid and Children's Health Insurance Program Beneficiaries

Medicaid		CHIP
Physician services	Nurse midwife services	Well-child visits and check-ups
Certified pediatric and family nurse practitioner services	Transportation to medical care	Inpatient and outpatient hospital services
Inpatient and outpatient hospital services	Freestanding birth center services	Prescription medications
Laboratory and radiograph services	Medication-assisted treatment	Laboratory, radiograph, and other diagnostic tests
Rural health clinic services	Tobacco cessation counseling for pregnant women	Emergency services
Federally qualified health center services	ABP	Vaccinations
Nursing facility services	Routine patient costs of items and services if enrolled in qualifying clinical trials	Behavioral health and substance abuse services
Home health services	EPSDT	Dental and vision care
Family planning services	—	EPSDT

CHIP = Children's Health Insurance Program, EPSDT = Early and Periodic Screening, Diagnostic and Treatment Service, applicable to individuals aged younger than 21 years, mandatory for states with CHIP through Medicaid expansion; ABP, Alternative Benefit Plan, mandatory for states with Medicaid expansion and includes 10 Essential Health Benefits defined in the Patient Protection and Affordable Care Act of 2010 (outpatient care, inpatient care, emergency services, maternity and newborn care, mental health and substance use disorder services, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, pediatric services with oral and vision care).

Payments to Providers

Medicaid and CHIP enrollees are covered by two payment means to healthcare providers: (1) fee-for-service (a.k.a traditional Medicaid) and (2) managed care. Most states use a combination of these payment methods.

Fee-For-Service

Under fee-for-service, states set their own fee schedules and can directly manage payments to providers, or contract with a commercial insurer to manage payments. Federal rules require that payment rates be consistent with efficiency, economy, and quality of care and are sufficient to ensure access equivalent to the general population. Payment rates to providers may be influenced by alternative payment model (APM) arrangements between states and CMS. On average, Medicaid fee-for-service physician payment rates are two-thirds of Medicare payment rates, but with variability among procedures. Although many states have similar fee schedules for both Medicaid and CHIP, payment rates between these programs can differ. Medicaid and Medicare fee-for-service payments to physicians for several orthopaedic surgery procedures in one urban setting are presented in Table 2.

Table 2.

Medicare and Medicaid Physician Fee-For-Service Payment Schedules for Select Orthopaedic Surgery Procedures in Chicago, Illinois, 2024

Procedure	Primary CPT Code	Medicare Fee-For-Service Payment, Facility (Hospital, ASC)a	Medicare Fee-For-Service Payment, Nonfacility (Office)a	Medicaid Fee-For-Service Maximum Paymentb
E/M new patient level 3	99203	$86.11	$116.59	$41.60
E/M establish patient level 3	99213	$68.23	$94.03	$28.35
Primary total hip arthroplasty	27130	$1,415.03	N/A	$1749.50
Primary total knee arthroplasty	27447	$1,412.37	N/A	$1473.35
Lumbar hemilaminectomy and diskectomy (1 disk)	63030	$1,053.68	N/A	$1129.30
Lumbar posterior fusion (single-level)	22612	$1,808.10	N/A	$1198.70
Arthroscopic meniscectomy knee	29881	$594.64	N/A	$621.50
Arthroscopic repair rotator cuff	29827	$1,172.48	N/A	$674.20
Carpal tunnel release (open)	64721	$478.16	$485.87	$524.40

CPT, Current Procedural Terminology, ASC, Ambulatory Surgery Center

^aPayments for participating Medicare providers in Chicago (https://www.cms.gov/medicare/physician-fee-schedule/search?Y=0&T=4&HT=0&CT=2&H1=27130&C=67&M=5).

^bPayments for Medicaid providers in Illinois (https://hfs.illinois.gov/medicalproviders/medicaidreimbursement/practitioner.html).

The Medicaid and CHIP Payment and Access Commission (MACPAC) is a nonpartisan legislative branch agency that makes annual recommendations on appropriate payment rates to Congress, the US Department of Health and Human Services, and states. An analysis by MACPAC in 2017 found that fee-for-service inpatient hospital service payments for Medicaid were comparable with or higher than Medicare payments when taking into consideration supplemental revenues from tax benefits, certified public expenditures, and intergovernmental transfers.¹⁵

Managed Care Organizations

The move from fee-for-service to managed care organizations (MCOs) was stimulated by the Balanced Budget Act of 1997. Managed care provides states with some control and predictability over future costs. In 2021, more than 70% all Medicaid and CHIP beneficiaries were enrolled in MCOs that were administered by public for-profit, private for-profit, private nonprofit, and government plans.¹⁶ In 2023, the five largest MCOs were for-profit, publicly traded companies (Table 3).¹⁷ State governments decide which populations of people and what services to include in MCO arrangements, leading to heterogeneity of MCO coverage across states. MCO plans, in turn, have leeway to offer enrollee benefits beyond state required benefits.

Table 3.

Five Largest Medicaid Managed Care Organizations in 2023

Company Name	Number of MCOs	Number of States with Subsidiary	Number of Covered Lives
Centene	29	28	14.5 million
Elevance Health (Anthem)	22	21	10.5 million
United Health Group	30	27	7.8 million
Molina	20	19	4.5 million
CVS (Aetna)	12	11	2.5 million

MCOs, Managed Care Organizations.

There are three types of Medicaid and CHIP MCO delivery systems: (1) comprehensive risk-based managed care plans, (2) primary care case management (PCCM) plans, and (3) limited benefit plans (a.k.a. alternative benefit plans).^18,19 In a comprehensive risk-based MCO, the insurance carrier is paid by the state a fixed dollar amount per member per month. The insurer is required to pay all costs exceeding capitated state payments and is permitted to retain any savings. In a PCCM arrangement, enrollees have a designated primary care provider who is paid a monthly fee by the state to manage and coordinate basic medical care. The same primary care provider and others in the PCCM network are then compensated in a fee-for-service manner.

Most states carve specific services out of these two delivery systems and reposition the carved-out services into the third delivery system: limited benefit plans. There are two named categories of limited benefit plans: Prepaid Inpatient Health Plan and Prepaid Ambulatory Health Plan. States contract with insurers for limited benefit plans and pay on a capitated basis. The insurers, in turn, pay fee-for-service rates for specified enrollee needs such as inpatient behavioral health, substance abuse inpatient care, prescription drugs, dental care, nonemergency medical transportation, and long-term services and supports.

Under federal law, state payments to MCOs must be actuarially sound with projected per member rates covering patient services, administrative costs, and profit. State payment rates for MCO plans are usually set for a 12-month rating period and reviewed and approved by CMS. States can make risk adjustment payments to MCOs using various measures of population health. In addition, states can require MCOs to participate in performance improvement projects and report quality performance measures, tying measures of performance to payment adjustments. Quality performance measures reported by MCOs to states typically represent a subset of the Healthcare Effectiveness Data and Information Set and include preventive care, chronic disease management, access to care, and behavioral health measures.²⁰

Many MCOs, in turn, have developed value-based APMs with participating providers. The APMs financially reward and/or penalize providers based on plan-specific quality performance measures that may or may not align with performance measures promulgated by CMS.²¹ Payments from MCOs to providers may be retrospective or prospective procedural bundles, prospective condition bundles, capitation payments for condition-specific care, and capitation payments for a full range of care.

Federally Qualified Health Centers and rural health clinics that receive MCO-fixed payment rates can collect additional payments for providing covered services to Medicaid and CHIP eligible individuals under a prospective payment system. States provide for supplemental payments to these entities equal to the difference between the payment under the prospective payment system and the payment provided under the MCO contract.²² Alternatively, states can create alternative payment methodologies for Federally Qualified Health Centers and rural health clinics to provide payments of at least the same amounts as required under the prospective payment system.

By law, at least 85% of MCO revenue must be spent on services and goods related to the health of plan enrollees (so-called Medical Loss Ratio). MCO payment rates for provider services and goods are audited regularly by state governments. MCOs can potentially experience financial challenges related to uncontrollable socioeconomic factors and patient churn from benefit redeterminations. States have primary responsibility for preventing and recovering improper payments due to fraud, waste, and abuse in both fee-for-service and MCO payment arrangements.

Cost Sharing

States have the option to establish cost sharing with Medicaid and CHIP enrollees, including copayments, coinsurance, and deductibles. Cost sharing can apply to both fee-for-service and MCO payment arrangements. The maximum out-of-pocket costs are typically limited, and certain vulnerable groups such as children, disabled individuals, and pregnant women are exempt from most or all shared costs. In 2024, CMS issued a ruling that assures access for children to Medicaid and CHIP regardless of whether a family is unable to pay premiums. In addition, the ruling removes waiting periods for CHIP coverage and eliminates lifetime limits on children's coverage.

Dual Eligibility

People who qualify for both Medicaid and Medicare programs are deemed dually eligible.²³ In the latest available data from September 2022, approximately nine million individuals qualified for both Medicaid and Medicare.²⁴ Dually eligible beneficiaries have historically accounted for a disproportionate share of spending in both programs. The Medicare Savings Programs are a set of four Medicaid benefit programs that help pay for the costs of Medicare in this group: each program has different eligibility criteria.²³ Medicare expenses that may be partly or fully covered through these four programs include premiums, copayments, and deductibles, in addition to some services not covered by traditional Medicare such as vision, hearing, and dental care.

When Medicaid enrollees have another source of insurance, Medicaid is generally the payer of last resort. For example, Medicaid is no longer the primary payer of prescription drugs for dual eligible Medicare-Medicaid enrollees. Rather, dual eligible individuals receive assistance to help pay for prescription drugs through the Medicare Part D Low Income Subsidy program.

State Performance Reporting

Various quality performance measures are collected at the state level to monitor and improve the Medicaid and CHIP programs in the domains of healthcare quality, equity, and access. Data collection methods include administrative claims, electronic health records, and surveys. Performance measures are used by states independently for their State Health System Performance Scoreboard (so-called Medicaid and Chip “MAC” Scorecard).²⁴

At the federal level, Medicaid and CHIP require states to complete two quality performance measure sets encompassing physical and behavioral health: the Child Core Set and the Adult Core Set.²⁵ Federal reporting of the Child Core Set and the behavioral health measures in the Adult Core Set became mandatory in 2024. Both performance measure sets are reviewed annually by a workgroup comprising Medicaid and CHIP stakeholders and measurement experts. The current federal government contract for measurement expertise is with Mathematica.

Provider Participation

Clinicians

Physicians and other licensed providers apply for enrollment in Medicaid and CHIP through their state(s) of licensure. In most cases, providers who participate in Medicaid and CHIP are required to participate in MCOs if these payment arrangements are used by the state. Federal rules require states to establish healthcare provider network standards for MCOs, and many states mandate minimum provider requirements such as specialty care coverage, primary care-to-member ratios, and geographic accessibility in MCO contracts. MCOs can use various means to incentivize providers to participate in a network, including financial rewards and prompt payment policies. In 2017, 74.3% of physicians (85.8% of orthopaedic surgeons) accepted new patients with Medicaid coverage.²⁶ To our knowledge, there has been no published update on the numbers of physicians nationally accepting new patients with Medicaid and/or CHIP coverage.

Healthcare Organizations, Medical Suppliers, Pharmacies, and Pharmaceuticals

To receive Medicaid and CHIP reimbursement, healthcare organizations (eg, hospitals, clinics, ambulatory surgery centers, and home health agencies) must follow the “Conditions of Participation,” a foundational set of operating requirements.²⁷ Fundamental standards include physical environment; infection control and prevention; and nursing, medical staff, and patient rights. Medical suppliers and pharmacies are required to enroll with their state's Medicaid agency as providers to receive reimbursement for services or products delivered to beneficiaries.

Depending on the structure of a state's Medicaid and CHIP programs, healthcare organizations, medical suppliers, and pharmacies may need to establish contractual agreements with MCOs pertaining to reimbursement rates and network participation. State Medicaid agencies have means by which to control drug prices for beneficiaries, including the Federal Upper Limit pricing formula, drug rebates, preferred drug lists, value-based contracts with drug manufacturers, and bulk purchasing.

Claims Coding

Medicaid and CHIP use the same coding systems for claims reporting as Medicare and commercial health insurance carriers (Table 4).²⁸ Physician documenting and coding rules for patient care activities are analogous, apart from the exclusion of Evaluation and Management Consultation Codes in Medicaid and CHIP. There is one coding system specific to Medicaid and CHIP (CHIP-CODE) that is required for states to report to the CMS Transformed Medicaid Statistical Information System.²⁹ CMS utilizes Transformed Medicaid Statistical Information System data to oversee administration and integrity of both programs. All entities participating in Medicaid and CHIP must adhere to state and MCO billing and claims submission procedures: the penalties for fraudulent claims coding are substantial.³⁰

Table 4.

Claims Coding Systems Used in Medicaid and CHIP^a

Coding System	Description of Codes
International classification of diseases-tenth revision-clinical modifications	Designate diseases and health-related conditions
International classification of diseases-tenth revision-procedure coding system	Designate procedures performed in an inpatient hospital setting
Current procedural terminology and healthcare common procedure coding system I - synonymous	Designate services or procedures performed by clinicians
Healthcare common procedure coding system II (HCPCS II) and national drug codes (NDC)	HCPCS II codes designate medications, durable medical equipment, ambulance transport services, prosthetics, and orthotics; NDC identify specific drugs and medications
Health insurance prospective payment system	Designate specific sets of patient characteristics in the context of skilled nursing facilities and home health agencies
Revenue codes	Designate type of service or item associated with a specific charge
Place of service	Designate where a service was done
Case-mix group and diagnosis-related group	Group patients with similar clinical characteristics and resource utilization
Resource utilization groups	Used for certain services in the context of long-term care facilities

^a Dental, Logical Observation Identifiers Names and Codes, and Systemized Nomenclature of Medicine Clinical Terms codes are not included in this table.

Success of Medicaid and Children's Health Insurance Program

Medicaid and CHIP coverage has increased for more than 10 million individuals since passage of the ACA in 2010, despite disenrollment after the end of the COVID-19 PHE. Medicaid expansion has been associated with better access to primary care, improved postpartum health, and reductions in both infant mortality and disease-related mortality in older adults.¹⁸ Racial inequities in health outcomes, insurance coverage, and accesses to care have decreased.^18,31 In addition, state partnerships with MCOs have enhanced budget predictability and stimulated an increased focus on the effect of social determinants of health.¹⁸

However, improving access to subspecialty care for Medicaid and CHIP beneficiaries remains challenging. One survey study of community health centers in nine Medicaid expansion states and DC found that nearly 60% of centers experienced difficulties obtaining new specialist visits for their Medicaid patients.³² Reported barriers to appointment scheduling included a limited number of specialists in MCOs accepting new patients and MCO administrative requirements for accessing specialist consults. A separate study found that a fictitious pediatric patient with Medicaid was less successful at obtaining an appointment with a pediatric orthopaedic specialist than the same simulated pediatric patient with private insurance. In addition, the fictitious pediatric patient was more likely to obtain an appointment at an academic practice compared with a private practice.³³ The primary barrier to an appointment was the lack of a referral.

In 2023, CMS released a synopsis of health status and health-related social needs of Medicaid and CHIP beneficiaries that highlighted areas for further improvement (eg, adult self-reported health status, housing problems, sheltered homelessness, and food security).³⁴ That same year, CMS eliminated a hurdle to behavioral health care by permitting state Medicaid and CHIP programs to pay mental health specialists directly when a beneficiary's primary care provider requested advice—even without presence of the patient.

The Future of Medicaid and Children's Health Insurance Program

Adequate health insurance and access to care are fundamental to reducing health inequities and improving population health. In 2021, the Center for Medicare and Medicaid Innovation Center (a.k.a. Innovation Center) released a “strategy refresh” with one extended goal of increasing specialty care access through accountable care relationships.³⁵ In 2022, CMS launched the National Quality Strategy to promote advancements across all CMS payer programs in four content areas: equity and engagement, outcomes and alignment, safety and resiliency, and interoperability and scientific advancement.³⁶ As part of this effort, CMS has been working to align quality measures into a Universal Foundation for use across numerous CMS value-based payment programs.³⁷

The Innovation Center is continually devising and testing value-based payment approaches to promote better care efficiency and improved health outcomes.³⁸ As examples, the Innovation Center has created voluntary APMs for states that target specific Medicaid and CHIP populations and health outcomes (eg, Integrated Care for Kids Model and Transforming Maternal Health Model). A total cost of care model termed the All-Payer Health Equity Approaches and Development Model was recently introduced to improve care coordination among all payers including CMS, state, and commercial insurers.

There are ongoing efforts to improve Medicaid and CHIP beneficiary experiences. The MACPAC March 2024 Report to Congress includes recommendations to improve beneficiary engagement in state Medicaid Advisory Committees.³⁹ The report also includes recommendations to improve the appeal process for denial-of-services by Medicaid MCOs. Two new rules were finalized by CMS in April 2024 to enhance timely access to care for Medicaid and CHIP beneficiaries in managed care plans, establish a quality rating system website for beneficiaries to compare managed care plans, and increase payment transparency and oversight.⁴⁰ CMS has promoted a goal of having the vast majority of Medicaid and CHIP beneficiaries in an accountable care relationship for improved integration of care by 2030.³⁵

Utilization review, limitations on pharmaceuticals, restrictions on durable medical equipment, social determinants of health challenges, and reimbursement concerns can be barriers to provider participation in Medicaid and CHIP. There are ongoing efforts to conduct research and raise awareness about the importance of adequate reimbursement to cover the continually increasing costs of providing high quality care. Although Medicaid and CHIP reimbursements may be comparatively low, the contributions to profit margins may still be favorable in many healthcare settings due to the high fixed costs of operating a medical practice. More importantly, participation in these programs provides a connection with the mission basis of healthcare integral to provider organizational culture and our US society-at-large.

Summary

Medicaid and CHIP are critical insurance programs for the most vulnerable in our society. The movement from fee-for-service toward accountable care offers promise to improve care quality and equity in this evolving public-private payer partnership.