US Healthcare · System Basics
Medicaid Managed Care Plans
How managed care works in Medicaid — what a managed care organization (MCO) does, how to choose a plan, the role of a primary care provider, and what to do if you have concerns about your care.
People newly enrolled in Medicaid who have been asked to choose a managed care plan, or current enrollees who want to understand how their coverage is coordinated and what their rights are within a managed care arrangement.
Most people who enroll in Medicaid today receive their benefits through a managed care plan rather than through a direct fee-for-service arrangement with the state. Understanding how Medicaid managed care works — how plans are chosen, how care is coordinated, and what your rights are — is an essential part of using your coverage effectively. For an overview of the Medicaid program as a whole, visit the Medicaid and CHIP guide.
What managed care means in Medicaid
In traditional fee-for-service Medicaid, the state reimburses doctors and hospitals directly every time a Medicaid member receives a service. In managed care, the state instead contracts with private insurance companies — called managed care organizations, or MCOs — and pays them a fixed monthly amount for each enrolled member. This payment is called a capitation rate. The MCO then takes responsibility for coordinating and paying for the member’s care within that fixed budget.
More than 70 percent of all Medicaid enrollees nationally are now in some form of managed care. States prefer managed care because it can improve care coordination, create more predictable costs, and give plans incentives to keep members healthy. MCOs vary in quality and performance, which is why choosing the right plan matters.
Types of managed care arrangements
States use several managed care models. The most common are:
| Model | Description |
|---|---|
| Comprehensive MCO | A full-service plan that covers most or all Medicaid benefits for enrolled members; members choose or are assigned to this plan and must use its network |
| Primary care case management (PCCM) | A lighter model where a primary care provider is designated for coordination but providers are still paid fee-for-service by the state |
| Prepaid inpatient health plan (PIHP) | Covers only inpatient services, often for behavioral health or long-term care |
| Prepaid ambulatory health plan (PAHP) | Covers non-inpatient services for a specific category such as dental or transportation |
Most enrollees who use managed care are in a comprehensive MCO. The remaining models are used in specific circumstances or to supplement an MCO.
Choosing a managed care plan
When you enroll in Medicaid and managed care is required, your state will give you information about available plans and ask you to choose one within a defined window — often 30 to 60 days. Here is how to evaluate your options:
Step 1: Check provider networks
Find out whether your current primary care doctor, specialists, and preferred hospital are in each plan’s network. If you have an ongoing relationship with a provider, choosing a plan that includes them avoids the disruption of switching.
Step 2: Review the formulary
Each plan maintains a formulary — the list of covered prescription drugs. If you take any regular medications, verify they are covered under the plan’s formulary and at what tier (which affects your copayment).
Step 3: Look at additional benefits
Some MCOs offer benefits beyond the required Medicaid package — transportation to medical appointments, dental care, vision care, gym memberships, or care management programs. These vary by state and by plan.
Step 4: Check quality ratings
Some state Medicaid agencies publish plan quality ratings or report cards based on member satisfaction surveys and clinical quality measures. A higher-rated plan is not always better for your specific needs, but the ratings provide a useful starting point.
Step 5: Confirm behavioral health coverage
If you or a family member needs mental health or substance use services, confirm that the plan has an adequate network of behavioral health providers and that coverage meets parity requirements.
Documents and terms you’ll see with managed care
- Evidence of Coverage (EOC) — a detailed document from the MCO explaining what is covered, what is excluded, and what cost-sharing applies. Review this when you first enroll. See evidence of coverage in the glossary.
- Prior authorization — a requirement that your provider get plan approval before certain procedures or medications are covered. See prior authorization in the glossary.
- Formulary — the plan’s list of covered prescription drugs, organized into tiers with different cost-sharing levels. See formulary in the glossary.
Your primary care provider
In most Medicaid MCOs, you are required to designate or are assigned to a primary care provider (PCP). Your PCP is your main point of care for routine visits, preventive services, and referrals. The PCP plays a coordination role: rather than seeing specialists independently, you typically go through your PCP for a referral.
Your PCP does not need to be a physician — nurse practitioners, physician assistants, and federally qualified health centers (FQHCs) often serve as PCPs in Medicaid managed care. If you need to change your PCP, contact the plan’s member services line; most plans allow changes within the plan’s network.
What managed care plans must cover
Federal law requires MCOs that contract with states to cover all required Medicaid benefits for the population they serve. States define the benefit package in their contract with each MCO, and MCOs cannot offer less than what the state’s Medicaid program requires. Required services typically include:
- Physician services, inpatient and outpatient hospital care
- Lab and imaging services
- Preventive and early periodic screening services (mandatory for children)
- Family planning services
- Emergency services — at any emergency facility, even out of network
- Mental health and substance use services
- Prescription drugs
MCOs may also offer supplemental benefits. Review your plan’s evidence of coverage documents for the specific list.
Switching plans and making changes
After you enroll, you have a window — typically 90 days — during which you can switch plans without needing to provide a reason. After that window, you can switch during the plan’s annual enrollment period. You may also be able to switch at other times for good cause, such as:
- You moved to a new area
- Your primary care provider left the plan’s network
- You have a complex medical need that the plan is not meeting
- The plan committed a violation of its contract
Contact your state Medicaid agency to request a plan change outside the open window and explain the reason.
Your rights: appeals, grievances, and fair hearings
If your managed care plan denies, reduces, or delays a service you believe you are entitled to, you have the right to appeal that decision within the plan. The plan must:
- Send you a written notice of the decision
- Explain the reason and the applicable criteria
- Tell you how to appeal and the deadline
If the plan upholds the denial after your internal appeal, you have the right to request a state fair hearing — an independent review conducted by the state. You can also file a grievance (a complaint about service quality or treatment) through the plan’s grievance process.
Time limits on appeals are strict — typically 60 days from the date of the denial notice. If the service was already authorized and is being terminated or reduced, you may have the right to continue receiving the service at no cost while your appeal is pending, as long as you appeal before the termination date.
When managed care does not apply
Some Medicaid populations may remain in fee-for-service rather than managed care. This varies by state but often includes:
- People dually eligible for Medicare and Medicaid
- People in certain long-term care settings
- Native Americans enrolled in Indian Health Service facilities
- People in specific waiver programs
If you are unsure whether managed care applies to your enrollment, ask your state Medicaid agency directly.
Key terms
| Term | Plain meaning | Glossary |
|---|---|---|
| Managed care organization (MCO) | A private health plan contracted by a state to deliver Medicaid benefits, usually in exchange for a per-member per-month payment from the state | → |
| Primary care provider (PCP) | The doctor, nurse practitioner, or clinic designated as your main point of contact for routine health care within a managed care plan | → |
| Capitation | A fixed monthly payment a state makes to an MCO per enrolled member, regardless of how much care that member uses | → |
| Prior authorization | Approval from a health plan required before certain services are covered | → |
| Grievance | A formal complaint filed by a Medicaid member about a plan's services, quality of care, or treatment by a provider or plan staff | → |
Common questions
- What is Medicaid managed care?
- Medicaid managed care is a delivery model in which states contract with private health plans — called managed care organizations or MCOs — to provide Medicaid benefits to enrolled members. Instead of paying providers directly for each service, the state pays the MCO a fixed monthly amount per member, and the MCO manages coverage and coordinates care.
- Do I have to enroll in a managed care plan?
- In most states, the majority of Medicaid enrollees are required to enroll in a managed care plan. Some populations — such as people with very complex medical needs — may remain in fee-for-service Medicaid. Check with your state agency to understand whether managed care is required for your situation.
- How do I choose a Medicaid managed care plan?
- Your state Medicaid agency will send you information about available plans and a deadline for making a selection. Consider which plans include your current doctors and pharmacies in their network, what the plan's quality ratings are, and whether the plan covers any additional benefits such as dental or transportation.
- What if I don't choose a plan by the deadline?
- If you do not select a plan by the deadline, the state will auto-assign you to one. You typically have a window — often 90 days — to switch plans after enrollment without needing a reason.
- Can I change my managed care plan?
- Yes. In most states, you can change your Medicaid managed care plan at certain times during the year. You can typically switch during an annual open enrollment period or within the first 90 days of enrollment. After that window, changes are usually allowed only for good cause, such as moving or losing access to your doctor.
- Does my managed care plan cover all the same services as Medicaid?
- Managed care plans must cover all required Medicaid benefits as defined by the state. However, the specific providers in the network, the formulary for prescription drugs, and any additional benefits vary by plan. Review the plan's evidence of coverage documents carefully.
- What can I do if my managed care plan denies a service?
- You can appeal the denial. The plan must give you written notice of any denial and an explanation of how to appeal. You also have the right to a state fair hearing if you are dissatisfied with the plan's decision. Time limits apply, so act promptly when you receive a denial.
- What is a grievance in managed care?
- A grievance is a complaint about any aspect of your plan's service or quality of care — not a denial of benefits, but a concern about how you were treated or how care was delivered. Plans must have a grievance process and respond within defined timeframes.
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Last reviewed: September 2026