Medicaid MCOsContracting → State MCO Contracts and Contract Amendments


State MCO Contracts and Contract Amendments


Contracts between the state and the Medicaid managed care organization (MCO) will need to be created or amended, at the discretion of the state, to include the National Diabetes Prevention Program (National DPP) lifestyle change program. Contracting varies across states, so processes and requirements will differ for each state and MCO. However, some provisions, such as services, rates, and cost reporting requirements, are likely to be found across contracts.

Some common elements recommended for inclusion in amended contracts between the state Medicaid agency and the Medicaid MCO include:

    • Program eligibility requirements
    • Description of covered services
    • Program promotion and enrollment expectations
    • Data sharing and reporting expectations
    • Rate information
    • Provider network expectations
    • Subcontractor requirements

The document below includes language related to these prospective contract elements. It is intended to be educational in nature, providing elements to consider when contracting between a state Medicaid agency (Agency) and a Medicaid managed care organization (MCO). Organizations should consult with an attorney or contract specialist when establishing such an agreement.

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For more information to support rate-setting, see the Reimbursement Models for Medicaid Agencies and MCOs page.


Timing and Opportunities for Including the National DPP Lifestyle Change Program in MCO Contracts

Medicaid MCO contracts are amended at the discretion of the state Medicaid agency. However, there are some specific opportunities that stakeholders should be aware of to influence the inclusion of the National DPP lifestyle change program in MCOs contracts. These include:

When new Medicaid MCOs are selected. States rebid their Medicaid MCO contracts through a process called procurement. When and how often states go through procurement varies from state to state, but typically procurement occurs every 3‒5 years. Minnesota, for example, by law requires MCO re-procurement to occur every five years. A state’s procurement cycle may be influenced by state procurement laws and rules, contract end dates, MCO performance, changes to the MCO landscape such as merger and acquisition activity, and other factors. States can engage in two types of procurement: a competitive bidding process where awards are given to the highest scoring, qualified bidders, or an “any willing plan” process where states can accept any willing and qualified bidder.

The procurement process provides an opportunity for new MCOs to enter the market and for the state to update MCO contracts to reflect current state priorities. Reference to the National DPP lifestyle change program can either be included in the state contract or in the request for proposal (RFP) that goes to interested health plans or other entities. For example, the contract and/or RFP can require plans to engage in population health or prevention-focused activities such as the National DPP lifestyle change program.

When MCO contracts are open to renewal. In some states, MCO contracts are open to renewal even if the state is not engaged in a formal rebidding process. This provides an opportunity for both the state Medicaid agency and the MCO to renegotiate contract terms and for the state Medicaid agency to enter into a rebidding process if contract terms cannot be agreed on. Renewal, however, may not change the base contract and in this case the state and the MCO could agree to an amendment that adds the National DPP lifestyle change program to the contract.

As designated in the MCO contract. Most MCO contracts include a clause that allows the state Medicaid agency to renegotiate contract terms on an annual or other regular basis.

Medicaid MCO procurements and contracts are public information and should be available on the state Medicaid agency website or as requested by the state Medicaid agency.

Content last updated: November 1, 2019

Content Updated: April 19, 2022