Medicaid: State Directed Payments in Managed Care

When states use a Medicaid managed care delivery system, the contracted managed care organizations (MCOs) generally determine provider payment rates. However, in certain circumstances states may direct payments to providers through the MCOs in accordance with state-set criteria. In this report, GAO describes (1) the use of state directed payments in Medicaid, and (2) CMS's changes to guidance and oversight of these payments.