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State sanctions may not affect Medicaid managed care.

Aparna Ramakrishnan1, Nathaniel M Tran2

  • 1University of Illinois Chicago, Chicago, IL.

The American Journal of Managed Care
|May 26, 2026
PubMed
Summary

States often fail to resolve sanctions against Medicaid managed care organizations (MCOs), leaving beneficiaries unprotected. Inconsistent enforcement and lack of clear federal guidelines contribute to unresolved compliance issues.

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Area of Science:

  • Health Policy
  • Public Administration
  • Healthcare Management

Background:

  • Medicaid managed care organizations (MCOs) are crucial for public fund utilization.
  • Sanctions are a primary mechanism for ensuring MCO accountability.
  • MCOs submit annual reports to the Centers for Medicare & Medicaid Services (CMS).

Purpose of the Study:

  • To analyze the effectiveness of state-imposed sanctions on MCOs.
  • To identify gaps in oversight regarding MCO compliance.
  • To assess the impact of unresolved sanctions on beneficiary protection.

Main Methods:

  • Analysis of 2023 MCO-CMS reports.
  • Review of state-level sanction enforcement data.
  • Assessment of sanction remediation rates.

Main Results:

  • One-fourth of state-levied sanctions against MCOs remain unremediated.
  • Significant variation exists in state approaches to enforcing standards and penalizing noncompliant MCOs.
  • Publicly available MCO reports highlight potential oversight deficiencies.

Conclusions:

  • Inconsistent state enforcement and a lack of clear CMS guidelines hinder effective MCO oversight.
  • Unresolved compliance issues pose risks to Medicaid beneficiaries.
  • Improved federal guidance is needed to ensure consistent sanction remediation and beneficiary protection.