Should I Stay, or Should I Go? Provider Considerations for Leaving Medicaid Managed Care Organizations

As states transition from fee-for-service to Medicaid managed care, provider participation is critical for continuity of care. This study examines the factors influencing provider decisions to exit or consider exiting Medicaid managed care organizations (MCOs) following North Carolina's transition to managed care, implemented via a federal Section 1115 demonstration waiver.

We conducted semistructured interviews with 41 individuals representing 26 provider organizations between March and July 2022 and with 47 individuals from 36 provider organizations between March and May 2023.

Our sample included health systems leaders, providers, and administrators from health system-affiliated practices, independent practices, federally qualified health centers, and local health departments. We coded and analyzed data using a thematic analysis approach.

Of the 62 participating provider organizations, 34 considered staying with the same number of MCOs, 12 considered reducing the number of contracts, and 2 considered contracting with an additional MCO; others were undecided about their contracting decisions. Three primary themes emerged as drivers of provider exits from MCOs: (1) challenges in the contracting process, (2) increased administrative burden due to operational complexity, and (3) tension between sustaining access to care and maintaining organizational viability. Although many providers initially contracted with all MCOs, persistent operational inefficiencies led some to reduce or reconsider participation.

The complexity of managing multiple MCOs is a key factor in provider decisions to exit managed care networks. Policy reforms to standardize operational processes, improve transparency in contracting, and align administrative demands with reimbursement structures are critical to sustaining provider participation and ensuring patient access to care.