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State Medicaid contracts with managed care organizations (MCO), prepaid inpatient health plans (PIHP), and prepaid ambulatory health plans (PAHP) that started on or after July 1, 2017 must meet new federal Medicaid managed care rate requirements under rules finalized in on June 29, 2016. Under the new requirements, the capitated rates paid to the MCOs, PIHPs, and PAHPs must be actuarially sound, and the state cannot include pass-through payments to the MCOs. By July 1, 2019, the plans must have a medical loss ratio of at least 85%. The capitated rates must cover all medical and administrative costs, taxes . . .
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