On March 5 and 6, 2026, the Medicaid and Children’s Health Insurance Program (CHIP) Payment and Access Commission (MACPAC) held a public meeting, which included the following sessions:

• Automation in the Medicaid Prior Authorization Process: Policy Options;
• State and Federal Tools for Ensuring Accountability of Medicaid Managed Care Plans: Draft Recommendations;
• Exploring the Role of the State Medicaid Agency in the Program of All-Inclusive Care for the Elderly: Interview Findings; and
• Provider Enrollment and Credentialing in Medicaid.

The full meeting agenda and session presentations are available here.

MACPAC Reviews Policy Options for Automation in the Medicaid Prior Authorization Process

In this session, MACPAC staff analyzed how automation is being used in Medicaid prior authorization (PA), the availability of information around implementing and using automation, current state and federal policies that regulate automation in PA, and potential risks of adopting automation into PA processes.

PA is intended to reduce costs by promoting appropriate, cost-effective care. Although some research shows that PA can reduce costs without negatively impacting care, concerns have been raised about the possibility of PA delaying or denying needed care and the administrative costs of PA for providers. Statutes and regulations give states authority to implement PA in their fee-for-service (FFS) Medicaid programs, and federal regulations require that state managed care contracts permit managed care plans to implement PA that meet standards for timeliness, reporting, and clinical review of PA. CMS conducts oversight of FFS programs and reviews and approves state managed care contracts. The Interoperability and Prior Authorization Final Rule[1] subjects both FFS and managed care programs to additional timeliness, transparency and reporting, and Application Programming Interface (API) requirements beginning in 2026.

States and managed care plans are using AI and algorithms in Medicaid PA but are not using automation for final clinical decision making. Challenges with automated PA systems include a lack of transparency into how they work, their impact on costs and access to care, and limited federal guidance on automation in PA, along with varying state guidance. There is little knowledge of how automation is being used, how and why automation tools make PA decisions, and the approval and denial rates for automated systems. Automated PA systems can also have data bias or other programming flaws that increase adverse determination rates, which may not be readily visible. Additionally, current Medicaid regulations do not directly regulate, guide, or monitor the use of automation in PA, and states and managed care plans are reluctant to implement these systems due to the absence of federal guidance and regulations. Varying state approaches have created a fragmented regulatory environment that is burdensome for providers, managed care plans, and IT vendors.

MACPAC staff highlighted the need for transparency in decision-making, the standardization of automation regulations across states, and the need for human involvement in PA as the use of technology continues to increase.

Policy Options

Based on these findings, staff presented four policy options:

1. Issue guidance clarifying that clinical expertise must be involved in reviewing and approving all adverse authorization decisions.

This policy option would encourage CMS to issue guidance clarifying that adverse decisions must be made by a human, consistent with enrollee clinical needs, and that automated systems alone should not authorize denials or partial denials. Guidance could also clarify how existing requirements for timeliness, notice, and appeals apply broadly, including within automated PA systems.

2. Amend regulations to indicate that adverse decisions in FFS utilization management (UM) programs must be made by a human with appropriate clinical expertise.

Staff recommended amending 42 CFR 440 to include the same PA requirements that apply to managed care under 42 CFR 438.210(b)(3). This would introduce the same requirements as policy option 1 to ensure that an individual clinician issues all adverse decisions that are consistent with enrollee needs and that automated systems alone do not authorize denials or partial denials.

Both policy options 1 and 2 would add a human expert safeguard to make adverse decisions and create consistency across states, FFS, and managed care. These options are intended to assure stakeholders that existing beneficiary protections remain unchanged under automation.

3. Issue guidance to states recommending oversight of Medicaid managed care plans’ use of automation tools.

Staff proposed state oversight to increase visibility into the impact of automated PA systems used to inform future policies. CMS was encouraged to issue guidance to include information about external quality review (EQR) processes; required plan-level appeals and denials reporting necessary for the Managed Care Program Annual Report (MCPAR) submitted by the state; ongoing program monitoring or contractually required reporting; readiness reviews for new contracts; and recommend that states mandate new reporting or other activities under Medicaid managed care contracts. In interviews, states endorsed CMS guidance on oversight.

4. States should use their managed care contracts with Medicaid managed care plans to require disclosure about the use of automation in the authorized processes.

This policy option would encourage states to require transparency related to automated PA systems, aligned with their policy and programmatic goals and needs. Furthermore, it encourages states to use managed care contract provisions to implement the guidance referenced in option 3 and to impose their own disclosure or reporting mandates to permit state oversight. In interviews, states reported little newly imposed oversight specific to automation in managed care.

Commissioner Discussion

Commissioner discussion focused on whether requiring human intervention within automated PA should be a requirement. Most commissioners expressed support for integrating clinical experts to ensure that all decisions reflect individual patient circumstances and are free of data bias. Commissioners also noted that mandating human involvement does not resolve potential bias issues, and that AI has been shown in other contexts to be more accurate than human experts in making determinations.

Regulation of automation in Medicaid PA was also discussed as a feasible and effective measure to increase transparency. Some commissioners asserted that a lack of clarity about how automation makes decisions, often reinforced by proprietary systems and intellectual property rights, makes it impossible to achieve complete clarity, and that too many guardrails could stifle innovation. Meanwhile, others argued that having a clear understanding of how automation makes decisions is critical, especially in cases where a patient or physician chooses to file an appeal.

All commissioners expressed support for standardized regulation of automated PA determinations. Streamlining language around the use of automation was cited as a way to ensure that AI continues to develop, allows providers to understand expectations across state lines, and empowers them to use new technology for improved efficiency and accuracy. Commissioners also shared unanimous concern about the role of automation in creating clinical standards, as opposed to applying existing criteria to cases. Finally, commissioners emphasized the need for better controls around what services can be subject to PA and how often that list could be modified, especially as automation makes PA faster and more affordable.

A chapter on PA automation is expected to be included in the June 2026 report to Congress.

Commission Considers Draft Recommendations for State and Federal Tools for Ensuring Accountability of Medicaid Managed Care Plans

In this session, MACPAC staff examined accountability tools available to states and CMS to ensure Medicaid managed care plans (MCOs) comply with federal and state requirements, building on prior work. Commissioners reviewed two draft recommendations aimed at strengthening MCO accountability.

Managed care is the dominant delivery system in Medicaid, with 74 percent of beneficiaries enrolled in MCOs, accounting for 54 percent of benefit spending in FY 2024. Although states generally reported having sufficient tools for oversight, there are significant gaps in how MCO performance data is collected, reported, and utilized.

MACPAC staff reviewed 2023 Managed Care Program Annual Reports (MCPARs) from 34 states and a collection of stakeholder interviews, which revealed several key gaps.

States frequently resolve issues through informal channels before escalating to formal sanctions, but MCPAR instructions lack clear guidance on what constitutes “informal intervention” and whether certain actions need to be reported. Public reporting of corrective action plans (CAPs) and other sanctions was identified as an important accountability tool.

MCPAR reporting was noted as inconsistent and incomplete; states are not reporting all compliance actions, which limits data usability. MACPAC’s MCPAR analysis found 359 CAPs from 25 states; 19 CAPs and liquidated damages from 2 states; 106 civil monetary penalties from 11 states; 187 liquidated damages from 10 states; and 66 compliance letter sanctions from 8 states. Variance in state MCPAR reporting could be due to unclear definitions, such as those for liquidated damage.

Performance data is currently scattered across multiple sources and lacks a centralized, user-friendly format, making it difficult for states to compare plans and limiting states’ ability to use the data for procurement processes or for beneficiaries to choose plans effectively. Managed care plans and states are required to report performance data to a variety of sources, including MCPARs and external quality reviews (EQRs). Several interviewees suggested that CMS could help states by developing a national database of plan deficiencies and sanctions.

Draft Recommendations

Recommendation 1:

1. Direct CMS to provide guidance on the types of accountability actions, such as liquidated damages and informal interventions, that should be reported on MCPARs and how states should report on MCPARs and how states should report them consistently.

This policy option would encourage CMS to provide guidance clarifying which types of accountability actions should be reported and how to report them consistently. Increasing standardization and consistency would improve understanding of how states use accountability tools and allow for more plan comparisons. Staff also proposed that CMS should determine a threshold for reporting informal intervention to balance capturing notable communications and actions while minimizing state burden. This builds on MAPAC’s March 2024 recommendations on MCPAR data quality for denials and appeals.

MACPAC suggests implications for various stakeholders include:

• Increased federal administrative effort.
• Some added state burden specific to adjustments of state internal tracking systems or processes to ensure they are capturing all required information consistently.
• Improved transparency for enrollees on how states hold plans accountable for performance.
• Indirect burdens if states request additional documentation.

Provider burden is not anticipated.

Recommendation 2:

2. Direct CMS to develop a publicly available database on managed care plan performance that links federally mandared reported data together, and issue guidance to help states effectively use these data.

This policy option encourages CMS to help states develop better tools to access and compare plan performance data across state lines and provide guidance to support managed care procurement capacity. Combining information across various federal reports would provide additional context and a more holistic view of plan performance. This policy option would build upon MACPAC’s prior March 2025 recommendation on EQR.

MACPAC suggests implications for various stakeholders include:

• Increased federal administrative effort to develop a public managed care plan database.
• Improved state understanding of complete and standardized plan performance with no additional reporting burden, as participation in learning collaboratives or use of toolkits would be voluntary.
• Improved beneficiary ability to assess plan performance and make informed decisions during plan selections, though there is potential for missing context in public reporting.

Provider burden is not anticipated.

Commissioner Discussion

Overall, Commissioners supported the recommendations, emphasizing that clear, transparent data and well-defined requirements are essential. They stressed the need for consistent definitions to ensure reporting, the importance of usable data, and that CMS can provide effective oversight. Commissioners also noted the importance of clarifying which informal interventions would be captured. They also cautioned against the use of overwhelming or outdated information due to reporting lags associated with MCPAR. Some suggested aligning the effort with the upcoming Medicaid Quality Rating System (QRS) to use standardized metrics.

The discussion also highlighted the value of CMS offering additional guidance and learning opportunities to help states use the information effectively while navigating procurement rules and avoiding unnecessary reporting burdens. The Commission generally supported the recommendations, with some clarifications and adjustments. Recommendation language will be developed and presented for a vote in an April 2026 MACPAC session, with a chapter planned for inclusion in the June 2026 report to Congress.

MACPAC Explores the Role of the State Medicaid Agency in The Program of All-inclusive Care For The Elderly (Pace)

In this session, MACPAC staff presented how states define and implement oversight of the Program of All-Inclusive Care for the Elderly (PACE) and identified gaps and areas of overlap with federal oversight efforts based on stakeholder interviews.

Interview questions posed to stakeholders focused on their interpretations of oversight and on how states monitor PACE quality and performance while navigating ambiguity in the federal–state division of oversight responsibilities. Staff found that interviewees generally acknowledged that states have the legal authority to oversee the PACE, though the interpretation and implementation of statutory oversight functions varied across states. Some officials described a narrower role that emphasizes collaboration with CMS, while others reported taking a broader, more proactive approach to oversight.

States rely on a combination of federal mechanisms and state-developed tools to monitor PACE organizations. These tools include audits, policy letters, provider manuals, regulations, licensing requirements, and clinical coverage policies, along with data submitted through CMS’s Health Plan Management System (HPMS) on enrollment, incidents, grievances, and quality indicators. Although PACE organizations report operational and quality data, such as falls, immunizations, and emergency department visits, there are no standardized national quality measures, and the data are not publicly released. Some states supplement these requirements with additional reporting, including participant satisfaction surveys commonly conducted using the Integrated Satisfaction Measurement for PACE (I-SAT) tool.

Several interviewees also highlighted limitations affecting oversight capacity. Some states cited resource constraints and the absence of standardized quality metrics as barriers to evaluating PACE performance, while others noted challenges coordinating oversight activities with federal partners. States with larger or expanding PACE programs reported greater pressure on oversight resources, and stakeholders frequently emphasized the need for greater national standardization of quality measurement to strengthen oversight and performance evaluation across programs.

Commissioner Discussion

Commissioner discussion focused on the disconnect between state and federal oversight of the PACE program and the lack of national, standardized assessment metrics. One commissioner questioned the state’s use of the two-way interpretation, while another was concerned about the lack of transparency and accountability within the PACE program, especially when compared to other care models. In response to the latter concern, a commissioner countered by highlighting the exemplary anecdotes and testimonies given about the PACE program, which emphasize its favorable aspects, despite the need for more data and standardized metrics of performance evaluation. Addressing the two-way interpretation, staffers mentioned a positive perception amongst states that used it, explaining that it enabled simultaneous state oversight and the issuing of provider guidance; it may serve as a model for other states.

Overall, commissioners reached a consensus on the need for more data on the PACE program and less fragmentation of state oversight efforts, in addition to standardized metrics for program assessment. The Chair Commissioner reiterated these needs, placing emphasis on increased state capacity, better standards of measuring quality, and external coordination between states and federal officials. There were no draft recommendations, though staff noted they would present policy options in the upcoming April 2026 meeting.

MACPAC REVIEWS Provider Enrollment and Credentialing Processes in Medicaid

In this session, MACPAC provided an overview of federal requirements for Medicaid provider enrollment and credentialing, compared approaches in three states, and highlighted challenges affecting providers’ participation in Medicaid.

Provider credentialing is the process Medicaid managed care organizations (MCOs) and Medicaid agencies use to verify that network providers are qualified to deliver services within their specialty. Federal requirements for provider enrollment and credentialing include verifying licensure, screening fraud, waste, and abuse risks, and collecting required disclosures. States must also screen providers based on risk levels (limited, moderate, or high) reflecting the potential risk of fraud or program abuse associated with different provider types. Screening activities increase with risk level and may include enrollment eligibility, licensure checks, federal database checks, site visits, criminal background checks, and fingerprinting. States must also collect information on ownership and control, business transactions, affiliations, and criminal history, and must deny or terminate providers for certain reasons, such as recent criminal convictions related to federal health programs or termination from another Medicaid or Medicare programs. Providers must revalidate their enrollment every five years.

Federal regulations require states to establish uniform credentialing policies for MCOs and to ensure consistent application of these policies. MCOs must maintain separate provider agreements with network providers even when those providers are already enrolled with a state Medicaid agency.

States have similar processes in implementing provider enrollment and credentialing. However, when comparing states such as Ohio, Oregon, and Pennsylvania, MACPAC found differences in areas such as licensure requirements for out-of-state providers, reliance on screening conducted by Medicare or other states, additional database checks, and revalidation schedules. For example, Ohio requires some providers to revalidate every three years to align with credentialing cycles, while Oregon and Pennsylvania use the federal minimum five-year interval.

MACPAC staff highlighted three structural variations in managed care credentialing:

1. Decentralized systems, such as Pennsylvania’s, require providers to complete separate credentialing processes with each MCO, often using different forms and documentation.
2. Standardized credentialing systems, such as Oregon’s, which use standardized forms and documentation across MCOs.
3. Centralized credentialing systems, such as Ohio’s, use a single application to credential providers with multiple MCOs.

Staff noted that centralized approaches may reduce providers’ administrative burden but require additional infrastructure and coordination.

The chapter also discussed enrollment and credentialing challenges affecting certain provider types, including school-based service providers, doulas, community health workers, and peer support specialists. These providers may face additional barriers because they often practice outside traditional health care settings, may lack administrative resources, or must establish supervisory relationships with licensed providers before enrolling. In some cases, providers working in managed care networks may not be recognized by a state’s fee-for-service (FFS) Medicaid program and, therefore, may not be required to enroll directly with the state.

Challenges associated with enrollment and credentialing were highlighted. Specifically, due to administrative complexities, states may struggle to complete required screening activities within the recommended 60-day timeframe, particularly amid high application volume and resource constraints. Providers often report that the processes are complex and burdensome, particularly when they must enroll with multiple MCOs or Medicaid programs across states. Time and effort associated with building a supervisory relationship may also deter providers from enrolling. Providers practicing near state borders may face duplicative screening requirements because states frequently rely on their own screening processes rather than those conducted by Medicare or other states.

Commissioner Discussion

Commissioners focused much of their discussion on the administrative burden that enrollment and credentialing processes place on providers, particularly those in small practices or rural areas. Commissioners emphasized that while large health systems often have staff dedicated to handling administrative requirements, independent providers may struggle to navigate multiple enrollment and credentialing processes while awaiting reimbursement. Commissioners noted that delays in payment and the need to contract separately with multiple MCOs can discourage providers from participating in Medicaid.

Several commissioners discussed how credentialing requirements interact with broader provider participation issues in Medicaid managed care. Commissioners noted that providers who contract with multiple MCOs may be automatically assigned large patient panels by each plan, potentially exceeding their capacity to provide care. Commissioners expressed concern that these practices could contribute to provider burnout, limit patient access to care, and create inaccurate impressions of network adequacy.

Commissioners also explored policy opportunities to streamline enrollment and credentialing processes, including centralized credentialing systems, standardized application forms, and greater reliance on screening conducted by Medicare or other state Medicaid programs to reduce duplicative administrative work. However, some commissioners noted that implementing centralized credentialing systems can be costly and may not always achieve widespread provider adoption.

The discussion also highlighted the importance of examining how enrollment and credentialing policies affect different provider types. Commissioners encouraged staff to explore the experiences of long-term services and supports providers, behavioral health providers, Indian Health Service and tribal providers, and other nontraditional provider types that may face unique barriers to participation in Medicaid managed care networks.

Several commissioners suggested that future analysis should incorporate provider perspectives more directly, including examining the full administrative pathway providers must navigate to begin receiving Medicaid payments. Commissioners also encouraged staff to explore whether differences in state enrollment policies affect fraud prevention outcomes, provider participation, or access to care. Commissioners encouraged staff to refine the chapter based on feedback and to consider additional analysis of strategies that could reduce administrative burden while maintaining appropriate safeguards against fraud, waste, and abuse.

A chapter on Provider Enrollment and Credentialing in Medicaid is expected to be included in the MACPAC June 2026 report to Congress.

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This Applied Policy® Summary was prepared by Emma Hammer with support from the Applied Policy team of health policy experts. If you have any questions or need more information, please contact her at ehammer@appliedpolicy.com or 202-558-5272.

 

[1] CMS Interoperability and Prior Authorization Final Rule (CMS-0057-F). https://www.federalregister.gov/documents/2024/02/08/2024-00895/medicare-and-medicaid-programs-patient-protection-and-affordable-care-act-advancing-interoperability