(a) Definitions. As used in this subpart, the following terms have the indicated meanings:

Measurement period means the period for which data are collected for a measure or the performance period that a measure covers.

Measurement year means the first calendar year and each calendar year thereafter for which a full calendar year of claims and encounter data necessary to calculate a measure are available.

Medicaid managed care quality rating system framework (QRS framework) means the mandatory measure set identified by CMS in the Medicaid and CHIP managed care quality rating system technical resource manual described in § 438.530, the methodology for calculating quality ratings described in § 438.515, and the website display described in § 438.520 of this subpart.

Medicare Advantage and Part D 5-Star Rating System (MA and Part D quality rating system) means the rating system described in subpart D of parts 422 and 423 of this chapter.

Qualified health plan quality rating system (QHP quality rating system) means the health plan quality rating system developed in accordance with 45 CFR 156.1120.

Quality rating means the numeric or other value of a quality measure or an assigned indicator that data for the measure is not available.

Technical resource manual means the guidance described in § 438.530.

Validation means the review of information, data, and procedures to determine the extent to which they are accurate, reliable, free from bias, and in accord with standards for data collection and analysis.

(a) General rule. As part of its quality assessment and improvement strategy for its managed care program, each State contracting with an applicable managed care plan, as described in paragraph (b) of this section, to furnish services to Medicaid beneficiaries—

(1)(i) Must adopt the QRS framework developed by CMS, which must implement either the MAC QRS methodology developed by CMS or an alternative MAC QRS rating methodology approved by CMS in accordance with § 438.515(c) of this subpart.

(ii) May, in addition to the MAC QRS framework adopted under paragraph (a)(1)(i) of this section, implement website features in addition to those identified in § 438.520(a), as described in § 438.520(c).

(2) Must implement such managed care quality rating system by the end of the fourth calendar year following July 9, 2024, unless otherwise specified in this subpart.

(3) Must use the State's beneficiary support system implemented under § 438.71 to provide the services identified at § 438.71(b)(1)(i) and (ii) to beneficiaries, enrollees, or both seeking assistance using the managed care quality rating system implemented by the State under this subpart.

(b) Applicability. The provisions of this subpart apply to States contracting with MCOs, PIHPs, and PAHPs for the delivery of services covered under Medicaid. The provisions of this subpart do not apply to Medicare Advantage Dual Eligible Special Needs Plans that contract with States for only Medicaid coverage of Medicare cost sharing.

(c) Continued alignment. To maintain the QRS framework, CMS aligns the mandatory measure set and methodology described in §§ 438.510 and 438.515 of this subpart, to the extent appropriate, with the qualified health plan quality rating system developed in accordance with 45 CFR 156.1120, the MA and Part D quality rating system, and other similar CMS quality measurement and rating initiatives.

(a) Measures required. The quality rating system implemented by the State—

(1) Must include the measures that are:

(i) In the mandatory QRS measure set identified and described by CMS in the Medicaid and CHIP managed care quality rating system technical resource manual, and

(ii) Applicable to the State because the measures assess a service or action covered by a managed care program established by the State.

(2) May include other measures identified by the State as provided in § 438.520(c)(1).

(b) Subregulatory process to update mandatory measure set. Subject to paragraph (d) of this section, CMS will—

(1) At least every other year, engage with States and other interested parties (such as State officials, measure experts, health plans, beneficiary advocates, tribal organizations, health plan associations, and external quality review organizations) to evaluate the current mandatory measure set and make recommendations to CMS to add, remove or update existing measures based on the criteria and standards in paragraph (c) of this section; and

(2) Provide public notice and opportunity to comment through a call letter (or similar subregulatory process using written guidance) on any planned modifications to the mandatory measure set following the engagement described in paragraph (b)(1) of this section.

(c) Standards for adding mandatory measures. Based on available relevant information, including the input received during the process described in paragraph (b) of this section, CMS will add a measure in the mandatory measure set when each of the standards described in (c)(1) through (3) of this section are met.

(1) The measure meets at least 5 of the following criteria:

(i) Is meaningful and useful for beneficiaries or their caregivers when choosing a managed care plan;

(ii) Aligns, to the extent appropriate, with other CMS programs described in § 438.505(c);

(iii) Measures health plan performance in at least one of the following areas: customer experience, access to services, health outcomes, quality of care, health plan administration, and health equity;

(iv) Presents an opportunity for managed care plans to influence their performance on the measure;

(v) Is based on data that are available without undue burden on States, managed care plans, and providers such that it is feasible to report by many States, managed care plans, and providers;

(vi) Demonstrates scientific acceptability, meaning that the measure, as specified, produces consistent and credible results;

(2) The proposed measure contributes to balanced representation of beneficiary subpopulations, age groups, health conditions, services, and performance areas within a concise mandatory measure set, and

(3) The burdens associated with including the measure does not outweigh the benefits to the overall quality rating system framework of including the new measure based on the criteria listed in paragraph (c)(1) of this section.

(4) When making the determinations required under paragraphs (c)(2) and (3) of this section, to add, remove, or update a measure, CMS may consider the measure set as a whole, each specific measure individually, or a comparison of measures that assess similar aspects of care or performance areas.

(d) Removing mandatory measures. CMS may remove existing mandatory measures from the mandatory measure set if—

(1) After following the process described in paragraph (b) of this section, CMS determines that the measure no longer meets the standards described in paragraph (c) of this section;

(2) The measure steward (other than CMS) retires or stops maintaining a measure;

(3) CMS determines that the clinical guidelines associated with the specifications of the measure change such that the specifications no longer align with positive health outcomes; or

(4) CMS determines that the measure shows low statistical reliability under the standard identified in §§ 422.164(e) and 423.184(e) of this chapter.

(e) Updating existing mandatory measures. CMS will modify the existing mandatory measures that undergo measure technical specifications updates as follows—

(1) Non-substantive updates. CMS will update changes to the technical specifications for a measure made by the measure steward; such changes will be in the technical resource manual issued under paragraph (f) of this section and § 438.530. Examples of non-substantive updates include those that:

(i) Narrow the denominator or population covered by the measure.

(ii) Do not meaningfully impact the numerator or denominator of the measure.

(iii) Update the clinical codes with no change in the target population or the intent of the measure.

(iv) Provide additional clarifications such as:

(A) Adding additional tests that would meet the numerator requirements;

(B) Clarifying documentation requirements;

(C) Adding additional instructions to identify services or procedures; or

(D) Adding alternative data sources or expanding of modes of data collection to calculate a measure.

(2) Substantive updates. CMS may adopt substantive updates to a mandatory measure not subject to paragraphs (e)(1)(i) through (iv) of this section only after following the process specified in paragraph (b) of this section.

(f) Finalization and display of mandatory measures and updates. CMS will finalize modifications to the mandatory measure set and the timeline for State implementation of such modifications in the technical resource manual. For new or substantively updated measures, CMS will provide each State with at least 2 calendar years from the start of the measurement year immediately following the release of the annual technical resource manual in which the modification to the mandatory measure set is finalized to display measurement results and ratings using the new or updated measure(s).

(a) Quality ratings. For each measurement year, the State must ensure that—

(1) The data necessary to calculate quality ratings for each quality measure described in § 438.510(a)(1) of this subpart are collected from:

(i) The State's contracted managed care plans that have 500 or more enrollees from the State's Medicaid program, to be calculated as described by CMS in the technical resource manual; and

(ii) Sources of Medicare data (including Medicare Advantage plans, Medicare providers, and CMS), the State's Medicaid fee-for-service providers, or both if all data necessary to calculate a measure cannot be provided by the managed care plans described in paragraph (a)(1) of this section and such data are available for collection by the State to the extent feasible without undue burden.

(2) Validation of data collected under paragraph (a)(1) of this section is performed, including all Medicaid managed care data and, to the extent feasible without undue burden, all data from sources described in paragraph (a)(1)(ii) of this section. Validation of data must not be performed by any entity with a conflict of interest, including managed care plans.

(3) A measure performance rate for each managed care plan whose contract covers a service or action assessed by the measure, as determined by the State, is calculated, for each quality measure identified under § 438.510(a)(1) of this subpart, using the methodology described in paragraph (b) of this section and the validated data described in paragraph (a)(2) of this section, including all Medicaid managed care data and, to the extent feasible without undue burden, all data from sources described in paragraph (a)(1)(ii) of this section.

(4) Quality ratings are issued by the State for each managed care plan for each measure that assesses a service or action covered by the plan's contract with the State, as determined by the State under paragraph (a)(3) of this section.

(b) Methodology. The State must ensure that the quality ratings issued under paragraph (a)(4) of this section:

(1) Include data for all enrollees who receive coverage through the managed care plan for a service or action for which data are necessary to calculate the quality rating for the managed care plan including Medicaid FFS and Medicare data for enrollees who receive Medicaid benefits for the State through FFS and managed care, are dually eligible for both Medicare and Medicaid and receive full benefits from Medicaid, or both).

(2) Are issued to each managed care plan at the plan level and by managed care program, so that a plan participating in multiple managed care programs is issued distinct ratings for each program in which it participates, resulting in quality ratings that are representative of services provided only to those beneficiaries enrolled in the plan through the rated program.

(c) Alternative QRS methodology. (1) A State may apply an alternative QRS methodology (that is, other than that described in paragraph (b) of this section) to the mandatory measures described in § 438.510(a)(1) of this subpart provided that—

(i) The ratings generated by the alternative QRS methodology yield information regarding managed care plan performance which, to the extent feasible, is substantially comparable to that yielded by the methodology described in § 438.515(b) of this subpart, taking into account such factors as differences in covered populations, benefits, and stage of delivery system transformation, to enable meaningful comparison of performance across States.

(ii) The State receives CMS approval prior to implementing an alternative QRS methodology or modifications to an approved alternative QRS methodology.

(2) To receive CMS approval for an alternative QRS methodology, a State must:

(i) Submit a request for, or modification of, an alternative QRS methodology to CMS in a form and manner and by a date determined by CMS; and

(ii) Include the following in the State's request for, or modification of, an alternative QRS methodology:

(A) The alternative QRS methodology to be used in generating plan ratings;

(B) Other information or documentation specified by CMS to demonstrate compliance with paragraph (c)(1) of this section; and

(C) Other supporting documents and evidence that the State believes demonstrates compliance with the requirements of (c)(1)(i) of this section.

(3) Subject to requirements established in paragraphs (c)(1)(i) and (ii) and (c)(2) of this section, the flexibility described in paragraph (c)(1) of this section permits the State to request and receive CMS approval to apply an alternative methodology from that described in paragraph (b)(1) and (2) of this section when calculating quality ratings issued to health plans as required under paragraph (a)(4) of this section. CMS will not review or approve an alternative methodology request submitted by the State that requests to implement a MAC QRS that—

(i) Does not comply with—

(A) The requirement to include mandatory measures established in § 438.510(a)(1).

(B) The general requirements for calculating quality ratings established in paragraphs (a)(1) through (4) of this section.

(C) The requirement to include the website features identified in § 438.520(a)(1) through (6) established in § 438.520(a).

(ii) Requests to include plans that do not meet the threshold established in paragraph (a)(1)(i) of this section, which is permitted without CMS review or approval.

(iii) Requests to implement additional measures or website features, which are permitted, without CMS review or approval, as described § 438.520(c).

(d) Request for implementation extension. In a form and manner determined by CMS, the State may request a one-year extension to the implementation date specified in this subpart for one or more MAC QRS requirements established in paragraph (b) of this section.

(1) A request for extension of the implementation deadline for the methodology requirements in this section must meet the following requirements:

(i) Identify the specific requirement(s) for which an extension is requested and;

(ii) Include a timeline of the steps the State has taken to meet the requirement as well as an anticipated timeline of the steps that remain;

(iii) Explain why the State will be unable to fully comply with the requirement by the implementation date, which must include a detailed description of the specific barriers the State has faced or faces in complying with the requirement; and

(iv) Include a detailed plan to implement the requirement by the end of the one-year extension including, but not limited to, the operational steps the State will take to address identified implementation barriers.

(2) The State must submit an extension request by September 1 of the fourth calendar year following July 9, 2024.

(3) CMS will approve an extension for 1 year if it determines that the request:

(i) Includes the information described in paragraph (d)(1) of this section;

(ii) Demonstrates that the State has made a good-faith effort to identify and begin executing an implementation strategy but is unable to comply with the specified requirement by the implementation date identified in this subpart; and

(iii) Demonstrates that the State has an actionable plan to implement the requirements by the end of the 1-year extension.

(e) Domain ratings. After engaging with States, beneficiaries, and other interested parties, CMS implements domain-level quality ratings, including care domains for which States are required to calculate and assign domain-level quality ratings for managed care plans, a methodology to calculate such ratings, and website display requirements for displaying such ratings on the MAC QRS website display described in § 438.520.

(a) website display requirements. In a manner that complies with the accessibility standards outlined in § 438.10(d) of this part and in a form and manner specified by CMS, the State must prominently display and make accessible to the public on the website required under § 438.10(c)(3):

(1) Information necessary for users to understand and navigate the contents of the QRS website display, including:

(i) A statement of the purpose of the Medicaid managed care quality rating system, relevant information on Medicaid, CHIP and Medicare and an overview of how to use the information available in the display to select a quality managed care plan;

(ii) Information on how to access the beneficiary support system described in § 438.71 to answer questions about using the State's managed care quality rating system to select a managed care plan; and

(iii) If users are requested to input user-specific information, including the information described in paragraph (a)(2)(i) of this section, an explanation of why the information is requested, how it will be used, and whether it is optional or required to access a QRS feature or type of information.

(2) Information that allows beneficiaries to identify managed care plans available to them that align with their coverage needs and preferences including:

(i) All available managed care programs and plans for which a user may be eligible based on the user's age, geographic location, and dually eligible status, if applicable, as well as other demographic data identified by CMS;

(ii) A description of the drug coverage for each managed care plan, including the formulary information specified in § 438.10(i) and other similar information as specified by CMS;

(iii) Provider directory information for each managed care plan including all information required by § 438.10(h)(1) and (2) and such other provider information as specified by CMS;

(iv) Quality ratings described at § 438.515(a)(4) that are calculated by the State for each managed care plan in accordance with § 438.515 for mandatory measures identified by CMS in the technical resource manual, and

(v) The quality ratings described in § 438.520(a)(2)(iv) calculated by the State for each managed care plan in accordance with § 438.515 for mandatory measures identified by CMS, stratified by dual eligibility status, race and ethnicity, and sex.

(3) Standardized information identified by CMS that allows users to compare available managed care plans and programs, including:

(i) The name of each managed care plan;

(ii) An internet hyperlink to each managed care plan's website and each available managed care plan's toll-free customer service telephone number;

(iii) Premium and cost-sharing information including differences in premium and cost-sharing among available managed care plans within a single program;

(iv) A summary of benefits including differences in benefits among available managed care plans within a single program and other similar information specified by CMS, such as whether access to the benefit requires prior authorization from the plan;

(v) Certain metrics, as specified by CMS, of managed care plan performance that States must make available to the public under subparts B and D of this part, including data most recently reported to CMS on each managed care program pursuant to § 438.66(e) of this part and the results of the secret shopper survey specified in § 438.68(f) of this part;

(vi) If a managed care plan offers an integrated Medicare-Medicaid plan or a highly or fully integrated Medicare Advantage D-SNP (as those terms are defined in § 422.2 of this chapter), an indication that an integrated plan is available and a link to the integrated plan's most recent rating under the Medicare Advantage and Part D 5-Star Rating System.

(4) Information on quality ratings displayed in accordance with paragraph (a)(2)(iv) of this section in a manner that promotes beneficiary understanding of and trust in the ratings, including:

(i) A plain language description of the importance and impact of each quality measure assigned a quality rating;

(ii) The measurement period during which the data used to calculate the quality rating was produced; and

(iii) Information on quality ratings data validation, including a plain language description of when, how and by whom the data were validated.

(5) Information or hyperlinks directing users to resources on how and where to apply for Medicaid and enroll in a Medicaid or CHIP plan.

(6) By a date specified by CMS, which shall be no earlier than 2 years after the implementation date for the quality rating system specified in § 438.505:

(i) The quality ratings described in paragraph (a)(2)(iv) of this section calculated by the State for each managed care plan in accordance with § 438.515 for mandatory measures identified by CMS, including the display of such measures stratified by dual eligibility status, race and ethnicity, sex, age, rural/urban status, disability, language of the enrollee, or other factors specified by CMS in the annual technical resource manual.

(ii) An interactive tool that enables users to view the quality ratings described at paragraph (a)(2)(iv) of this section, stratified by the factors described in paragraph (a)(6)(i) of this section.

(iii) For managed care programs with two or more participating plans—

(A) A search tool that enables users to identify available managed care plans within the managed care program that provide coverage for a drug identified by the user; and

(B) A search tool that enables users to identify available managed care plans within the managed care program that include a provider identified by the user in the plan's network of providers.

(b) Request for implementation extension. In a form and manner determined by CMS, the State may request a 1-year extension to the implementation date specified in this subpart for one or more of the requirements established under paragraphs (a)(2)(v) and (6) of this section.

(1) A request for extension of the implementation deadline for the website display requirements in this section must meet the requirements described in § 438.515(d)(1);

(2) For extensions of the website requirements specified in paragraph (a)(6) of this section, the extension request must be submitted no later than 4 months prior to the implementation date specified pursuant to paragraph (a)(6) of this section for those requirements; for extensions of the requirements specified in paragraphs (a)(2)(v) of this section, the extension request must be submitted no later than September 1, 2027.

(3) CMS will approve the State's request for a 1-year extension if CMS determines that the request meets the conditions described in § 438.515(d)(3).

(c) Additional website features. The State may choose to display additional website features not described in § 438.520(a) in their MAC QRS, or may choose to implement the features described in § 438.520(a)(6)(i) through (iv) before the date specified by CMS as described in paragraph (a)(6) of this section.

(1) Additional website features may include additional measures not included in the mandatory measure set described in § 438.510(a)(1), supplementary data on displayed quality measures, and extra interactive functions, and may be implemented without CMS review.

(2) If the State chooses to display quality ratings for additional measures as described in paragraph (c)(1) of this section, the State must:

(i) Obtain input on the additional measures, prior to their use, from prospective users, including beneficiaries, caregivers, and, if the State enrolls American Indians/Alaska Natives in managed care, consult with Tribes and Tribal Organizations in accordance with the State's Tribal consultation policy; and

(ii) Document the input received from prospective users required under paragraph (c)(2)(i) of this section, including modifications made to the additional measure(s) in response to the input and rationale for input not accepted.

(d) Continued consultation. CMS will periodically consult with States and interested parties including Medicaid managed care quality rating system users to evaluate the website display requirements described in this section for continued alignment with beneficiary preferences and values.

(a) Beginning in calendar year 2027, CMS will publish a Medicaid managed care quality rating system technical resource manual annually, which may be released in increments throughout the year. Subject to the limitation described in paragraph (a)(4) of this section, the technical resource manual must include all the following:

(1) Identification of all Medicaid managed care quality rating system measures, including:

(i) A list of the mandatory measures

(ii) Any measures newly added or removed from the prior year's mandatory measure set.

(iii) The subset of mandatory measures that must be displayed and stratified by factors such as race and ethnicity, sex, age, rural/urban status, disability, language, or such other factors as may be specified by the CMS in accordance with § 438.520(a)(2)(v) and (a)(6)(i).

(2) Guidance on the application of the methodology used to calculate and issue quality ratings as described in § 438.515(b).

(3) Measure steward technical specifications for mandatory measures.

(4) If the public notice and comment process described in § 438.510(b) of this subpart occurs in the calendar year in which the manual is published, a summary of interested party engagement and public comments received during the notice and comment process using the process identified in § 438.510(c) for the most recent modifications to the mandatory measure set including:

(i) Discussion of the feedback and recommendations received on potential modifications to mandatory measures;

(ii) The final modifications and the timeline by which such modifications must be implemented; and

(iii) The rationale for not accepting or implementing specific recommendations or feedback submitted during the consultation process.

(b) In developing and issuing the manual content described in paragraphs (a)(1) and (2) of this section, CMS will take into account whether stratification is currently required by the measure steward or other CMS programs and by which factors when issuing guidance that identifies which measures, and by which factors, States must stratify mandatory measures.

(c) No later than August 1, 2025, CMS will publish the information described at paragraph (a)(1) of this section for the initial mandatory measure set.

(a) Upon CMS' request, but no more frequently than annually, the State must submit a Medicaid managed care quality rating system report in a form and manner determined by CMS. Such report must include:

(1) The following measure information:

(i) A list of all mandatory measures identified in the most recent technical resource manual that indicates for each measure:

(A) Whether the State has identified the measure as applicable or not applicable to the State's managed care program under § 438.510(a)(1) of this subpart;

(B) For any measures identified as inapplicable to the State's managed care program, a brief explanation of why the State determined that the measure is inapplicable; and,

(C) For any measure identified as applicable to the State's managed care program, the managed care programs to which the measure is applicable.

(ii) A list of any additional measures the State chooses to include in the Medicaid managed care quality rating system as permitted under § 438.510(a)(2).

(2) An attestation that all displayed quality ratings for mandatory measures were calculated and issued in compliance with § 438.515, and a description of the methodology used to calculate ratings for any additional measures if such methodology deviates from the methodology in § 438.515.

(3) The documentation required under § 438.520(c), if including additional measures in the State's Medicaid managed care quality rating system.

(4) The date on which the State publishes or updates the quality ratings for the State's managed care plans.

(5) A link to the State's website for their Medicaid managed care quality rating system.

(6) The application of any technical specification adjustments used to calculate and issue quality ratings described in § 438.515(a)(3) and (4), at the plan- or State-level, that are outside a measure steward's allowable adjustments for a mandatory measure but that the measure steward has approved for use by the State.

(7) A summary of each alternative QRS methodology approved by CMS, including the effective dates for each approved alternative QRS.

(8) If all data necessary to calculate a measure described in § 438.510(a)(1) of this subpart cannot be provided by the managed care plans described in § 438.515(a)(1) of this subpart:

(i) A description of any Medicare data, Medicaid FFS data, or both that cannot, without undue burden, be collected, validated, or used to calculate a quality rating for the measure per § 438.515(a) and (b), including an estimate of the proportion of Medicare data or Medicaid FFS data that such missing data represent.

(ii) A description of the undue burden(s) that prevents the State from ensuring that such data are collected, validated, or used to calculate the measure, the resources necessary to overcome the burden, and the State's plan to address the burden.

(iii) An assessment of the impact of the missing data on the State's ability to fully comply with § 438.515(b)(1).

(b) States will be given no less than 90 days to submit such a report to CMS on their Medicaid managed care quality rating system.