Medicaid Managed Care and the Provision of Family Planning Services

Key Findings

State Policy Constraints and Open Enrollment

While MCOs maintain authority to determine many of the specific policies that govern their beneficiary populations, they must abide by state Medicaid policies, which they reported sometimes constrain their ability to provide comprehensive family planning care.

Eligibility is focused on pregnancy in non-expansion states. In some non-expansion states, women must rely on the state’s family planning waiver program, which provides access to family planning services for women living in low-income households who are not eligible for Medicaid. Otherwise, women are only covered during pregnancy, and do not qualify for family planning benefits outside of the six-week post-partum period. This was reported to limit a plan’s ability to provide members with the comprehensive family planning care they need.

Some state Medicaid programs have mandated the reimbursement methodology for LARC in the hospital setting. As discussed earlier, plans generally follow the state Medicaid reimbursement schedule. There is little incentive for plans to set their own policies to reimburse separately for a LARC device, if the state methodology includes it in the bundled payment for delivery. Plans reported that the state methodology prevents them from creating a separate payment above the regular negotiated delivery rate that would incentivize LARC insertion immediately post-partum. Again, this may largely be a result of barriers related to the claims system configuration. However, a few states have changed their policies to allow for separate payment of LARC post-partum.

Changes in Medicaid eligibility and churn of enrollees among MCOs present challenges to MCOs in managing their members’ care. One plan commented that once pregnant members give birth, they might be eligible for different types of Medicaid, and therefore might be moved from their plan. In addition, women in non-expansion states typically lose eligibility 60 days post-delivery. Plans reported that this instability in enrollment creates a disincentive for a plan to pay for LARC for a beneficiary that may soon not be a member of their plan. The cost savings that may incentivize a plan to promote post-partum LARC among their members is not fully realized if those members churn into another plan or are dropped from Medicaid shortly after their delivery and LARC placement.


Despite its classification of family planning as a mandatory benefit, CMS has never formally defined what services and supplies must be included in that category. The Social Security Act authorizing Medicaid outlines the approved benefits as “family planning services and supplies furnished (directly or under arrangements with others) to individuals of child-bearing age (including minors who can be considered sexually active) who are eligible under the state plan and who desire such services and supplies.”1 Without explicit federal guidance in the definition of family planning services, state Medicaid offices are able to design their own benefit packages as well as vary them across eligibility pathways, potentially omitting important services such as counseling services. In addition, coverage for abortion services is limited due to the Hyde Amendment which prohibits federal funding for abortions except in cases of rape, incest, or life endangerment of the mother. Only 15 states use their own funds to expand the circumstances in which abortion would be covered. The state Medicaid programs in Arizona and Illinois do not pay for abortions outside of circumstances permitted by Hyde despite court orders directing them to do so.

The HHS recently clarified that all 18 FDA-approved methods of contraception must be covered as prescribed under the ACA’s no-cost preventive services, which affect Medicaid expansion populations (but not those who qualify through the traditional pre-ACA pathways). In addition, new guidelines released by CMS prohibited the use of certain utilization management techniques in the provision of family planning by MCOs.2 Quantity limits and prior authorization are not permissible if used for any other purpose other than to determine medical necessity or appropriateness, and step-therapy, or the practice of requiring the use of a particular type of contraception before moving to a more expensive version, is not allowed. However, in most states plans retain authority to determine the coverage of over-the-counter (OTC) contraception, as well as the number of cycles of contraception dispensed at one time, absent any state regulations.3

Emergency Contraception and Dispensing Limits

Emergency contraception is intended to prevent unintended pregnancy after unprotected sex or contraceptive failure. There are three types of emergency contraception: progestin-based pills (e.g. Plan B®), ulipristal acetate (ella®), and copper IUDs. While ella® is available by prescription only, Plan B® and other generic progestin-based pills are available OTC without a prescription for women of all ages. The ACA requires that Medicaid expansion programs cover emergency contraceptives with a prescription. Therefore, while these programs must cover ella® for their expansion populations, they are only required to cover Plan B® with a prescription. Some states also limit the number of months of oral contraceptives dispensed at one time to a beneficiary.

Most plans reported covering all forms of emergency contraception, including Plan B®, ella®, and the copper IUD. Although ella® is required to be covered for expansion populations, some plans reported challenges with coverage of the drug. A consultant suggested this was most likely due to a problem with plan formularies.

Most of the plans surveyed cover one or three months of oral contraceptives at one time. Although managed care plans have the leeway to cover more cycles of oral contraceptives than the state does under fee-for-service, only one plan who participated in the survey reported covering a full 12-month supply.

Over-the-Counter Contraception

The ACA requires prescription contraceptive methods to be covered for Medicaid expansion populations, but this requirement does not apply to OTC methods, such as condoms, spermicide, and sponges, obtained without a prescription. As a result, some states require a prescription for coverage of OTC methods, most likely due to the reimbursement mechanism to pharmacies in place for prescription drugs. However, plans may determine their own requirements for OTC contraception.

Most plans reported covering Plan B® and male condoms over the counter. Some plans also covered spermicides, sponges, and female condoms. Plan representatives confirmed that a Medicaid enrollee could potentially pay out of pocket for these items, if they did not pay at the pharmacy counter. However, one plan stated that the amount their plan spends on the OTC benefit suggests that members are aware of and utilizing this benefit by obtaining OTC contraceptives through the pharmacy.

Almost all plans reported requiring a prescription for OTC contraception, though strategies vary. Some reported exceptions for Plan B®, or that they allow a pharmacist to produce the prescription. This is the only way for health plans to track utilization and pay for claims directly. Plans may cover it either as an OTC benefit or as a pharmacy benefit. However, one plan noted that a member would have to read the member benefits manual closely in order to know what is required for a drug or product to be covered, suggesting that members may not be aware this is an option for them.

Billing and Reimbursement

In a managed care arrangement, the state Medicaid program and the health plan enter into a contract in which the state pays the plan a negotiated capitated rate, a fixed fee per individual enrolled in the plan, in order to provide comprehensive coordinated health care services to its Medicaid beneficiaries. CMS regulations require “actuarially sound capitation rates” that must cover all “reasonable, appropriate, and attainable costs of providing services under the contract.”4

The plan then pays its contracted providers for the services used by their members. Services can be reimbursed using various methodologies, such as a bundled payment or separate payments for each service. They might also be included in a capitated rate paid to a beneficiary’s primary care provider. Bundled payments are a single fixed fee paid for a set of related services. For example, pregnancy-related services are often paid for in a bundle, referred to in this case as a global fee. This means a provider will receive a fixed negotiated amount to provide routine care throughout the entire pregnancy, regardless of the number of visits or services the patient utilizes. The purpose of a bundled payment is to incentivize providers to reduce costs associated with unnecessary care, while also easing the administrative burden of billing for each individual service. Alternatively, a plan could pay a provider for each service separately after it is rendered to the plan member. While rates are set by the state, a health plan can pay more to providers in order to recruit them into their network, especially if there are a limited number of providers in their area.

State and plan reimbursement methodologies are crucial to the effective provision of the full-range of family planning services and supplies for women insured by Medicaid. Providers may be less inclined to contract with health plans or provide certain services or supplies to Medicaid beneficiaries if their actual costs are higher than the reimbursable amount. Lower provider payments may compromise a member’s right to see the family planning provider or use the method of contraception of their choice. In particular, out-of-network family planning providers may not be willing to see Medicaid patients because the administrative burden of billing the plan may not be worth the low rates of reimbursement.

Payment Methodology

All plans reported that family planning services are paid for individually, rather than as a separate family planning bundle. While family planning is a required benefit, MCOs may choose how they pay for these services as long as they are in accordance with state regulations. All plans in the study reported that these services are paid for as separate line items outside of the capitated fee paid to a primary care provider for each enrollee. For example, providers are paid a separate fee for LARC device insertion or removal, in addition to the cost of the device itself. They do not have a separate family planning bundled rate for these services.

Pregnancy is paid for using a single global fee, which can limit access to post-partum LARC and tubal ligation. Plans reported that many providers prefer this method of payment because they are paid the same amount regardless of the number of times they see the patient, and they do not have the administrative burden of billing for each encounter. However, plans noted certain problems in the payment and provision of post-partum LARC. Hospitals often will not be reimbursed separately for LARC insertions post-delivery despite the use of their facilities. This creates an incentive for the provider to wait until the six-week post-partum visit to charge a separate reimbursement. This practice may pose a barrier for women who miss their follow-up appointment, and therefore do not receive their desired LARC method and then subsequently lose their Medicaid eligibility 60 days’ post-partum.

Tubal ligation is also reimbursed as a separate payment outside of the global fee because Medicaid beneficiaries are required to sign an informed consent form at least 30 days prior to undergoing sterilization. Therefore, the procedure is essentially treated as a prior authorization, and paid for separately. Plans reported that billing for all pregnancy-related care as a single fee also prevents information about provider-patient encounters from being communicated to the plan in many cases until after the woman delivers, inhibiting their ability to customize and improve the coordination of their members’ care. For example, a plan would not be aware if their enrollees are underutilizing their prenatal care benefits. One plan expressed that if they were able to see this information, they could provide their members with additional education about post-partum contraception and when to see their provider.

Challenges with LARC

In general, plans follow the state Medicaid fee schedule and reimbursement methodology for post-partum LARC. Plans may set their own policy in regards to payment for post-partum LARC, however, there is little incentive for plans to facilitate access to LARCs for their enrollees. Plans reported that because many women on Medicaid lose eligibility after delivery, the cost savings to the plan is essentially lost if a patient provided with post-partum LARC is likely to be dropped from the plan. Only two plans surveyed provided a supplemental payment for immediate post-partum LARC (device and insertion) in hospitals, and only one of those plans did so in other provider settings as well. Many of the plans stressed that the unbundling of services during pregnancy would facilitate access to LARC during hospitalization post-delivery.

Innovative Practice 1: Post-Partum LARC Pilot Program
In partnership with the state Medicaid program, one plan is currently working with a local hospital to test a new reimbursement methodology to pay separately for immediate post-partum LARC. The initiative seeks to identify and fix problems that may arise before expanding to the rest of the state. The plan noted that the primary barrier to implementing this policy change has been the configuration of claims system, which has not yet been set up to facilitate billing and reimbursement between the hospital and the plan for the separate payment of immediate post-partum LARC. In order for physicians to provide LARC devices immediately post-delivery, both the hospital and the plan must create and align the reimbursement codes for that service.

Plans cited reimbursement for LARC devices, especially for immediate post-partum insertion, as a top challenge in providing family planning services to women on Medicaid. The health plans reported variation across state markets in the reimbursement for in-patient post-partum LARC. In states without a mandate to pay separately, hospitals have no incentive to provide post-partum LARC because the bundled reimbursement they receive from the plan for the delivery is not enough to cover the cost of the device. Currently, 21 states mandate separate payment for post-partum LARC above the regular negotiated rate for delivery. Some of these states use a modifier code to increase the bundled payment for delivery to pay for post-partum LARC devices and insertions. The majority of the states retain the bundled payment for delivery, and instead apply the fee-for-service rate for LARC in an office setting to inpatient hospital settings, paying separately for either the device only, or both the device and insertion.5

The administrative and financial burden of maintaining a stock of IUD devices can be too great for many providers. Although most plans reported that they allow women to get same-day LARC insertion, they cited significant barriers due to the difficulty and expense of stocking LARC devices. Difficulty stocking LARC may limit a woman’s ability to obtain an IUD the same day she requests it, requiring two appointments. For many women insured by Medicaid, it may be difficult to return for a second appointment, reducing the likelihood they will obtain their preferred method of contraception. Only one plan reported allowing providers to bill for the stocking of LARC.

Innovative Practice 2: Care Cart

One health plan has developed an innovative strategy to help providers stock LARC devices. In this model, the health plan pays the upfront costs to stock a “Care Cart,” similar to a Pyxis® system, on site with LARC devices and insertion tools for a low administrative fee paid by the provider, primarily community health centers and school-based clinics with on-site pharmacies. The pharmacy then bills the plan for the restocking of LARC devices as needed. The Care Cart model allows providers to keep LARC on-hand to facilitate same-day insertions which improves adherence and access to this effective method of contraception.

Plans recognized the challenges around incentivizing the use of LARC due to concerns about the appearance of coercion, or encouraging the selection of LARC to avoid pregnancy when it may not align with the preference of the members. However, most plans did not report this as a major problem that their plan has encountered. One plan indicated that they requested guidance from CMS about how to handle the balance between encouraging access and educating members, and coercion.

Network Adequacy and Provider Recruitment

The Medicaid program requires states to establish network adequacy standards for beneficiaries enrolled in managed care plans. These standards include factors such as the number and type of providers, time and distance to travel to see a provider, wait-times for appointments, geographic distribution of providers between rural and urban areas, provider to enrollee ratios, and a provider’s willingness to accept new patients. States have broad latitude to develop more specific network adequacy regulations, although they give MCOs significant leeway to create their own policies governing the recruitment and development of their network.

Network adequacy in the context of family planning providers is complicated by beneficiaries’ right to seek care from out-of-network Medicaid participating providers for these services. CMS addressed this issue in their recent guidelines. Although family planning providers are exempted from the CMS time and distance standards, CMS stated that the freedom of choice provision, while important, does not negate the “plan’s responsibility to ensure timely access within network.”6 CMS maintained that having sufficient family planning providers available within network would “facilitates claims payments, helps enrollees locate providers more easily and improves care coordination.”7

In their new rule, CMS also noted the ability of MCOs to use telemedicine or e-visits to meet network adequacy requirements.8 However, they provide no federal guidance other than encouraging states to create reimbursement methodologies to pay for services provided using telemedicine.9 The state has the flexibility to determine the conditions under which they will cover telemedicine, if at all, including type of service, provider, and location of care, as well as reimbursement rates. They can also decide the level of control the individual managed care plan retains in setting these policies. MCOs may contract with religiously-affiliated providers with a conscience objection to family planning, an additional consideration in the establishment of adequate networks for family planning services. States may also contract with religiously-affiliated MCOs; however, this study did not include any MCOs of this type.


Plans considered a variety of factors when recruiting family planning providers for their networks. Surveyed plans reported the factors that weigh most heavily in their decisions are the average distance to see a provider, provider type, geographic distribution, and a provider’s willingness to accept new patients. Plans participating in the focus groups reported that they do not focus narrowly on family planning providers when meeting access standards, but instead broadly recruit providers that offer a comprehensive range of services, including sexual and reproductive health care.

Plans contract with a majority of FQHCs in their area. They cited them as being particularly important because they are the providers their members are most likely to go to, and they provide a broad range of services, including family planning. Inclusion of other provider types such as school-based clinics, Planned Parenthood®, and state and local health departments varied by plan. No plans in the study reported problems developing an adequate network.

Some plans contract with specific providers that offer abortion services in non-Hyde states. Only 15 states use their own funds to pay for abortions outside of the Hyde exceptions of rape, incest, and life endangerment of the woman. However, even in those states, access to abortion counseling and services is often constrained by many state abortion restrictions and regulations. In addition, the controversial nature of the issue of abortion has complicated contracting with Planned Parenthood® in certain states. For example, in Texas and Missouri, plans reported that Planned Parenthood® is no longer an approved Medicaid provider, and therefore cannot reimburse their providers with Medicaid funds. Two plans surveyed do not contract with Planned Parenthood®, though this may also be due to the lack of clinics in their area.

Plans do not report using telehealth for family planning services. Some focus group participants noted that contraceptive counseling may make sense in the telehealth context, but there was a perception that telehealth had “limited applicability” for family planning services. Plans maintained that in order to provide comprehensive reproductive health care providers need to see the patient in the office.

Plans noted some challenges to the implementation of the freedom of choice provision. In particular, there is administrative burden in the reimbursement of out-of-network providers. However, other plans noted that because of robust network adequacy requirements, there are few instances where a plan member would go out of network for services. Although in-network and out-of-network providers are paid the same state Medicaid rates, providers have an incentive to join the network to become eligible for rapid electronic payments and to establish a regular patient base. A member who receives services from an out-of-network provider is often a new enrollee who wishes to keep their current provider. In these continuity of care cases, the out-of-network provider will bill the plan, which must pay the provider at the rate they were receiving from the previous payer. Therefore, the rate paid to an out-of-network provider is member-specific, and in many instances, may be higher than the Medicaid rate if the new member was previously enrolled in a private commercial plan before losing coverage.

Religious Providers

There are a growing number of religiously-affiliated hospitals in the United States. This growth has raised concerns that the rise in the number of religiously-affiliated hospitals can limit patient access to reproductive health care due to the religious restrictions that govern the services they provide.10 Some states, such as Texas, require plans to contract with religious providers who may have objections to family planning including contraception and abortion so that enrollees may choose to get their care at religious providers if they wish. However, Texas also includes provisions to ensure that the provider network is adequate for women who do not use those providers.

Religious providers may present a barrier to family planning care. In general, plans reported that they include Catholic hospitals and religiously-affiliated private provider offices in their networks. Catholic hospitals, in particular, were noted as presenting a barrier to family planning care for enrollees, especially for those hospitals located in rural areas or that do not have an unaffiliated clinic that provides these services. Plans reported that even in institutions located in urban areas that have implemented a work-around strategy to provide family planning care through another clinic, same-day access may be compromised. For example, a consultant cited the case of a religiously-affiliated academic medical institution on the East Coast that contracts with an FQHC to provide contraception in their university health center, but noted that the FQHC staff is only available on campus certain days of the week.

Plans reported that they do not have systems in place to notify enrollees of limits to care if they select a provider with “conscience” objections to family planning. Plans noted that the only way they would know if a member could not access a specific service, such as contraception, sterilization, or abortion, is if the member calls the plan’s member services or care coordinator/case manager to receive help finding access to those services elsewhere. This can act as a barrier to care for a member who may not know their provider is religious, and therefore is not counseling them on the full-range of family planning services. They may also not be informed about how to navigate the system in order to find a provider that will offer them the specific contraceptive services they desire.

Communication and Education

The Medicaid program’s significant protections for beneficiaries’ access to family planning services are only useful to the extent that enrollees are aware of them. Federal regulations require MCOs to inform their members of their right to go out of network for family planning services. CMS recently updated this rule, clarifying that enrollees must be informed that requiring a referral to see a family planning provider is not permitted.11 In addition, CMS requires plans to post certain information on their public website including the member handbook, provider directory, and drug formulary, as well as provide the information in paper form in prevalent languages upon request. The rule also clarifies that plans may notify members of required information by email with enrollee consent or by “any other method that can reasonably be expected to result in the enrollee receiving” it, though both email and texting are prohibited from being used for cold-call marketing.12 Beginning in July 2018, the new rule requires that plans implement a Beneficiary Support System (BSS) to assist enrollees in understanding their options within the managed care system such as enrollment and provider decisions. The BSS must be available via phone, internet, in-person, and auxiliary aids.13

Member Communication and Education

Plans reported that they rely heavily on providers to educate their members and communicate their health care options and rights to them. The plans also rely on care coordinators, member services, mailed paper notices, their website, and the member handbook for communication about the scope of reproductive health benefits and members’ rights. One plan reported conducting in-person, on-site member health promotion workshops in community settings. However, contact information may be hard to obtain or may be incorrect. In particular, plans reported that they found that addresses for individuals in the Medicaid population often change frequently within short periods of time.

Plans reported having face-to-face care coordination visits during pregnancy. Pregnancy is a primary point of contact between plans and their members, especially for plans in states that have not expanded Medicaid. However, although one plan emphasized the particular strength of MCOs in coordinating care for their members, this type of episodic coverage limits their ability to address a member’s general health or chronic conditions during the prenatal period alone.

Provider Education

In addition to effective communication strategies between plans and their members, the provision of family planning services requires trained providers skilled in addressing sensitive topics and educated in evidence-based family planning practices. While there are no federal regulations requiring MCOs to educate providers within their networks, the plans participating in this study acknowledged their important role with members but did not typically have formal programs in place to train in-network providers to educate members about family planning options.

Plans cited provider training and education in the provision of LARC as a top challenge in providing access to family planning services. One plan representative stressed that there is a lot of misinformation about LARC provision both for immediately post-partum and for young women and teens who have never given birth. Despite their reliance on providers as a key point of contact between the plan and the member, most plans report that they do not provide training for clinicians regarding enrollee education about post-partum contraception or sterilization. While some plans reported offering educational materials to providers to educate Medicaid enrollees about post-partum contraception or sterilization, the majority surveyed do not. One plan stated that many of their members are unaware of the need for a signed consent form and 30-day waiting period for sterilization.

Some plans and state Medicaid offices have implemented policies to educate providers on MCO plan policies. One plan sends email blasts to update providers on new plan policies. The New York state Medicaid office provides webinar and in-person seminars to train new Medicaid providers about billing practices, including those specific to managed care organizations, as well as instruct established providers about how to use the electronic claims system.14

Teen Outreach and Confidentiality

Although teen pregnancy and abortion rates are at all-time lows, they still remain an area of concern. Educating adolescents and minors about their rights to access family planning services, and communicating with them about their benefits requires targeted outreach strategies and confidentiality protections. Twenty-one states and the District of Columbia allow all minors to consent to contraceptive services, and 25 states allow minors who meet certain criteria to consent.15 However, there are no federal regulations governing the confidentiality of these services or the promotion of effective outreach to young adult and teen populations.

Some plans reported strategies to target outreach to minors, but most did not have any overarching approach to target teens or specific policies to protect their confidentiality. Half of the surveyed plans reported using provider education as a strategy to protect enrollee confidentiality, and three out of the eight plans reported using this strategy specifically for assuring confidentiality for adolescents and other dependents. However, one plan reported that a top challenge they encounter in providing access to women’s reproductive health and family planning services is providers’ lack of commitment to addressing sexuality with minors, as well as difficulty coordinating with school-based clinics to gain access to medical records. Plans noted that quality care coordination is easier during pregnancy, however, healthy teens and young adults often do not come to the attention of care management. One plan recognized the need to perform outreach to contact that population of members, though they noted cultural and political barriers in some states hinder the implementation of innovative outreach strategies. Another plan stated that state regulations governing how they can communicate with their members, such as opt-in requirements for texting, restrict their ability to do outreach effectively. Still, one plan reported sending annual targeted mailings to adolescents on a variety of sexual health topics and confidentiality requirements.

Quality Measures and Data

The Healthcare Effectiveness Data and Information Set (HEDIS) is a set of performance measures used widely by health plans to evaluate the quality of the care they provide. Health plans are also required to report Consumer Assessment of Healthcare Providers and Systems (CAHPS) data, a series of patient surveys evaluating the quality of their health care experiences. However, few quality standards exist for family planning services, and most states do not collect data to evaluate utilization and quality. The National Quality Forum (NQF) recently endorsed new measures to enhance the service value and quality in family planning specifically in regard to post-partum contraceptive care, access to LARC, and the use of most and moderately effective methods.16

Overall, plans are not evaluating the performance of family planning services for the purposes of quality reporting. In general, plans do not collect performance measures for family planning services beyond the HEDIS and NQF measures, nor do they analyze the data they do collect. Only one plan reported measuring contraceptive rates, and another plan looks at performance measures for various aspects of pregnancy care including prenatal care, post-partum follow-up, and C-section rates. The lack of quality measurement for family planning services has implications for the provision of high-quality, patient-centered care. However, it was also noted that performance measures incentivize providers, which can be challenging especially when dealing with LARC due to the appearance of coercion.

Plans reported that they do not measure if providers are offering the full-range of contraceptive methods. Most plans participating in the focus groups reported that they are not conducting any analysis in this area. Only one plan mentioned a new initiative led by the New York City Department of Health that is analyzing plan data to determine preferred methods of birth control. Another plan discussed the benefits of creating a reimbursement code for contraceptive counseling and education in order to incentivize and track its use. However, the plan conceded it would be difficult to get providers to use the code and to validate the data provided to the health plan.

State implemented bundled payments for maternity care and pregnancy limits much of the information that is available through encounter data. Since providers are paid for the entire episode of care in one single payment, they are not required to file claims or encounters for every visit. Therefore, a health plan may not be aware of services being provided to a member until after a claim is made by the provider. In many instances, this may not be until the post-partum period. One plan noted that this had an impact on their “ability to communicate effectively with members and incentivize them to go to their individual visits.” If members are underutilizing care, the plan’s ability to educate that member about prenatal and post-partum care is limited.

Introduction Conclusion

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