DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland   21244-1850 
 
Center for Medicaid and CHIP Services 
 
 
CMCS Informational Bulletin 
 
DATE:   November 19, 2012 
 
FROM:   Cindy Mann 
Director 
       
SUBJECT:   Medicaid Managed Care Quality Oversight Support for State Quality Strategy and 
External Review Processes 
 
The Centers for Medicare and Medicaid Services (CMS) is pleased to announce the availability 
of new resources for Medicaid managed care oversight.  As of 2012, 39 states, the District of 
Columbia, and Puerto Rico contract with either a Medicaid managed care organization (MCO) or 
a prepaid inpatient health plan (PIHP) to provide medical or behavioral health care to at least half 
of the approximately 60 million Medicaid beneficiaries.  These updated resources (described 
below) are intended to support states and their partners in providing better care, improving the 
health outcomes, and reducing the cost of care to Medicaid beneficiaries enrolled in MCOs or 
PIHPs:    
 
  Quality Strategy Toolkit for states, 
  EQR Toolkit for states and External Quality Review Organizations (EQRO), and 
  Revised CMS Protocols for External Quality Review (EQR). 
 
Quality Strategy Toolkit for States 
 
All states contracting with a MCO or PIHP must have a written and CMS-approved strategy for 
assessing and improving the quality of managed care services offered by the state.  To assist in 
this effort, CMS has updated the State Quality Strategy Toolkit to guide states through the 
development, writing, and implementation of the quality strategy.  This document is available at: 
http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Quality-of-
Care/Quality-of-Care-External-Quality-Review.html 
 
External Quality Review Toolkit for States 
 
All states contracting with a MCO or PIHP must conduct an annual EQR of each managed care 
entity.  An EQR includes the analysis and evaluation of aggregated information on quality, 
timeliness, and access to the health care services that a MCO, PIHP, or their contractors, furnish 
to Medicaid beneficiaries. CMS has created a new EQR Toolkit to assist states and EQROs in 
completing the annual EQR technical report.  This toolkit is available at:  
 
  Page 2  CMCS Informational Bulletin 
 
 
http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Quality-of-
Care/Quality-of-Care-External-Quality-Review.html.   
 
External Quality Review Protocols 
 
CMS has revised its series of protocols for use in conducting Medicaid external quality review 
activities. Each protocol describes why the activity is important to EQR, what the activity 
accomplishes, and how to conduct the activity.  The updated EQR Protocols are available at: 
http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Quality-of-
Care/Quality-of-Care-External-Quality-Review.html 
 
States may perform EQR tasks directly, or may contract with independent entities called EQROs 
to conduct the external quality review.  We request that states have final EQR technical reports 
available to CMS and the public by April of each year, to align with the collection and annual 
reporting on managed care data by the Secretary of Health and Human Services each Fall. 
 
Additional Online Web Resources 
 
  CMS Medicaid Quality of Care, available at: http://www.medicaid.gov/Medicaid-CHIP-
Program-Information/By-Topics/Quality-of-Care/Quality-of-Care.html 
 
  CMS Core Set of Child and Adult Performance Measures, available at: 
http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Quality-of-
Care/Quality-of-Care--Performance-Measurement.html 
 
  Annual Report on the Quality of Care for Children in Medicaid and CHIP, available at: 
http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Quality-of-
Care/Quality-of-Care.html 
 
  National Strategy for Quality Improvement in Health Care, available at: 
http://www.healthcare.gov/law/resources/reports/quality03212011a.html 
 
We hope you will find this information helpful.  Questions regarding these materials may be 
directed to Kristin Younger at Kristin.Younger@cms.hhs.gov or Melanie Johnson at 
Melanie.Johnson@cms.hhs.gov.