The default delivery system in Medicaid is fee for service, in which states establish fee schedules or other methods to pay providers directly for the Medicaid services that they provide to enrollees. In fee-for-service delivery systems, states must enroll any willing and qualified provider and beneficiaries can choose to visit any participating provider. States can establish their own provider qualifications and payment policies, but enrollees must have access to comparable benefits statewide.
Currently, however, most Medicaid enrollees receive services under managed care arrangements. The type and amount of care that managed care plans are responsible for varies. Almost 60 percent of Medicaid enrollees are enrolled in comprehensive managed care, which covers acute, primary, and specialty care services. Smaller shares of enrollees are in limited-benefit plans that cover specific types of benefits such as long-term services and supports or behavioral health care.
This fact sheet summarizes federal requirements and state options for delivering services under Medicaid.
From: Federal Requirements and State Options: How states exercise flexibility under a Medicaid state plan