CFR > Title 42 - Public Health > CHAPTER IV—CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES > SUBCHAPTER C—MEDICAL ASSISTANCE PROGRAMS (parts 430 to 456) > PART 438—MANAGED CARE > SUBPART D—Quality Assessment and Performance Improvement (§438.200 to §438.242) > 438.230—Subcontractual relationships and delegation.

438.230—Subcontractual relationships and delegation.

(a) General rule. The State must ensure, through its contracts, that each MCO, PIHP, and PAHP—
(1) Oversees and is accountable for any functions and responsibilities that it delegates to any subcontractor; and
(2) Meets the conditions of paragraph (b) of this section.
(b) Specific conditions. (1) Before any delegation, each MCO, PIHP, and PAHP evaluates the prospective subcontractor's ability to perform the activities to be delegated.
(2) There is a written agreement that—
(i) Specifies the activities and report responsibilities delegated to the subcontractor; and
(ii) Provides for revoking delegation or imposing other sanctions if the subcontractor's performance is inadequate.
(3) The MCO, PIHP, or PAHP monitors the subcontractor's performance on an ongoing basis and subjects it to formal review according to a periodic schedule established by the State, consistent with industry standards or State MCO laws and regulations.
(4) If any MCO, PIHP, or PAHP identifies deficiencies or areas for improvement, the MCO, PIHP, or PAHP and the subcontractor take corrective action.