Medicaid quality measurement is beginning to change. CMS is pushing states toward a greater focus on health outcomes, fewer duplicative measures, better use of digital data, and stronger connections between quality performance and financial accountability.
On September 25, 2026, CMS announced Investing in Health Outcomes, an initiative launched with 37 states through a voluntary Medicaid Quality Pledge. Participating states will use a common set of principles to evaluate their quality strategies, establish health outcome targets, and identify opportunities to incorporate more outcomes-oriented measures into future programs and procurements.
For Medicaid health plans, the announcement is another reason to look closely at how quality programs are structured today and whether existing data and performance strategies are ready for where CMS appears to be heading.
The challenge CMS is trying to address is not a lack of measurement.
A May 2026 CMS analysis of Medicaid managed care programs across 42 states identified approximately 450 reporting requirements representing roughly 260 unique quality measures across federal and state quality reporting programs. CMS found that many of those measures focus on processes and utilization, with variation among states adding additional reporting burden.
CMS now wants states to reconsider what they measure and how those measures are used.
The new Medicaid Quality Pledge centers on four principles:
Those principles matter because they shift the conversation from how much quality data Medicaid programs collect to whether that data helps states and health plans understand and improve member outcomes.
This work is happening alongside another significant change already underway for Medicaid managed care.
The 2024 Medicaid and CHIP Managed Care Access, Finance, and Quality Final Rule established a framework for the Medicaid and CHIP Quality Rating System (MAC QRS). States will eventually provide beneficiaries with a centralized website where they can compare managed care plans using quality ratings and other information, including provider networks and drug formularies.
That creates another reason for plans to think beyond regulatory submission.
As quality performance becomes easier for beneficiaries to see and compare, the ability to understand performance throughout the year becomes increasingly important. Waiting until a reporting period is complete to identify gaps leaves much less opportunity to improve the underlying care represented by those measures.
The fourth principle in CMS’s Medicaid Quality Pledge may ultimately be one of the most important for health plans: align financial accountability with outcomes-oriented measures.
CMS describes the four principles as a framework for future state implementation efforts. Participating states have committed to developing health outcome targets and considering opportunities to incorporate outcomes-oriented measures into state quality strategies and future procurements.
The details will continue to vary by state, and the Medicaid Quality Pledge itself is voluntary. Health plans should not assume that Medicaid will develop one national quality program that operates exactly like Medicare Advantage Stars.
But the broader direction is useful.
Quality measurement is increasingly being used to support decisions about performance, accountability, and payment. Plans need to understand which measures matter most, where performance gaps exist, and how improvement efforts affect results.
CMS is also calling for greater use of digital quality measurement, including near-real-time data instead of relying on claims and chart abstraction where feasible.
That could have significant operational implications.
More timely data gives plans an opportunity to identify gaps while there is still time to intervene. It can also reduce dependence on retrospective processes that require teams to spend significant time locating, validating, and reconciling information after the fact.
The goal should be a quality program where teams can see what is happening, understand why performance is moving, and take action before the measurement period is over.
CMS has described the Medicaid Quality Pledge as a starting point for future implementation efforts, so plans do not need to overhaul their quality programs based on this announcement alone.
They should, however, use it as an opportunity to evaluate their current capabilities.
Look at how quickly your team can access performance data. Identify where similar measures are being managed separately across programs or populations. Review whether your quality workflows primarily support retrospective reporting or give teams enough information to improve performance during the year. And pay close attention to how your state responds to the new CMS initiative, particularly through quality strategies, procurements, and value-based arrangements.
The specific requirements will continue to evolve, but CMS has made its priorities clear. Medicaid quality programs should produce useful information about health outcomes, reduce unnecessary reporting burden, make better use of digital data, and create meaningful accountability for performance.
For health plans, preparing for that direction starts with having the data and performance visibility to understand where you stand today.