(a) General rule. Except as specified in paragraphs (b) and (c) of this section, a State that requires Medicaid beneficiaries to:

1. (1) Enroll in an MCO, PIHP, or PAHP, must give those beneficiaries a choice of at least two MCOs, PIHPs, or PAHPs.
2. (2) Enroll in a primary care case management system, must give those beneficiaries a choice from at least two primary care case managers employed or contracted with the State.
3. (3) Enroll in a PCCM entity, may limit a beneficiary to a single PCCM entity. Beneficiaries must be permitted to choose from at least two primary care case managers employed by or contracted with the PCCM entity.

(b) Exception for rural area residents.

1. (1) Under any managed care program authorized by any of the following, and subject to the requirements of paragraph (b)(2) of this section, a State may limit a rural area resident to a single MCO, PIHP, or PAHP:

   1. (i) A State plan amendment under section 1932(a) of the Act.
   2. (ii) A waiver under section 1115(a) of the Act.
   3. (iii) A waiver under section 1915(b) of the Act.

2. (2) To comply with this paragraph (b), a State, must permit the beneficiary—

   1. (i) To choose from at least two primary care providers; and

   2. (ii) To obtain services from any other provider under any of the following circumstances:

      1. (A) The service or type of provider (in terms of training, experience, and specialization) is not available within the MCO, PIHP, or PAHP network.

      2. (B) The provider is not part of the network, but is the main source of a service to the beneficiary, provided that—

         (1) The provider is given the opportunity to become a participating provider under the same requirements for participation in the MCO, PIHP, or PAHP network as other network providers of that type.

         (2) If the provider chooses not to join the network, or does not meet the necessary qualification requirements to join, the enrollee will be transitioned to a participating provider within 60 calendar days (after being given an opportunity to select a provider who participates).

      3. (C) The only plan or provider available to the beneficiary does not, because of moral or religious objections, provide the service the enrollee seeks.
      4. (D) The beneficiary's primary care provider or other provider determines that the beneficiary needs related services that would subject the beneficiary to unnecessary risk if received separately (for example, a cesarean section and a tubal ligation) and not all of the related services are available within the network.
      5. (E) The State determines that other circumstances warrant out-of-network treatment.
3. (3) As used in this paragraph (b), “rural area” is any county designated as “micro,” “rural,” or “County with Extreme Access Considerations (CEAC)” in the Medicare Advantage Health Services Delivery (HSD) Reference file for the applicable calendar year.

(c) Exception for certain health insuring organizations (HIOs). The State may limit beneficiaries to a single HIO if—

1. (1) The HIO is one of those described in section 1932(a)(3)(C) of the Act; and
2. (2) The beneficiary who enrolls in the HIO has a choice of at least two primary care providers within the entity.