Medicaid Managed Care Improvement Act of 1997

Medicaid Managed Care Improvement Act of 1997 - Amends title XIX (Medicaid) of the Social Security Act to add a new part B (Managed Care) under which States are authorized to require certain Medicaid-eligible individuals to enroll in a managed care arrangement with an entity generally of their choice (with changes in enrollment permitted once annually) that meets applicable specified requirements and is under contract with the State to provide or arrange for the provision of all medically necessary medical assistance specified in the contract on a prepaid basis without discriminating on the basis of health status or anticipated need for services as a condition of receiving Medicaid assistance.

Includes provisions for specialty and, under certain conditions, emergency care.

Provides for addressing the treatment of children with special needs.

Discusses certain protections afforded to enrollees, such as protecting them against the insolvency of managed care entities and against the failure of the State to pay such entities, as well as certain protections afforded to providers.

Provides the means for assuring quality care under Medicaid managed care, generally by subjecting each Medicaid managed care organization to an annual external independent review of the quality outcomes and timeliness of, and access to, the items and services specified in such organization's contract with the State.

Outlines anti-fraud and abuse provisions applicable to Medicaid and other managed care entities and organizations, such as those prohibiting affiliations with individuals debarred by Federal agencies and those prohibiting contracts with States without certain conflict-of-interest safeguards with respect to applicable State contracting personnel. Requires the Secretary of Health and Human Services to provide prior review and approval for Medicaid managed care contracts providing for expenditures in excess of $1 million.

Provides intermediate sanctions for noncompliance by managed care entities with various requirements under law or the entity's contract with the State.

Directs the Secretary to report to specified congressional committees on the effect of managed care entities on the delivery of and payment for the services traditionally provided through certain providers.

Directs the Secretary and the Comptroller General to analyze and submit a report to specified congressional committees on rates paid for hospital services under managed care entities.

Requires States to transmit to the Secretary certain information on hospital rates.

Requires the Institute of Medicine of the National Academy of Sciences to conduct a study and analysis of the quality assurance programs and accreditation standards applicable to managed care entities operating in the private sector or to such entities that operate under contracts under the Medicare program to determine if such programs and standards include consideration of the accessibility and quality of the health care items and services delivered under such contracts to low-income individuals.