Category Archives: Medicaid

The “Rxisk” of adjustments in 2018 ACA risk adjustment

The Centers for Medicare and Medicaid Services (CMS) is adding a new prescription drug category classification system to the 2018 risk adjustment model. Starting in 2018, a condition will be identified through a Hierarchical Condition Category with associated medical diagnosis codes, a prescribed medication, or both—each one affecting the final risk member score differently. This paper by Milliman consultants approximates the likely CMS mapping based on the publicly available information to date.

Medicaid risk-based managed care: Analysis of administrative costs for 2016

In this report, Milliman consultants summarize calendar year 2016 administrative costs of organizations reporting Medicaid experience under the Title XIX Medicaid line of business on the National Association of Insurance Commissioners (NAIC) annual statement. The primary purpose of the report is to provide reference and benchmarking information for certain key administrative expense categories used in the day-to-day analysis of Medicaid managed care organization (MCO) financial performance. It also explores the differences among various types of MCOs using available segmentation attributes defined from the reported financial statements.

Medicaid risk-based managed care: Analysis of financial results for 2016

This report by Milliman’s Jeremy Palmer and Chris Pettit summarizes calendar year 2016 financial results of organizations reporting Medicaid experience under the Title XIX Medicaid line of business on the National Association of Insurance Commissioners (NAIC) annual statement. The primary purpose of this report is to provide reference and benchmarking information for certain key financial metrics used in the day-to-day analysis of Medicaid managed care organization (MCO) financial performance. This report explores the differences among various types of MCOs using available segmentation attributes defined from the reported financial statements.

Changes to actuarial soundness requirements may or may not accompany changes to Medicaid funding

Proposals to change federal funding for state Medicaid programs using block grants or per capita caps could affect federal actuarial soundness requirements for Medicaid managed care capitation rates. In this article, Milliman’s Michael Cook discusses the following three scenarios that could play out if changes to Medicaid funding happen.

• The continuation of federal actuarial soundness requirements under revised federal funding is a plausible scenario.
• The establishing of individual state requirements if federal requirements are eliminated.
• The continued development of actuarially sound capitation rates by individual states even in the absence of any soundness requirements.

Considerations for Medicaid reform proposals

Republican Medicaid reform proposals have thus far focused on converting federal funding from the current approach of proportional federal and state financing to either block grants or per capita caps. While these funding approaches may sound relatively straightforward, understanding the implications of such changes requires consideration of several factors.

In this paper, Milliman consultants break down the detailed considerations into two primary categories: initial benchmark development and annual growth rates. Defining the assumptions and methodologies used to establish benchmarks and growth rates is key to aligning service cost with funding under alternative federal financing for Medicaid. Without consideration of these concepts, the actual cost of Medicaid relative to the federal budget for Medicaid will begin to diverge, and the gap may become wider over time. As this theoretical funding gap emerges, states will be at increased risk for funding additional program cost.

A tale of two national health plans

The United Kingdom’s National Health Service (NHS) and the United States’ Medicaid program both provide publicly funded medical services to a broad population. The general goal of both is to find a balance of quality and efficiency that promotes access to appropriate and financially sustainable medical care. This article written by Milliman consultant Jennifer Gerstorff and Northampton General Hospital’s Chris Pallot explains the history of both programs. The authors also compare and contrast how the programs are funded, how providers are contracted, and how innovations are changing each system.