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.
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.
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.
Quality encounter data is necessary for successful Medicaid managed care programs. States and managed care organizations have partnered to work toward solutions for developing and transmitting complete and accurate encounter data. In this article, Milliman’s Jennifer Gerstorff and WellCare Health Plans’ Sabrina Gibson discuss the need for, and challenges of, collecting Medicaid encounter data as well as the future of Medicaid encounter data.
Copyright © 2016. The Society of Actuaries, Schaumburg, Illinois.
Reproduced by permission.
Join Milliman’s Brad Armstrong, Christopher Pettit, and Marlene Howard as they discuss implications of the final rule on the development of actuarially sound capitation rates and required supporting documentation. With its publication of the final Medicaid managed care rule (final rule), the Centers for Medicare and Medicaid Services underscored the importance of actuarial soundness in the capitation rate development process.
This webinar will take place on Tuesday, November 1, at 12 p.m. EST/9 a.m. PST. Webinar topics include:
• Action items for states and their actuaries
• Areas where the new rule may present challenges in the certification of rates
To register, click here.
For more perspective on this topic, read the article “Overview of guidance related to actuarial soundness in final Medicaid managed care regulations.”
With its publication of the final Medicaid managed care rule (final rule), the Centers for Medicare and Medicaid Services underscored the importance of actuarial soundness in the capitation rate development process. In this paper, Milliman’s Brad Armstrong, Christopher Pettit, and Marlene Howard summarize the implications that the final rule has on the development of actuarially sound capitation rates and required supporting documentation. The authors also discuss action items for states and their actuaries along with some areas where the new rule may present challenges in the certification of the rates.