The Centers for Medicare and Medicaid Services (CMS) released proposed updates to Medicaid managed care regulations with the goal of easing some of the regulatory burdens while increasing the requirement for transparency. These updates offer more flexibility in developing and placing more regulation on certifying actuarially sound capitation rates.
The most significant changes related to actuarial soundness under the proposed authority are the reintroduction of certifying rate ranges and the considerations that must be given to assumptions applicable to rates under different federal financial participation levels.
The reversal of the elimination of rate ranges from the 2016 final rule places more stringent requirements on documenting support for the developed rate ranges. CMS also commented that the reintroduction of rate ranges may be especially valuable to states that procure contracts through competitive bidding, which was a primary reason for installing them.
To read more about the proposed updates to actuarial soundness, read this article by Brad Armstrong, Marlene Howard, and Christopher Pettit.
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.
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.