Tag Archives: Chris Pettit

Medicaid managed care market penetration quadruples over past decade

Milliman has announced the availability of its annual research into the financial results and administrative expenses associated with Medicaid managed care plans. This year’s report marks the 10th edition of Milliman’s research, and combines the financial and administrative analysis into one comprehensive report, including an in-depth examination of Medicaid managed care plans’ medical loss ratios (MLRs), administrative loss ratios (ALRs), underwriting ratios (UW ratios), and risk-based capital (RBC) ratios. The information is of significant value to the Medicaid industry as enrollment and revenue continue to increase year-over-year.

Observing the changes that have occurred in the Medicaid managed care landscape over the last 10 years provides valuable insight into the makeup of the market. We have made enhancements to this year’s report that help to highlight the growth in this industry and the ebb and flow of experience over time.

Key findings from the analysis include:

• The average underwriting gain of 0.9% in calendar year (CY) 2017 remained relatively stable from the composite gains observed in CY 2016
• During the past 10 years of our analysis, the data studied for the report has seen a 250% growth in membership and over 400% growth in revenue for the studied Medicaid managed care programs
• Administrative expenses continue to increase on a per member per month (PMPM) basis, but decrease as a percentage of revenue has been observed from CY 2016 to CY 2017

To see the Medicaid administrative expenses report, click here.

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.

Milliman releases analysis of Medicaid managed care administrative costs

Pettit_T_ChristopherMilliman today announced the second iteration of its research into the administrative expenses associated with Medicaid managed care plans. This research complements the analysis of Medicaid managed care financial results report that was released on June 6, 2016. The information has considerable value, given the Centers for Medicare and Medicaid Services (CMS) Medicaid managed care rule (CMS-2390-F), published on April 25, 2016, and historical CMS Medicaid capitation rate-setting guidance. These regulations require greater documentation of administrative costs included in the capitation rates and this information can be useful in providing greater transparency of the rate-setting process.

The additional analysis on administrative expenses is critical in helping understand the true expenses incurred by Medicaid managed care organizations. The recent approval of the Medicaid managed care rule highlights the focus placed on each component of the managed care capitation rates. We believe that this research can become as familiar in the industry as our financial analysis report to help establish benchmarks for use in rate setting.

Key findings from the analysis include:
• The average administrative loss ratio (ALR) for Medicaid-focused plans is 8.8% after removing the impact of taxes and fees
• Calendar year (CY) 2014 and 2015 ALR values, net of taxes and fees, are considerably lower than in previous years
• The administrative per member per month (PMPM) value continues to climb as average premium levels increase

This is the second year the administrative expenses report has been produced, with expectation of providing future annual updates consistent with the Medicaid managed care organization financial results report.

To see the Medicaid administrative expenses report, click here.