Tag Archives: Christopher Pettit

Webinar: Medicaid mega rule stresses actuarial soundness in the development of capitation rates

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.”

“Mega Reg” rule stresses actuarial soundness in the development of capitation rates

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.

Milliman releases annual analysis of Medicaid managed care financial results

Milliman today announced the availability of its annual research into the financial results associated with Medicaid managed care plans. These plans have become increasingly popular, which is due to the Medicaid expansion provisions in the Patient Protection and Affordable Care Act (ACA) and the continued growth of the managed care delivery system within Medicaid. This information is especially valuable now, with the recent release of the Medicaid and CHIP Managed Care Final Rule (CMS-2390-F) by the Centers for Medicare and Medicaid Services (CMS). The CMS regulations require reporting and monitoring of Medicaid managed care medical loss ratios, and may be useful as the industry contemplates the financial consequences of the new regulation.

We are excited about this year’s iteration of the report because of its relevance with the recently finalized Medicaid managed care rule published by CMS. This is an area of intense focus for the industry as we look to quantify the various impacts of the new regulation. This report has become an industry standard, and it allows us to offer analysis as Medicaid continues to evolve.

Key findings from the analysis include:
• Average profit increased from 2.1% in calendar year (CY) 2014 to 2.6% for CY 2015
• Revenue captured by the study increased by 30%
• The medical loss ratio (MLR), using the CMS definition, was 90.2% in CY 2015, more than 5% higher than the minimum 85%

The financial results report is now in its eighth year of publication and is widely cited by the industry. An accompanying report related to Medicaid administrative costs is anticipated to follow the release of this report.

To see the Medicaid financial results report, click here.

Medicaid expansion: A comparison of two states under Section 1115 demonstration waivers

Section 1115 of the Social Security Act gives the Secretary of the U.S. Department of Health and Human Services authority to approve experimental, pilot, or demonstration projects that promote the objectives of Medicaid and the Children’s Health Insurance Program (CHIP). Both Michigan and Indiana opted to use a Section 1115 demonstration waiver to implement their respective programs. While both programs were implemented to provide coverage to parents and childless adults with incomes up to 133% of the federal poverty level (FPL) under a Section 1115 waiver, the programs were implemented using different characteristics. Milliman consultants Christopher Pettit and Rob Damler provide perspective in this article.

Medicaid risk-based managed care: Analysis of financial results for 2013

Most states require that contracted managed care organizations (MCOs) file annual statements with state insurance regulators. The statements are typically based on a standard reporting structure developed and maintained by the National Association of Insurance Commissioners (NAIC), with prescribed definitions enabling comparisons across reporting entities.

This report by Christopher Pettit and Jeremy Palmer provides a summary of benchmarking financial metrics for the calendar year 2013 based on these statements, including medical loss, administrative loss, underwriting, and risk-based capital ratios. The target audience includes state Medicaid agencies and MCO personnel responsible for reviewing and monitoring the financial results of risk-based managed care programs.

Medicaid risk-based managed care: Analysis of financial results for 2012

Risk-based managed care is the current platform from which Medicaid recipients receive healthcare benefits, at least in part, in more than 30 states in the United States. Managed care organizations (MCOs) of all varieties contract with state Medicaid agencies to deliver and manage the healthcare benefits under the Medicaid program in exchange for predetermined capitation revenue.

This report authored by Jeremy Palmer and Christopher Pettit summarizes the calendar year (CY) 2012 experience for selected financial metrics of organizations reporting Medicaid (Title XIX) experience. The information was compiled from the reported annual statements. 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 MCO financial performance. The financial results are summarized on a composite basis for all reporting MCOs. Additionally, this report explores the differences among various types of MCOs using available segmentation attributes defined from the reported financial statements.