Assumptions and methodology. In developing the administrative costs, we reviewed historical administrative expenses for the MMC program along with national Medicaid health plan administrative expenses. We considered the size of participating health plans and the resulting economies of scale that could be achieved, along with the benefits covered and the demographics of the MMC population. Historical reported administrative expenses were reconciled between the available data sources for the purpose of evaluating the quality of the data provided. CY 2018 and 1H 2019 cost report administrative expenses were analyzed by MCP for reasonableness and completeness of the data provided. This data formed the baseline for projected 2020 administrative expense amounts. There is a significant amount of variation in the reporting of administrative expenses between the five MCPs, both in the magnitude of administrative expenses and in the rate cell allocation methodology utilized. We summarized historical reported values for each MCP and reallocated these values using a percent of revenue before taxes allocation methodology. Separate administrative expense amounts were developed for CFC Children, ABD <21, ABD 21+, Delivery, AFK, and the adult CFC/EXT populations. Effective January 1, 2019, ODM required that MCP contracting arrangements with pharmacy benefit managers (PBM) be structured as a pass-through pricing model, consistent with the definition included in Appendix C of the Provider Agreement. Prior to January 1, 2019, MCP PBM contracts were structured as a spread-pricing arrangement. Effective July 1, 2019, MCPs must assess all newly enrolled members using the ODM standard Health Risk Assessment (HRA) tool within 90 calendar days of enrollment (i.e. 90 days includes the date of enrollment + 89 days). All other members must be assessed using the standardized HRA tool by July 1, 2020. In addition, non-benefit expense amounts were developed with consideration for sub capitated administrative expense amounts included in MCP cost report submissions.
Assumptions and methodology. In developing the administrative costs, we reviewed the CY 2019 through first half 2021 cost reports and found a material amount of variation in the reporting of administrative expenses between the five MCOPs, both in the magnitude of administrative expenses and in the rate cell allocation methodology utilized. Cost report administrative expenses for both the Opt-Out and Opt-In MyCare programs were analyzed by MCOP for reasonableness and completeness of the data provided. For MCOPs with unreasonable administrative expense rate cell allocation, but reasonable total administrative costs, we reallocated their total administrative costs using the rate cell administrative expense distribution of the other MCOPs. This data formed the baseline for projected 2022 administrative expense amounts. Separate administrative expenses amounts were developed for each rating group. In addition, non-benefit expense amounts were developed with consideration for sub capitated administrative expense amounts included in MCOP cost report submissions.
Assumptions and methodology. In developing the administrative costs, we reviewed historical administrative expenses for the MMC program along with national Medicaid health plan administrative expenses. We considered the size of participating health plans and the resulting economies of scale that could be achieved, along with the benefits covered and the demographics of the MMC population. Historical reported administrative expenses were reconciled between the available data sources for the purpose of evaluating the quality of the data provided. CY 2017 cost report administrative expenses were analyzed by MCP for reasonableness and completeness of the data provided. This data formed the baseline for projected 2019 administrative expense amounts. There is a significant amount of variation in the reporting of administrative expenses between the five MCPs, both in the magnitude of administrative expenses and in the rate cell allocation methodology utilized. We summarized historical reported values for each MCP and reallocated these values using a percent of revenue before taxes allocation methodology. Separate administrative expense amounts were developed for CFC Children, ABD <21, ABD 21+, Delivery, AFK, and the adult CFC/EXT populations. Effective January 1, 2019, ODM will require that MCP contracting arrangements with pharmacy benefit managers (PBM) be structured as a pass-through pricing model, consistent with the definition included in Appendix C of the Provider Agreement. Prior to January 1, 2019, MCP PBM contracts were structured as a spread-pricing arrangement. As a result of this program adjustment, an amount equal to $3 per script was added to non-benefit expense amounts to account for PBM admin previously included in spread-pricing. In addition, non-benefit expense amounts were developed with consideration for sub capitated administrative expense amounts included in MCP cost report submissions.
Assumptions and methodology. In developing the administrative costs, we reviewed historical administrative expenses for the MMC program along with national Medicaid health plan administrative expenses. We considered the size of participating health plans and the resulting economies of scale that could be achieved, along with the benefits covered and the demographics of the MMC population. Historical reported administrative expenses were reconciled between the available data sources for the purpose of evaluating the quality of the data provided. CY 2019 cost report administrative expenses were analyzed by MCP for reasonableness and completeness of the data provided. This data formed the baseline for projected 2021 administrative expense amounts. There is a significant amount of variation in the reporting of administrative expenses between the five MCPs, both in the magnitude of administrative expenses and in the rate cell allocation methodology utilized. We summarized historical reported values for each MCP and reallocated these values using a percent of revenue before taxes allocation methodology. Separate administrative expense amounts were developed for CFC Children, ABD <21, ABD 21+, Delivery, AFK, and the adult CFC/EXT populations. Effective July 1, 2019, MCPs must assess all newly enrolled members using the ODM standard Health Risk Assessment (HRA) tool within 90 calendar days of enrollment (i.e. 90 days includes the date of enrollment + 89 days). All other members must be assessed using the standardized HRA tool by July 1, 2020. In addition, non-benefit expense amounts were developed with consideration for sub capitated administrative expense amounts included in MCP cost report submissions.
Assumptions and methodology. The Administrator shall establish the assumptions and methodology of calculation used in determining the present or future value of benefits, earnings, payments, fees, expenses or any other amounts required to be calculated under the terms of the Plan. Such assumptions and methodology shall be made available to Participants upon request and may be changed from time to time by the Administrator.
Assumptions and methodology. We summarized the historical cost report data against the assumptions employed in the current capitation rates. There appeared to be general consistency when looking at the care management and overall administrative costs reported by the MCOPs. As such, we established overall administrative costs that were similar on a composite PMPM equivalent basis to the current year assumptions.
Assumptions and methodology. In developing the administrative costs, we reviewed historical administrative expenses for the MMC program along with national Medicaid health plan administrative expenses. We considered the size of participating health plans and the resulting economies of scale that could be achieved, along with the benefits covered and the demographics of the MMC population. Historical reported administrative expenses were reconciled between the available data sources for the purpose of evaluating the quality of the data provided. Calendar year 2014 cost report administrative expenses were analyzed by MCP for reasonableness and completeness of the data provided. This data formed the baseline for projected 2016 administrative expense amounts. In developed administrative expenses, we assumed an annual administrative expense trend of 1%. Calendar year 2014 administrative expenses were adjusted for the assumed economies of scale that could be achieved due to membership increases from 2014 to the projected 2016 membership levels. Separate administrative expense amounts were developed for CFC Children, ABD < 21, ABD 21 +, Delivery, and the adult CFC/EXT populations.
Assumptions and methodology. In developing the administrative costs, we reviewed the CY 2015 and YTD June 2016 cost reports and found large variations among the MCOPs. We addressed administrative cost projections similar to our approach for the CY 2016 capitation rate development by adjusting the administrative expense percentages to achieve an administrative PMPM increase of approximately 2.0% for the combined MyCare Opt-In and Opt-Out rates. Care management costs, however, were fully rebased from survey data provided by the AAAs and the MCOPs as well as composite expense levels indicated in the cost reports.
Assumptions and methodology. The assumptions and methodology used to calculate the payment amounts referred to in this Section 2 shall be as set out on Schedule 2(e) attached hereto and made a part hereof.
