Common use of Completion adjustment Clause in Contracts

Completion adjustment. The capitation rates are based on SFY 2022 Opt-In program experience. Encounter data is paid through December 31, 2022. In recognition of the 6 months of available runout to the SFY 2022 incurred period, we asked the MCOPs to provide updated IBNP estimates for this period paid through June 30, 2023 as part of the 2024 MCOP Survey process. In addition, completion factors were developed by summarizing encounter data and applying traditional actuarial techniques to develop estimates of incurred but not paid (IBNP) liability, using ▇▇▇▇▇▇▇▇’▇ Robust Time- Series Reserve Analysis System (RTS)1. First, we stratified the data by category of service. Claims for each of these population-service category stratifications were analyzed and formed into lag triangles by paid and incurred month. Claim completion factors were developed for each month of the base experience period, based on historical completion patterns. Completion factors developed through the use of encounter data were compared to MCOP reported IBNP liability estimates in the MCOP surveys. The updated IBNP liabilities provided by the MCOPs as part of the 2024 MCOP Survey submissions provided an additional six months of claims runout that is typically not available for rate development. Based on our review of historical claim payment patterns and consideration of additional claims runout provided by the MCOPs, we applied completion adjustments based on the IBNP liabilities provided by the MCOPs. The monthly completion factors were applied to SFY 2022 experience to estimate the remaining claims liability for the calendar year. In addition to the completion adjustment, we considered the decreased utilization of MyCare services observed during the COVID-19 pandemic on the SFY 2022 base data period and the impact of experience through the remainder of CY 2022 on prospective trend assumptions for CY 2024. To account for material changes in utilization patterns throughout the base period and the remainder of CY 2022 as a result of the COVID-19 pandemic, an adjustment was applied to the SFY 2022 base data for the Nursing Facility service category for the Community Well rate cells and the Adult Day Care service category for the Community Waiver 65+ and Community Waiver 45- 64 rate cells.