Rate Setting Methodology. Capitation Rates are determined using a prospective methodology whereby cost, utilization and other rate-setting data available for the time period prior to the time period covered by the rates are used to establish premiums. Capitation rates will not be retroactively adjusted to reflect actual fee-for-service data or plan experience for the time period covered by the rates.
Rate Setting Methodology a) Capitation rates shall be determined prospectively and shall not be retroactively adjusted to reflect actual Medicaid fee-for-service data or Contractor experience for the time period covered by the rates. Capitated rates in effect as of April 1, 2006 and thereafter, shall be certified to be actuarially sound in accordance with 42 CFR Section 438.6(c).
Rate Setting Methodology. 3 – Blending of FFS and Managed Care Data If updated FFS data is unavailable and actual managed care experience first becomes available (year 3 of the program), capitation rates for the MCO PIHP can be developed on an actuarially-sound basis using a blending of both data sources using the following two track approach: Project the Prior Year’s Rates Forward (Track 1), Summarize and Adjust the Managed Care Data (Track 2), Include the Effect of New Program/Policy Changes and Trend (Track 1 and Track 2), and Apply Credibility Factors to Each Track and Blend Together. Project the Prior Year’s Rates Forward (Track 1) — The first step of Track 1 is to begin with the previous year’s capitation rates that were originally developed using historical FFS claims and eligibility data. This data is projected forward to the time period for which the new capitation rates are to be paid. Trend factors are used to estimate the future costs of the services the covered population would generate under managed care. These trend factors normally vary by service and/or population group. Summarize and Adjust the Managed Care Data (Track 2) — The more recent managed care data is collected from the MCO PIHP, summarized, and analyzed to support rate setting. Adjustments (positive and negative) are applied to the managed care data as needed. These adjustments can account for items such as collection of TPL/COB, over- or under- reserving of unpaid claims, management efficiency, and provider contracting relations. Include the Effect of New Program/Policy Changes (Track 1) — In Track 1, any new program/policy changes implemented by DMA, that were not already accounted for in the previous year’s rates, are included in the new capitation rates by either increasing or decreasing the rates by a certain percentage amount. An additional administration/profit amount is added to arrive at the final capitation rates under Track 1. Include the Effect of Trend and New Program/Policy Changes (Track 2) — In Track 2, the managed care data is projected forward to the time period the capitation rates are to be paid. Trend factors may vary by service and/or population group, and are used to estimate the future costs of the services that the covered population would generate under managed care. Any new program/policy changes that were not already reflected in the managed care data are included in the rates by either increasing or decreasing the data by a certain percentage amount. An additional administrat...
Rate Setting Methodology a) Capitation Rates shall be determined prospectively and shall not be retroactively adjusted to reflect actual fee-for-service data or plan experience for the time period covered by the rates.
Rate Setting Methodology. DSHS sets actuarially-sound managed care rates that: • Have been developed in accord with generally accepted actuarial principles and practices; • Are appropriate for the populations to be covered, and the services to be furnished under the contract; and • Have been certified, as meeting the requirements of 42 CFR 438.6(c), by actuaries who meet the qualification standards established by the American Academy of Actuaries and follow the practice standards established by the Actuarial Standards Board. Following the end of the annual legislative session, DSHS shall offer an Amendment with the proposed funds for the next Fiscal Year. If for any reason the Contractor does not agree to continue to provide services using the proposed funds, the Contractor must provide the appropriate notice to DSHS under the requirements of the Termination Section of the Agreement.
Rate Setting Methodology. A. Premium Rates shall be determined prospectively and shall not be retroactively adjusted to reflect actual fee-for-service data or plan experience for the time period covered by the rates. Please refer to the methodology provided in Appendix A.2 of this contract.
Rate Setting Methodology. 2 – Use of Managed Care Data To develop capitation rates on an actuarially sound basis for the CHC program using actual CHC program-specific managed care data, the following general steps are performed: • Summarize, Analyze, and Adjust the Managed Care Data • Project the Managed Care Base Data Forward • Include the Effect of Program/Policy Changes • Add an Appropriate Administration/Underwriting Gain Load • Add an Amount for Taxes/Assessments • Optional Rate Update Summarize, Analyze, and Adjust the Managed Care Data — The Commonwealth collects data from each of the managed care organizations (MCOs) participating in the CHC program. This data is summarized, analyzed, and adjustments (positive and negative) are applied as needed to account for underlying differences between each MCO’s management of the program. These adjustments can account for items such as collection of TPL/COB, over- or under- reserving of unpaid claims, management efficiency, and Provider contracting relations. After adjusting each MCO’s data, each plan’s specific service claim costs are aggregated together to arrive at a set of base data for each population group. Project the Managed Care Base Data Forward — The aggregate base of managed care data is projected forward to the time period for which the capitation rates are to be paid. Trend factors are used to estimate the future costs of the services that the covered population would generate in the managed care program. These trend factors normally vary by service and/or population group. Include the Effect of Program/Policy Changes — The Commonwealth occasionally changes, or Federal statutes or regulations will impact, the services or populations covered under the CHC (e.g., expands dental care, restricts enrollment). Any new, material program/policy changes that were not already reflected in the managed care data are included in the capitation rates by either increasing or decreasing the managed care data by an appropriate adjustment. Add an Appropriate Administration/Underwriting Gain Load — After the base data has been trended to the appropriate time period, adjusted for program/policy changes, adjusted to reflect managed care principles, and blended into one data source, an administration/underwriting gain load will be added to the service claim cost component to determine the overall capitation rates applicable to each population group. The administration/underwriting gain load may be applied as a percentage of the total capitati...
