Common use of Trend Clause in Contracts

Trend. Trend is an estimate of the change in the cost of providing a specific set of benefits over time, resulting from both unit cost (price and service mix) and utilization changes. Trend factors are used to estimate the cost of providing services in some future year (contract year) based on the cost incurred in a prior period (base period). Mercer considered several information sources to develop appropriate trend factors to use in the Ohio rates. Several years of ABD Children data by COS and the resulting trends were analyzed. This FFS data was the primary trend source. Other sources, such as regional and national economic indicators and indices, provide broad perspectives of industry trends in the United States and in the Midwest region. Examples of specific resources reviewed include the Department of Labor Consumer Price Index (local, regional, and national) data, federal reports and projections (e.g., National Health Expenditures), and other healthcare industry reports (e.g., Health Care Cost Institute). ▇▇▇▇▇▇’▇ proprietary information about other state Medicaid programs provides additional information about Medicaid patterns of care and how those affect trends. ODM and Mercer reviewed the program changes that could have a material effect upon the cost, utilization, or demographic structure of the program prior to, or during, the contract period whose effect was not included within the base data. Several changes were evaluated for their impact on the CY 2014 rates.

Trend. Trend is an estimate of the change in the cost of providing a specific set of benefits over time, resulting from both unit cost (price and service mix) and utilization changes. Trend factors are used to estimate the cost of providing services in some future year (contract year) based on the cost incurred in a prior period (base period). Mercer ▇▇▇▇▇▇ considered several information sources to develop appropriate trend factors to use in the Ohio rates. Several years of ABD Children data by COS and the resulting trends were analyzed. This FFS data was the primary trend source. Other sources, such as regional and national economic indicators and indices, provide broad perspectives of industry trends in the United States and in the Midwest region. Examples of specific resources reviewed include the Department of Labor Consumer Price Index (local, regional, and national) data, federal reports and projections (e.g., National Health Expenditures), and other healthcare industry reports (e.g., Health Care Cost Institute). ▇▇▇▇▇▇’▇ proprietary information about other state Medicaid programs provides additional information about Medicaid patterns of care and how those affect trends. ODM and Mercer ▇▇▇▇▇▇ reviewed the program changes that could have a material effect upon the cost, utilization, or demographic structure of the program prior to, or during, the contract period whose effect was not included within the base data. Several changes were evaluated for their impact on the CY 2014 rates.