Utilization Risk Corridor Clause Samples
A Utilization Risk Corridor clause establishes a financial mechanism to manage the risk associated with actual service usage deviating from projected levels. Typically, this clause sets upper and lower thresholds for utilization, and if actual usage falls outside these boundaries, financial adjustments—such as additional payments or refunds—are triggered between the contracting parties. This approach helps both parties share the risk of unpredictable utilization, ensuring that neither side bears an undue financial burden if usage is significantly higher or lower than expected.
Utilization Risk Corridor. The Utilization Risk Corridor is defined as the number of Inpatient Days that wrap around the days that State has committed to purchase on a prospective basis in the APM Year. This corridor will be determined using a percentage threshold above and below the value of prospective purchase days. In APM Year 1, the utilization corridor is 98% to 102% of the total prospective days purchased of 15,576.
i. The Utilization Risk Corridor, therefore, shall be applied as follows for APM Year 1 and calculations shall be factored into the Year-End Reconciliation.
1. If the actual number of Inpatient Days utilized by Vermont Medicaid members is between 15,576 and 15,888, then Contractor shall be liable for the costs to serve patients for these days. If the actual number of Inpatient Days utilized by Vermont Medicaid members is greater than 15,888 during APM Year 1, then the State will reimburse Contractor an additional amount outside of the APM Payment for each day above 15,888 at a rate of $1,838.33 per day.
2. Conversely, if the actual number of Inpatient Days utilized by Vermont Medicaid members is between 15,264 and 15,576, Contractor will be entitled to retain 100% of the APM prospective payments. If the actual number of Inpatient Days utilized by Vermont Medicaid members is less than 15,264 during APM Year 1, then Contractor shall reimburse back to the State an amount equivalent to $1,838.33 per day for each day below 15,264.
ii. If during the contract, the State or Contractor determines that utilization is 10% or more under the expected utilization as specified in Table 1 of Attachment B, then the parties shall meet and confer utilization or costs. Evaluations will occur no less frequently than monthly unless the Parties agree to evaluate utilization less frequently.
iii. Parties agree to monitor changes in demand/delivery during the APM Year 1 with specific regard to impacts that may be resulting from the current COVID-19 public health emergency. If during the duration of the COVID-19 public health emergency related shifts are noted that were not captured in part or in full during the process to set the APM Payment, Parties shall meet to discuss these shifts and potential adjustments to the Utilization Risk Corridor.
iv. Notwithstanding the provisions above, at the State’s sole discretion, Contractor may qualify for an adjustment to the lower boundary of the utilization risk corridor. This adjustment is tied to ensuring that Level 1 admissions continue to be pri...
Utilization Risk Corridor. The Utilization Risk Corridor is defined as the number of Inpatient Days that wrap around the days that State has committed to purchase on a prospective basis in the APM Year. This corridor will be determined using a percentage threshold above and below the value of prospective purchase days. In APM Year 3, the utilization corridor is 98% to 102% of the total prospective days purchased of 18,615.
i. The Utilization Risk Corridor, therefore, shall be applied as follows for APM Year 3 and calculations shall be factored into the Year-End Reconciliation.
1. If the actual number of utilized Inpatient Days is between 18,243 and 18,987 then Contractor shall be liable for the costs to serve patients for these days.
2. If the actual number of utilized Inpatient Days is greater than 18,987 during APM Year 3 then the State will reimburse Contractor an additional amount outside of the APM Payment for each day above 18,987 at a rate of $3,100 per day.
3. If the actual number of utilized Inpatient Days is less than 18,243 during APM Year 3, then Contractor shall reimburse back to the State an amount equivalent to $3,100 per day for each day below 18,243.
ii. If during the contract, the State or Contractor determines that the Inpatient Days used are 10% or more under the expected utilization as specified in Table 3 of Attachment B, then the Parties may meet to discuss utilization or costs. Evaluations will occur no less frequently than monthly unless the parties agree to evaluate utilization less frequently.
Utilization Risk Corridor. The Utilization Risk Corridor is defined as the number of Inpatient Days that wrap around the days that State has committed to purchase on a prospective basis in the APM Year. This corridor will be determined using a percentage threshold above and below the value of prospective purchase days. In APM Year 2, the utilization corridor is 98% to 102% of the total prospective days purchased for the period of January 1, 2022 through June 30, 2022 of 7,422. For the period of July 1, 2022 through December 31, 2022, the utilization corridor is 98% to 102% of the total prospective days purchased of 9,384.
i. The Utilization Risk Corridor, therefore, shall be applied as follows for APM Year 2 and calculations shall be factored into the Year-End Reconciliation.
1. For the period of January 1, 2022 through June 30, 2022, if the actual number of Inpatient Days utilized by Vermont Medicaid members is between 7,570 and 7,274 then Contractor shall be liable for the costs to serve patients for these days. For the period of July 1, 2022 through December 31, 2022, if the actual number of Inpatient Days utilized by Vermont Medicaid members is between 9,572 and 9,196 then the Contractor shall be liable for the costs to serve patients for these days.
2. For the period of January 1, 2022 through June 30, 2022, if the actual number of Inpatient Days utilized by Vermont Medicaid members is greater than 7,570 then the State will reimburse Contractor at a rate of $2,550 for each day above 7,570. For the period of July 1, 2022 through December 31, 2022, if the actual number of Inpatient Days utilized by Vermont Medicaid members is greater than 9,572, then the State will reimburse Contractor at a rate of $3,100 for each day above 9,572.
3. For the period of January 1, 2022 through June 30, 2022, if the actual number of Inpatient Days utilized by Vermont Medicaid members is below 7,274, then Contractor shall reimburse back to the State an amount equivalent to $2,550 per day for each day below 7,274. For the period of July 1, 2022 through December 31, 2022, if the actual number of Inpatient Days utilized by Vermont Medicaid members is below 9,196, then Contractor shall reimburse back to the State an amount equal to $3,100 per day for each day below 9,196.
ii. If during the contract, the State or Contractor determines that the Inpatient Days utilization are 10% or more under the expected utilization as specified in Table 2 of Attachment B, then the Parties shall meet to discuss utilizatio...