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Medicaid Managed Care Payment Methods and Capitation Rates in 2001 (Research Report)
John Holahan, Shinobu Suzuki
This paper reports on a survey of Medicaid managed care payment methods and capitation rates employed by states in January 2001. We begin by discussing changes in Medicaid managed care enrollment by state. We then describe how states set rates, what adjustments are made for age, gender and maternity, risk factors such as HIV/AIDS, whether they make regional adjustments and which services are carved out from the benefit package. We then describe procedures we use in making adjustments for all of these factors. We conclude by providing data on the level of rates being used in the responding states. The results show a twofold variation in Medicaid capitation rates. The data also shows that the growth in Medicaid capitation between 1998 and 2001 average 18%, considerably more than the increase in Medicare+Choice rates. The increase was, however, less than the increase in commercial premiums.