The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.
Introduction
Managed care continues to grow as a part of state Medicaid programs. Enrollment in full-risk HMOs increased by 40.6% between 1997 and 20011. Despite the overall increase in enrollment, in many states there were fewer plans available and willing to serve an increasing number of enrollees (Holahan et al. 2002). A small number of states have been unable to attract a sufficient number of plans and no longer have full-risk managed care in their Medicaid programs. Managed care payment rates are a major issue for all states in their efforts to sustain Medicaid managed care. While other factors are important, rates clearly affect plans' willingness to participate in the program and the kinds of services they are able to offer and the providers they are able to attract (Coughlin et al. 2001).
We conducted a survey of Medicaid managed care payment methods and capitation rates in 1998 (Holahan et al. 1999). Information was collected on how states set rates and how they made adjustments for differences in age and gender, treatment of maternity expenses, and benefits. We made adjustments for these and other factors to allow for comparisons of rates across states. Finally, we computed adjusted rates for each state which allowed state policymakers and other interested parties to understand how Medicaid programs were paying managed care plans across the states. The results showed a twofold variation in rates with the highest rates in Connecticut and Massachusetts and the lowest in California.
This paper updates the earlier one by providing data on methods and rates employed by states in January 2001. As in the previous report 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 next describe procedures we use in making adjustments for all of these factors-as the same set of adjustments used in 1998. We conclude by providing data on the levels of rates being used in the responding states.
Note: This report is available in its entirety in the Portable Document Format (PDF).
1. "Medicaid Managed Care Enrollment Report, Summary Statistics as of June 30, 1997." and "Medicaid Managed Care Enrollment Report, Summary Statistics as of June 30, 2001." Centers for Medicare & Medicaid Services.
http://www.cms.gov/medicaid/mcaidsad.asp. (Accessed 9 September 2002).
The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.
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