2016 | Resource Center

Many states pursuing Medicaid managed long-term services and supports (MLTSS) or Medicare-Medicaid integrated care programs are using capitation rate-setting methods that address the diverse needs of the populations enrolled and establish incentives to promote higher quality services and more cost-effective care. This resource center, a product of CHCS’ Medicaid Managed Long-Term Services and Supports Rate-Setting Initiative supported through the West Health Policy Center, gives states and other stakeholders practical tools to assist them in developing or refining MLTSS rate-setting methods.

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foundation-iconFoundational Concepts

Developing and refining MLTSS payment rates requires an understanding of certain foundational concepts. The resources in this section provide general information about state approaches to developing MLTSS payment rates and some of the challenges involved in setting sound rates. Resources address strategies for using MLTSS rates to incentivize community living as well as considerations that would influence states’ use of these approaches.

Medicaid Rate-Setting for Managed Long-Term Services and Supports: Basic Practices for Integrated Medicare-Medicaid Programs (July 2016, Mathematica Policy Research) This report summarizes approaches that states can use to structure payment rates for MLTSS programs and highlights policy considerations that may influence a state’s choice of strategy.

Report to the Congress on Medicaid and CHIP: Chapter 5, Issues in Setting Medicaid Capitation Rate for Integrated Care Plans (March 2013, Medicaid and CHIP Payment and Access Commission) This report provides an overview of the Medicaid capitation rate-setting process for dually eligible individuals, describes states’ rate-setting methods in integrated care programs, highlights the rate-setting approaches in two states, and raises additional considerations in rate development.

Rate Setting for Capitated Medicaid Managed Long-Term Services and Supports (January 2013, Integrated Care Resource Center) This presentation describes the objectives of the rate-setting process in MLTSS programs, including the basic approach, rate structure, and risk mitigation strategies.


state-iconState Policy and Operational Considerations

Rate-setting for Medicaid MLTSS programs is a complex undertaking. The resources in this section can help states understand the policy and operational considerations that may influence the rate-setting process. Issues addressed include: steps for collecting, analyzing, and validating data; strategies for mitigating risk for states and managed care plans; and approaches for engaging managed care plans and other stakeholders in developing or refining rate-setting approaches.

Developing Capitation Rates for Medicaid Managed Long-Term Services and Supports Programs: State Considerations (January 2016, CHCS) This brief identifies themes from the experiences of states at the forefront of MLTSS that other states may want to consider as they seek to improve rate-setting and risk-adjustment methods, including efforts that promote services in home- and community-based settings.

Trust but Verify: Tennessee’s Approach to Ensuring Accurate Functional Status Data in its Medicaid Managed Long-Term Services and Supports Program (August 2016, CHCS) This brief describes how TennCare’s robust approach to collecting and validating data on enrollees’ functional status can help other states to advance strategies for MLTSS program rate setting.

Engaging Managed Care Plans in Rate Setting for Medicaid Managed Long-Term Services and Supports Programs (August 2016, CHCS) This brief describes state approaches for involving managed care plans in rate-setting activities, opportunities for plans to support these activities, and potential implications of MLTSS rate-setting policy decisions on participating managed care plans and other stakeholders.

Risk Mitigation Strategies in Medicaid Managed Long-Term Services and Supports Programs: Options for States (August 2016, CHCS) This brief explores the challenges in rate setting for MLTSS programs that may result in risk to overpayments and underpayments, and describes the most common financial risk mitigation strategies that states have employed to protect both the state from overpayment and managed care plans from excessive financial losses.

Rate-Setting Strategies to Advance Medicaid Managed Long-Term Services and Supports Goals: State Insights (August 2016, CHCS) This webinar highlights state considerations, and Tennessee and Wisconsin’s approaches for using rate-setting to advance MLTSS program goals, including: (1) helping more people to live in the community; and (2) adjusting risk appropriately based on MLTSS cost drivers, including functional status.

Considerations for a National Risk-Adjustment Model for Medicaid Managed Long-Term Services and Supports Programs (September 2016, CHCS) This brief examines considerations in developing a nationally available risk-adjustment model for MLTSS programs that can be used by states. It also explores research needed to develop a robust model that predicts expected LTSS costs as accurately as possible.


risk-iconRisk Adjustment for Functional Status

Advanced approaches to setting MLTSS rates — such as when and how to risk adjust rates based on functional status and how to account for an extremely diverse LTSS population — can be challenging to design and implement. The resources in this section present considerations for states seeking to incorporate risk-adjustment methods based on functional status into their MLTSS rate-setting process.

Look Before You Leap: Risk Adjustment for Managed Care Plans Covering Long-Term Services and Supports (August 2016, CHCS) This brief reviews risk-adjustment strategies in MLTSS programs that account for enrollees’ functional and cognitive status to improve the accuracy of capitation rates, as well as technical challenges and state program features that may affect the need to use risk adjustment.

Building Managed Long-Term Services and Supports Risk-Adjustment Models: State Experiences Using Functional Data (August 2016, CHCS) This brief describes New York’s and Wisconsin’s sophisticated MLTSS risk-adjustment models that use functional status data to predict LTSS costs.

Population Diversity in Medicaid Managed Long-Term Services and Supports Programs: Implications for Risk Adjustment and Rate Setting (August 2016, CHCS) This brief discusses how states can use information on demographic and functional limitations to predict the cost of care for people with disabilities through risk adjustment and identifies variables that can affect the predictability of LTSS needs and costs that may not be captured in functional assessment data.

Report to the Congress on Medicaid and CHIP: Chapter 4, Functional Assessments for Long-Term Services and Supports (June 2016, Medicaid and CHIP Payment and Access Commission) This report examines the tools used by state Medicaid programs to assess applicants’ health conditions and functional needs when determining LTSS eligibility and creating care plans, and discusses opportunities and challenges for moving toward a single national assessment tool.

Uniform Assessment Practices in Medicaid Managed Long-Term Services and Supports Programs (August 2013, CHCS) This brief explores uniform assessment processes in five states with MLTSS programs to identify what tools are available, how they are administered, and considerations for development and implementation.


federal-iconFederal and Professional Guidance

This section includes guidance from the Centers for Medicare & Medicaid Services (CMS) and Actuaries Standards Board to help states in developing actuarially sound rates for MLTSS programs.

2016 Medicaid Managed Care Rate Development Guide (September 2015, Centers for Medicare & Medicaid Services) This guide describes the information that states and their actuaries should provide when developing actuarial rate certifications so that CMS can determine whether the data, assumptions, and methodologies are consistent with generally accepted actuarial practices, and whether the capitation rates are appropriate for the populations and services to be covered.

Guidance to States Using 1115 Demonstrations or 1915(b) Waivers for Managed Long Term Services and Supports Programs (May 2013, Centers for Medicare & Medicaid Services) This report shares best practices for implementing MLTSS programs and clarifies CMS’ expectations of states using Section 1115 demonstrations or 1915(b) waivers combined with another authority in an MLTSS program. An accompanying summary describes 10 elements that CMS expects states to incorporate into MLTSS programs.

Medicaid Managed Care Capitation Rate Development and Certification (March 2015, Actuarial Standards Board) This document provides guidance for actuaries preparing, reviewing, or giving advice on capitation rates for Medicaid programs.