Capitation rates influence many factors important to successful managed care programs, including the willingness of managed care organizations (MCOs) to contract with states, MCO solvency, plans’ ability to pay providers sufficiently, and enrollee access to care and quality. To learn more about the extent to which federal standards support meaningful development and review of capitation rates, MACPAC conducted an extensive examination of the Medicaid actuarial soundness standard.
In this session, staff presented findings from this study. We found that federal guidance provides states with substantial flexibility to control cost growth, increase efficiency, and manage plan profits. Federal oversight focuses on whether rates provide for all reasonable, appropriate, and attainable costs but does not explicitly examine whether rates represent the most efficient use of Medicaid funds or provide for adequate quality of care or access to care. These findings suggest potential areas for future Commission recommendations.
