Capitation payment rates are established prospectively and remain in effect for the duration of the rating period. This can create challenges for states, managed care plans, and providers if there is an unexpected shock to the system (e.g., the COVID-19 pandemic) that changes utilization and costs drastically from the assumptions used to calculate the capitation rates. States can use risk mitigation strategies to limit the financial risk for both the state and participating plans.
In this session, staff presented findings from an expert roundtable. The roundtable discussion was focused on identifying the distinctive features of certain system shocks that go beyond normal risk, how the existing risk mitigation tools can be applied to deal with these shocks, and whether there was a need for additional tools or process improvements.