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Risk adjustment formulas being tested, but payment woes still plague Medicaid plans, providers
Public Sector Contracting Report : the Monthly Guide to Medicare and Medicaid Managed Care
|October 4, 1997
Abstract:
Medicaid risk adjustment on the horizon? Some states are dabbling with new payment methodologies, but most plans and providers are still grappling with Medicaid rates based on traditional age, sex, and geographic bands. Here's an update, plus some sample state PMPM rates.
Insights
Medicaid risk adjustment is emerging, with some states exploring new payment models. Most health plans and providers still use traditional Medicaid rates, but updates and sample state rates are now available.
Area of Science:
- Health economics
- Public health policy
- Healthcare payment models
Background:
- Traditional Medicaid payment relies on broad age, sex, and geographic categories.
- The Centers for Medicare & Medicaid Services (CMS) is exploring new reimbursement strategies.
- Healthcare providers and managed care organizations face challenges adapting to evolving payment structures.
Purpose of the Study:
- To provide an update on the current landscape of Medicaid payment methodologies.
- To explore the emergence of risk adjustment in Medicaid programs.
- To offer insights into state-specific Per Member Per Month (PMPM) rates.
Main Methods:
- Review of current state Medicaid payment policies.
- Analysis of emerging risk adjustment models being piloted.
- Compilation of sample state-specific PMPM rates.
Main Results:
- Several states are experimenting with innovative payment approaches beyond traditional methods.
- Widespread adoption of risk adjustment in Medicaid has not yet occurred.
- Sample PMPM rates illustrate variations in reimbursement across different states.
Conclusions:
- The transition to new Medicaid payment models, including risk adjustment, is gradual.
- Understanding evolving Medicaid reimbursement is crucial for health plans and providers.
- Further monitoring of state-level innovations in Medicaid payment is warranted.