Medicaid Health Plan Rate Setting Recommendations: An Enhanced Public/Private Partnership

摘要

The National Association of Urban-Based HMOs, Inc., (NAUMO) is a non-profit corporation, established in1993, comprised of health plans with a mission of service to vulnerable populations. Historically, many of these populations faced numerous inadequacies in the quality of care they received and sufficient access to providers, resulting in increased health risks and costs. Consequently, NAUHMO is committed to ensuring the highest level of care and service to these populations. The states development and implementation of inadequate Medicaid payment rates, however, are undermining this commitment. NAUHMO, on behalf of its members, is requesting that HCFA take a more proactive role in the oversight of the states rate development processes for programs that cover Medicaid managed care beneficiaries. This paper presents an overview of issues and recommendations related to the Medicaid rate setting process. Inadequate payment rates are currently causing a crisis in Medicaid managed care. At an increased disadvantage are those health plans that are primarily located in urban and rural areas. Established and fairly new health plans are experiencing substantial losses on Medicaid which they are unable to sustain. Consequently, plans are exiting the Medicaid managed care market, placing an increased financial strain on those health plans remaining in the market. The dilemma is aggravated by states using rate setting approaches that appear to be driven solely by budget targets rather than actuarially determined costs of providing the mandated levels of services and benefits. The impact of inadequate rates on health plans that serve Medicaid beneficiaries is enormous.