Medicaid Managed Care Capitation Rate Development and Certification

By Actuarial Standards Board · 2015 · ASOP No. 49

The Actuarial Standards Board's guidance to actuaries performing professional services related to Medicaid (Title XIX) and Children's Health Insurance Program (CHIP, Title XXI) managed care capitation rates, including a certification on behalf of a state to meet the requirements of 42 CFR 438.6(c). It (Doc. No. 179) was adopted in March 2015 and is effective for actuarial communications issued on or after August 1, 2015.

On the syllabus

Exam GH-201U — Outcomes 4b; pp. 1-12.

Transmittal Memorandum

1 Purpose, Scope, Cross References, and Effective Date

1.1 Purpose
1.2 Scope

- Applies to actuaries performing professional services related to Medicaid managed care capitation rates, including certification on behalf of a state to meet 42 CFR 438.6(c), capitation rate bid or rate acceptance, and department of insurance capitation rate filing.

- Also applies to managed care capitation rates for the Children's Health Insurance Program (CHIP); throughout the standard "Medicaid" also refers to CHIP.

1.3 Cross References
1.4 Effective Date

- Effective for actuarial communications issued on or after August 1, 2015.

2 Definitions

2.1 Actuarially Sound/Actuarial Soundness
2.2 Base Data
2.3 Capitation Rate
2.4 Disproportionate Share Hospital (DSH) Payments
2.5 Encounter Data
2.6 Enhanced or Additional Benefits
2.7 Federally Qualified Health Centers (FQHC)
2.8 Intergovernmental Transfer (IGT)
2.9 Managed Care Organization (MCO)
2.10 Medical Education Payments
2.11 Minimum Medical Loss Ratio
2.12 Performance Incentive
2.13 Performance Withhold
2.14 Rating Period
2.15 Risk Adjustment
2.16 Rural Health Clinic (RHC)
2.17 State Plan Services

3 Analysis of Issues and Recommended Practices

3.1 Overview
3.2 Medicaid Managed Care Capitation Rate Development Process and Considerations

- 3.2.1 Form of the Capitation Rates (Single Rate or Capitation Rate Ranges)

- 3.2.2 Structure of the Medicaid Managed Care Capitation Rates

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- 3.2.3 Rebasing and Updating of Rates
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- 3.2.4 Base Data
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- 3.2.5 Covered Services
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- 3.2.6 Special Payments
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- 3.2.7 Base Data Period Adjustments
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- 3.2.8 Other Base Data Adjustments
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- 3.2.9 Claim Cost Trends
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- 3.2.10 Managed Care Adjustments
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- 3.2.11 Non-Claim Based Medical Expenditures

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- 3.2.12 Non-Medical Expenses
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- 3.2.13 Risk Adjustment
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- 3.2.14 Reinsurance, Risk Corridors, and Other Risk Sharing Arrangements

- 3.2.15 Performance Withholds and Incentives

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- 3.2.16 Minimum Medical Loss Ratios
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- 3.2.17 State Initiatives
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- 3.2.18 Inaccurate or Incomplete Information Identified after Opinion or Rate Certification

3.3 Qualified Opinion on Actuarial Soundness
3.4 Documentation

4 Communications and Disclosures

4.1 Communications
4.2 Disclosures

Appendix 1 Background and Current Practices

Appendix 2 Comments on the Exposure Draft and Responses

Sources

Actuarial Standard of Practice No. 49, Medicaid Managed Care Capitation Rate Development and Certification, Doc. No. 179 (ASB, March 2015) — the document: title page, table of contents, sections 1–4 and the appendixes list; the contents page prints "Intergovernmental Transfer" and "Other Base Data Adjustments" with garbled spacing, read here as those headings
ASOP No. 49, Medicaid Managed Care Capitation Rate Development and Certification (Actuarial Standards Board) — the ASB's page for the standard, which links the same PDF
SOA GH 201U syllabus, Nov 2026/Mar 2027/Jul 2027 — the citation and the assigned scope (pp. 1-12)