Examining Rate Setting for Medicaid Managed Long-Term Care

The Hilltop Institute, UMBC
July 22, 2009
Tucker, A. and K. Johnson

This report is the second in a series that explores the cross-payer effects of providing Medicaid long-term supports and services on Medicare acute care resource use. Patterns of Medicaid eligibility, as well as resource use under both Medicare and Medicaid are examined primarily within the context of service use-based groups that might be used to set rates for Medicaid capitation payments for managed long-term care. The report examines, in further detail, the overall patterns of resource use, and presents and simulates a rate setting system to cover the Medicaid portion of costs associated with coordinated care in an integrated Medicare and Medicaid environment. The relationship between CMS Hierarchical Condition Categories-based risk adjustment that is used to establish payments for Medicare Advantage plans and Medicaid resource use is also explored.

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