Capitated Payment Approaches for Medicaid-Financed Long-Term Care Services

Health Care Financing Review, Fall, 1999 by Noemi V. Rudolph, James Lubitz

(1) Capitation for elderly and physically disabled enrollees. Includes acute care services, LTC services, and behavioral health. Varies by contractor.

(2) Rates vary by age, sex, and county. Prepaid Medical Assistance Program rate component of institutional and NHC conversion rate cells includes Medicaid acute and ancillary services only; does not include nursing home room and board, and nursing services.

(3) CCN institutional rate includes room and board, ancillary costs, and transportation costs. CCN institutional and NHC conversion rates vary by facility. CCN community non-NHC rate represents average across elderly age groups.

(4) Per member per month for dually eligible beneficiaries. Includes LTC services only.

(5) Meets NHC criteria.

NOTES: PACE is Program of All-Inclusive Care for the Elderly. ALTCS is Arizona Long-Term Care System. MSHO is Minnesota Senior Health Options. NHC is nursing home certifiable. CCN is Continuing Care Networks. DMS is division of medical services. HCBS is home and community-based services. LTC is long-term care.

SOURCE: (Arizona Health Care Cost Containment System, 1999; Community Coalition for Long Term Care, New York Department of Health, and New York State Department of Social Services 1996; National PACE Association, 1999; Minnesota Department of Human Services, 1999; Texas Health and Human Services Commission, 1997.)

PACE

The PACE Medicaid capitation rate is based on Medicaid FFS expenditures for individuals who meet the program's eligibility criteria, 55 years of age and over (65 in some States), and who are NHC. Acute and LTC costs for these individuals are included in the rate. Medicaid rate methodologies used in the sites are summarized in Table 3. As the table shows, in some States, the PACE capitation was based on costs for the nursing facility populations. In others, it was an average that blended the per capita costs of the nursing facility population with other groups in different care settings, such as those receiving HCBS. Many States used discount factors to ensure savings to the State.

Table 3 Summary of PACE Rate-Setting Methodologies for Medicaid by State