Examination of Medicare A/B Capitation Rates for 2014

This NYHealth-supported report, written by Milliman, Inc., in association with New York Health Plan Association, addresses how well the draft rates offered reflect the anticipated fee-for-service experience of the dual eligible population.

Individuals who qualify for both Medicare and Medicaid, known as dual eligibles, are among New York State’s costliest and most complex Medicaid beneficiaries. On average, each dual eligible costs the State $30,384 per year—the highest rate in the nation and twice as much as the national average of $15,459.

New York State is moving rapidly to take advantage of a new federal demonstration opportunity, the Fully Integrated Duals Advantage Program (FIDA). New York will establish a new managed care program that fully integrates all Medicare and Medicaid physical health care, behavioral health care, and long-term supports and services. When fully implemented, the FIDA demonstration program could affect approximately 150,000 New Yorkers.

This report focuses on the Medicare Parts A/B capitation rate. Milliman examined historical program costs provided by the New York State Department of Health to test the adequacy of the proposed rate-setting methodology, and address how well the draft rates offered reflect the anticipated fee-for-service experience of the dual eligible population.

This is the second of two reports written by Milliman, Inc., in association with New York Health Plan Association, that are intended to inform health plans and key stakeholders about the rate-setting development of the dual-eligible integration demonstration program in New York State. Read the first report, “New York Fully Integrated Duals Advantage Program: Perspectives of a Certifying Actuary.”