Supporting CMS Oversight of Medicaid Managed Care Payment Strategies

Total Medicaid spending on risk-based managed care accounts for more than half of total Medicaid expenditures, and capitated payments are expected to be the fastest growing category of Medicaid spending in the years ahead. Under the growing importance and complexity of Medicaid managed care, states are using traditional payment tools to help them achieve their Medicaid financing and performance goals —such as MLRs, risk corridors, risk pools, and reinsurance mechanisms— along with newer tools such as managed care plan performance incentives and SDPs.

Mathematica’s tasks on this project to support CMS in expanding oversight of these payment mechanisms include:

• Developing new tools for state reporting of financial results of risk mitigation strategies used to manage financial uncertainty and distribute risk between states and Medicaid managed care plans.
• Assessing and analyzing risk-mitigation strategies implemented by states to address the COVID-19 pandemic.
• Developing an MLR database usedto determine state compliance with regulations and to analyze trends in Medicaid MLRs.
• Conducting detailed analysis of SDP data, and working with CMS to enhance monitoring and oversight of this growing payment mechanism.