Developing Capitation Rates for Medicaid Managed Long-Term Services and Supports Programs: State Considerations

Many states are creating or expanding Medicaid managed long-term services and supports (MLTSS) programs or Medicare-Medicaid integrated care programs in an effort to control costs and improve care quality for people who use long-term care. To accomplish these goals, MLTSS and other integrated care programs need to set capitation rates that address the diverse needs of the population served and establish incentives to promote higher quality services and more cost-effective care.

This brief, developed by the Center for Health Care Strategies (CHCS) and its partners at Mathematica Policy Research and Airam Actuarial Consulting, examines considerations for MLTSS rate-setting and spotlights the experiences of eight states — Arizona, Kansas, Massachusetts, Minnesota, Tennessee, Texas, Virginia, and Wisconsin — in establishing MLTSS payment rates. The brief is a product of the Medicaid Managed Long-Term Services and Supports (MLTSS) Rate-Setting Initiative, supported by the West Health Policy Center.