States are increasingly using capitated managed care to deliver Medicaid long-term services and supports (LTSS). In some cases, states are also integrating Medicare-paid acute health care with Medicaid-paid LTSS services for beneficiaries who are eligible for both. This primer summarizes the basic approach to rate-setting in Medicaid managed care and reviews the main options for structuring managed LTSS (MLTSS) rates. It presents examples from states with financial alignment demonstrations as well as long-standing MLTSS programs. It concludes by highlighting the policy and operational considerations that should influence a state’s choice of strategy.

For more information about managed LTSS rate-setting, please refer to the Medicaid Managed Long-Term Services and Supports Rate-Setting Initiative at http://www.chcs.org/project/medicaid-managed-long-term-services-supports-rate-setting-initiative/.