Crosswalk: 2021-2022 Managed Care Rate Guidance

Section I - Clarifies rate certification and
supporting documentation to be submitted with
attestation, including the actuarial report, other
reports, letters, memorandums, and
communications, and other workbooks or data.

Section I - updated to reference the new
regulatory citations

Section I: Medicaid Managed Care Rates (changes
made to intro to Section I and formatting changes
throughout all sub-sections of Section I) - Update to
reference new regulatory requirements that take
effect with rating periods effective on or after July 1,
2017. Restructure to have two components of each
sub-section that clarify the rate development
standards and requirements for appropriate
documentation.

Update to reference new regulatory requirements Update to reference new regulatory requirements
that take effect with rating periods effective on or that take effect with rating periods effective on or
after July 1, 2018.
after July 1, 2019.

Section I.1: General Information - Add clarifications
to be consistent with the final rule including: what
standards the letter from the certifying actuary must
include (given requirements that take effective with
rating periods effective on or after July 1, 2017),
indication that the contract must specify the final
capitation rates, reminder, effective 7/1/2018,
actuaries must certify specific rates for each rate cell
and will no longer be permitted to certify rate ranges,
clarification that certification provides a summary of
special contract provisions related to payment,
expectations for retroactive adjustments to capitation
rates, no assumptions based on FMAP, and
procedures for when rate certifications are
necessary. Move detail from Sections I.6, I.8 and I.9
of the January-June 2017 guide into this section to
streamline the document into clear categories for
states (i.e. Rate Range Development, Other Rate
Development Considerations, Procedures For Rate
Certifications for Rate and Contract Amendments).
Clarify that the rate certification assures that rates at
any point within the rate range would be actuarially
sound. Clarify that effective dates of programmatic
changes should be consistent with the rate
development assumptions. Clarify that the
certification must document any assumptions for
which values are varied in order to develop rate
ranges. Clarify that rates must be certified for all time
periods in which they are effective, a rate certification
must be provided for rates for all time periods, and
rates from a previous rating period cannot be used
for a future time period without a certification of the
rates for this new rating period.

Add new regulatory requirements that take effect
with rating periods effective on or after July 1,
2018, including (1) the requirement that
actuaries must certified rates and can no longer
certify rate ranges; and (2) the ability to increase
or decrease the capitation rate per rate cell up to
1.5 percent without submitting a revised rate
certification. Also clarify that states provide a
comparison of the final certified rates to those in
the previous rating period and a description of
any other material changes to the rates that are
not otherwise addressed in other sections of the
guide.

Section I.1: General Information - Provided more Section I.1: General Information - Clarify that the
rating period must be 12 months to be
detailed description around documentation
expectations of states to provide throughout the consistent with the final rule
certification process.

Add new regulatory requirement, that takes
effect with rating periods effective on or after July
1, 2019, that capitation rates must be developed
in such a way that the MCO, PIHP or PAHP
would reasonably achieve a medical loss ratio of
at least 85 percent, and outline documentation
expectations if the state chooses as its option to
include a remittance. Additionally, include two
minor revisions to (1) acknowledge that a
certification may cover one or more programs;
and (2) that the appropriate documentation
requirements applies to the rate certification
(when previously it referenced plural
certifications). Removal of the requirement to
provide a comparison of the final rate ranges in
the previous rate certification as rate ranges were
no longer allowed for the previous rating period
beginning between July 1, 2017 through June
30, 2018. A request that if there are large, or
negative changes in rates from the previous
year, that the actuary describe in the rate
certification what is leading to these differences
(this last item is included in the documentation
expectations as CMS has routinely asked about
this detail during the review period and inclusion
of this detail in the initial rate certification
documentation would reduce administrative
burden.

(1) Revise a footnote (#6) to remove a reference to
July 1, 2018 as this guide is applicable to rating
periods beginning July 1, 2019 through June 30,
2020.
(2) Use of standard terminology for initial rate
certification, rate amendment and revised rate
certification.
(3) Clarify that effective date of program changes
must be consistent with rate development
assumptions.
(4) Clarify that the terms and conditions of any state
remittance must be outlined in the rate certification.
(5) Remind states of timely filing requirements in 45
CFR 95, and timely submission of rate certifications.
(6) Remind states that a rate amendment is needed
when loss of program authority occurs.
(7) Clarify CMS's documentation expectations related
to certification of specific rates for each rate cell in
accordance with 42 CFR 438.4(b)(4) and 438.7(c).
(8) Clarify the certification must include an index that
identifies the location for each item described within
this guide and that the certification include not only an
index, but also follow the structure of the rate guide.
(9) Clarify that if there are services, populations or
programs that receive a higher FMAP, the costs
subject to this different FMAP must be separated in
the rate certification to the extent possible.
(10) Clarify that the state's actuary must describe
what is leading to large or negative changes in rates
from the previous year, and include a description of
any other material changes compared to the prior
rating period.
(11) Clarify that the rate certification include a list of
known amendments that will be provided to CMS in
the future with estimated timeline(s) for submission
and why the current certification cannot account for
changes that will be made to the rates.

Section I.2 Data - Add clarifications to be consistent
with the final rule including: data the state should
provide to the actuary and the related exception
process, rate development standards, and
documentation expectations.

Section I.3 Projected Benefit Costs and Trends Added clarifications to be consistent with the
final rule including: based only on allowable
Medicaid services, no assumptions based on
FMAP, if additional MHPAEA services are
included, how in-lieu of services are captured,
and clarifications on IMD

Section I.3: Projected Benefit Costs and Trends Clarify data request related to section 120002 of
Add clarifications to be consistent with the final rule the 21st Century Cures Action (P.L. 114-255).
including: no assumptions based on FMAP, further
clarifies that cost of an IMD as an in lieu of service
must not be used in rate development, rate
development standards and documentation
expectations for trend, documentation expectations
for material and non-material adjustments, and
documentation of any recoveries of overpayments
made to providers by health plans. Also adds a data
request related to section 12002 of the 21st Century
Cures Act (P.L. 114-255).

Clarify that when IMDs are used to provide in-lieu- (1) Clarify the documentation expectations for
the description of any data used or assumptions
of services, states may make a monthly
made in developing projected benefit cost
capitation payment to a MCO or PIHP for en
trends.
enrollee age 21 to 64 receiving inpatient
(2) Update regulatory citations for mental health
treatment in an Institution for Mental Disease
(IMD) for a short-stime stay of no more than 15 parity standards.
days during the period of the monthly capitation (3) Require an assurance that the payment
represents a payment amount that is adequate
capitation in accordance with 42 CFR 438.6(e)
to allow the MCO, PIHP or PAHP to efficiently
(note: This change was made to acknowledge
deliver covered services to Medicaid-eligible
this Federal requirements applies when IMD is
individuals in a manner compliant with
used to provide in-lieu-of services as some
contractual requirements.
states have other approved Medicaid authority
(4) Reminder that the costs of an IMD as an in
for IMD). Remove the data collection related to
section 12002 of the 21st Centure Cures Act as lieu of service must not be used in rate
CMS is working on a state survey to gather this development.
detail through another avenue. Include a
statement that states need to document the
amount of overpayments that MCOs collect from
providers and describe how those overpayments
were considered in the rate development
process (included in response to GAO study 18528 recommendation 3). A request that the
actuary describe in the rate certification the
chosen trend rates and explain any outlier and
negative trends (this item is included in the
documentation expectations as CMS has
routinely asked about this detail during the
review period and inclusion of this detail in the
initial rate certification documentation would
reduce administrative burden.

Burden Change

Section I - Describes the
expectations of all Medicaid
managed care actuarial
certifications

Reason for
Change

Introduction - Update to reference new regulatory
Introduction - Update to reference new regulatory
requirements that take effect with rating periods
requirements that take effect with rating periods
effective on or after July 1, 2017. Revises throughout effective on or after July 1, 2018.
the document to consistently reference a rate
certification (previously used terminology of both rate
certification and actuarial certification). Clarify that
states submit contract actions, actuarial
certification(s) and associated supporting
documentation as distinct documents within one
submission and if multiple rate certifications are
associated with the same contract action(s), that
states describe the supporting documentation that
relates to each certification.

Type of Change

July 2020 to June
2021

Introduction - updated the definition of actuarial
soundness to be in line with the Managed care
final rule and update the citations. Adds
language about how the elements in the guide
can improve processing times. Clarifies that the
actuarial certification needs to be a stand alone
document, separate from the contract.

July 2021 to June
2022 (new
version)

July 2019 to June
2020

July 2018 to June
2019

July 2017 to June
2018

Introduction - Adds reference to regulatory
requirement for capitation rates to be actuarially
sound, to be certified by an actuary that meets
standards set forth in 42 CFR §438.6,
appropriate for the covered population and
services for the period that the rates are effective,
and have been developed in accordance with
generally accepted actuarial practices and
principles.

January to
December 2015

Jan to June 2017
version

Introduction - include acknowledgements for: (1)
pending rulemaking; and (2) implementation of a
new accelerated rate review process.
Additionally, acknowledges that: (1) following
CMS guidance included within this guide is more
likely to result in a faster CMS review and reduce
the number of questions; and (2) while CMS
does not prescribe a specific format for supplying
the information in the rate certification, each of
the relevant sections in the guide must be
discussed in sufficient detail.

January to
December 2016

Introduction - Include acknowledgement that
CMS is conducting a comprehensive review of
the managed care regulations. Update to
reference new regulatory requirements that take
effect with rating periods effective on or after July
1, 2019.

Introduction - Describes why we
are releasing the guidance and
overall goals of the guide

Introduction (1) Remove reference to pending rulemaking.
(2) Indicate this guidance is released in accordance with 42 CFR 438.7(e) and now incorporates 2020 Final Medicaid and Children’s Health Insurance Program (CHIP) Managed Care Rule published in the Federal Register on
November 13, 2020 (CMS-2408-F) (85 FR 72754).
(3) Update language to reference that all standards and documentation expectations in the guide also apply to rate ranges in accordance with 42 CFR 438.4(c).
(4) Include language noting that this rate development guide does not replace or revise the guidance in place for prior rating periods. Indicate that adherence by states and their actuaries to the rate development standards and
documentation expectations outlined in this guide, will aid in ensuring compliance with the regulations and in CMS’s review and approval of actuarially sound capitation rates and associated federal financial participation.
(5) Include footnote #1 indicating that the contents of this document do not have the force and effect of law and are not meant to bind the public in any way, unless specifically incorporated into a contract. It additionally states that this
document is intended only to provide clarity to the public regarding existing requirements under the law.
(6) Revise footnote #2 to reference the federal standards for rate development are located in 42 CFR 438.4 through 438.7.
(7) Include reference to Appendix A which outlines the accelerated rate review process and procedures that was incorporated in the 2020-2021 rate guide.
(8) General updates to citations.

Revise

Streamline document and align with the 2020
No
Final Medicaid and Children’s Health Insurance
Program (CHIP) Managed Care Rule published
in the Federal Register on November 13, 2020
(CMS-2408-F) (85 FR 72754).

Section I - Update to reference rate ranges in accordance with 42 CFR 438.4(c). Also include language indicating that actuaries are obligated to follow Actuarial Standards of Practice in order to develop rates that are actuarially sound
and tie this to 42 CFR 438.4 through 438.7.

Revise

Alignment with the Final Rule; Improve and
No
clarify expectations for states and their actuaries

Section I-1: General Information
Revise
(1) Indicate all standards and documentation expectationsmoutlined in rate guide, unless otherwise specified, also apply for rate ranges developed in accordance with 42 CFR 438.4(c).
(2) Remove language indicating CMS will consider a rating period other than 12 months for rate certifications to address highly unusual circumstances, such as when a state is aligning program rating periods to ensure that it is aligned with 42 CFR 438.2. Thsi
will be handled on a case by case basis with states for unique circumstances.
(3) Remove footnote indicating it is not acceptable to certify rate ranges. The removed footnote also references the 1.5% de minimis changes to the rates is repetitive of a previous footnote and was also removed.
(4) Clarify that benefits provided on a non-risk basis must be summarized in the rate certification.
(5) Include footnote #9 providing a cross reference to Section I, Item 4 which describes additional requirements for the various types of special contract provisions in 42 CFR 438.6.
(6) Clarify CMS's documentation expectations related to rate amendments such that all differences from the most recently certified rates must be addressed including when rates have been impacted by a de minimis amount in accordance with 42 CFR
438.7(c)(3) and also address and account for differences from the most recently certified rates. Indicate this only applies to certified rates and not rate ranges.
(7) Include the documentation requirement that the actuary must confirm that any proposed differences among capitation rates according to covered populations are based on valid rate development and are not based on the rate of FFP associated with the
covered populations in a manner that increases federal costs in accordance with 42 CFR 438.4(b)(1). Deleted this language from all other sections as it provides more assurance to include here.The determination that differences in the assumptions,
methodologies, or factors used to develop capitation rates for MCOs, PIHPs, and PAHPs increase Federal costs and vary with the rate of FFP associated with the covered populations must be evaluated for the entire managed care program and include all
managed care contracts for all covered populations.
(8) Include footnote #10 to indicate that the rate guide utilizes the term “rate amendment” throughout this guide to reference an amendment to the initial rate certification.
(9) Include footnote #11 to indicate that in accordance with 42 CFR 438.4(c)(2)(ii), states that use rate ranges are not permitted to modify the capitation rates under 438.7(c)(3).
(10) Include footnote #12 to indicate that in accordance with 42 CFR 438.4(b)(1) and 438.7(d), CMS may require a state to provide written documentation and justification that any differences in the assumptions, methodologies, or factors used to develop
capitation rates for covered populations or contracts represent actual cost differences based on the characteristics and mix of the covered services or the covered populations.
(11) Indicate the conditions that must be met for an actuary to develop and certify a range of capitation rates per rate cell as actuarially sound and provide the documentation requirements for rate ranges in accordance with 438.4(c).
(12) Revise footnote #13 to include reference to CMS review and approval process for state directed payment arrangements under 42 CFR 438.6(c).
(13) Clarify CMS's documentation expectations related to accounting for the impacts of the COVID-19 public health emergency by using applicable national or regional data. CMS also recommends states implement a 2-sided risk mitigation strategy for rating
periods impacted by the public health emergence. This aligns with the CMCS Informational Bulletin published on May 14, 2020 and COVID Frequently Asked Questions for State Medicaid and CHIP Agencies. Also include language that the state must ensure
that it complies with the requirements in 42 CFR 438.6(b)(1), including that the risk mitigation strategy must be documented in the contract and rate certification documents for the rating period prior to the start of the rating period.
(14) Include language indicating that in accordance with 438.4(c)(2)(ii), States that use rate ranges are not permitted to modify the capitation rates under 438.7(c)(3). Also include reference stating that CMS standards for a revised rate certification if the state
and its actuary determine that changes are needed within the rate range during the rate year are outlined in Section I, Item 1.A.ix.c of the rate guide.
(15) Indicate that if the actuary certified rate ranges for the rate cell(s), the state may increase or decrease the capitation rates per rate cell within the certified rate range up to 1 percent during the rating period, in accordance with 42 CFR 438.4(c)(2).
(16) Clarify language around when states may use risk adjustment.
(17) Include a new footnote #15 indicating that states that implement capitation rate adjustments that result in an increase or decrease of more than 1.5% will need to submit a rate amendment and contract amendment per 42 CFR 438.7(c)(3).
(18) Include a new footnote #16 explaining that states are permitted to either use the rate range option under 42 CFR 438.4(c)(1) or use the de minimis rate adjustment under 438.7(c)(3), but state are not permitted to use both mechanisms in combination.
(19) Include a new footnote #17 explaining the documentation expectations for contract amendments that are required for all de minimis rate changes in accordance with 42 CFR 438.3(e), 438.4(b)(1), and 438.7(c)(3).
(20) Include a new footnote #18 indicating the requirements for when a state adjusts the capitation rates within the permissible 1% range in accordance with 42 CFR 438.4(c) when rate ranges are utilized.
(21) Clarify that states must submit a contract amendment in addition to a rate amendment when there is a loss of program authority due to courts of law, or changes in federal statutes, regulations or approval, and indicate that CMS can provide technical
assistance as needed.
(22) Include language in the documentation section indicating the certification must clearly indicate whether the actuary is either certifying capitation rates or capitation rate ranges.
(23) Include new footnotes (#19 and #20), with a reference to the preamble of the 2020 Managed Care Rule (85 FR 72764) and the documentation requirements for the criteria state's can use for paying managed care plans at different points within the rate
range.
(24) Include documentation expectations for when a state develops rate ranges per rate cell in accordance with 42 CFR 438.4(c).
(25) Include documentation requirements that the actuary must assure that any proposed differences among capitation rates according to covered populations are based on valid rate development and are not based on the rate of FFP associated with the
covered populations in a manner that increases Federal costs in accordance with 42 CFR 438.4(b)(1) and deleted from all other sections. Also indicate that the documentation underlying this assurance must be available if requested by CMS.
(26) Clarify documentation expectations around whether the state adjusted the actuarially sound capitation rates in the previous rating period by a de minimis amount in accordance with 42 CFR 438.7(c)(3).
(27) Di
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i
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t i th
tifi ti th
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i th i
f th COVID 19 bli h lth

Alignment with the Final Rule; Improve and
No
clarify expectations for states and their actuaries;
Request actuaries provide documentation in the
rate certification that is frequently asked as part
of CMS questions to reduce burden within
CMS's review process.

Section I-3: Projected Benefit Costs and Trends
(1) Remove the documentation requirement that the actuary must confirm that any proposed differences among capitation rates according to covered populations are based on valid rate development and are not based on the rate of
FFP associated with the covered populations (this is now in the General Information section above).
(2) Include footnote #21 indicating the state must ensure that it complies with 42 CFR 438.4(b)(1) and reference that rate development standards and documentation requirements are outlined in Section I, Item.1 of this guide.
(3) Added citation to section 1903(m)(7) of the Social Security Act in description of requirements for when IMDs are used to provide in-lieu-of services.
(4) Included footnote #22 with a reference to 42 CFR 438.4(b)(1) and cross-reference to Section I, Item 1 in this guide that discusses how variations in costs by FMAP need to be evaluated and justified/explained.

Alignment with the Final Rule: Streamline
documentation expectations.

Type of Change: Rev = Revision, Del = Deletion, Add = Addition, and Red = Redesgnation.

Revise

No

(1) Reminder the certification must document that
total payments under the incentive arrangement will
not exceed 105 percent of the approved rates.
(2) Clarify the time period for an incentive or a
withhold arrangement should be documented.
(3) Require documentation on the enrollees, services
and providers covered by the withhold arrangement.
(4) Require a description of the effect each withhold
arrangement has on rate development.
(5) Use of standard terminology for initial rate
certification, rate amendment and revised
certification.
(6) Clarify documentation expectations for directed
payments, including (a) documentation needed for
each directed payment; (b) impact on each rate cell;
(c) a descripton of any adjustment applied to account
for base period changes; (d) an indication that the
payment is consistent with the approved preprint and
associated correspondence; (e) if a preprint has not
yet been submitted, the certification should indicate
timeline for submission; (f) documentation
expectations specific to a maximum fee schedule; (g)
an explicit actuarial statement that the amount of the
separate payment term is certified; and (h)
confirmation that there are no additional directed
payments or reimbursement requirements (not
otherwise authorized) in the program that are not
addressed in the certification.
(7) Clarify CMS's standards and documentation
expectations for pass-through payments, including (a)
when a trend adjustment and/or reasonable estimates
are utilized; (b) state requirements if the payment is a
PMPM tied to enrollment; (c) documentation needed
for each payment; (d) identification of provider type of
payment; (e) identification of any directed payment
that targets the same providers receiving passthrough payment; and (f) documentation to verify
historical amount and allowable transition period

Section I-4: Special Contract Provisions Related to Payment
Revise
(1) Include new footnote #24 to indicate that this rate guidance does not address all requirements for these special contract provisions. States, plans and actuaries are encouraged to review 42 C.F.R. § 438.6 and additional guidance issued by CMS (posted on
Medicaid.gov and in the HHS Guidance Portal) for more information and guidance.
(2) Include requirement that all risk sharing arrangements must be described in the contracts and rate certification documents for the rating period prior to the start of the rating period and may not be added or modified after the start of the rating period in
accordance with 42 CFR 438.6(b)(1). Also include a new footnote (#25) providing guidance on this provision.
(3) Changed title and related langauge in Section 4.D from "Delivery System and Provider Payment Initiatives" to "State Directed Payments" for consistency.
(4) Clarify the types of state directed payments to conform to recent regulatory changes for state directed payments that are minimum fee schedules using Medicaid State Plan approved rates and those using rates not based on the Medicaid State Plan.
(5) Indicate that all state directed payments, except for minimum fee schedules using Medicaid State Plan approved rates, must receive written prior approval from CMS per 42 CFR 438.6(c)(2).
(6) Indicate that the state directed payment(s) included in the rate certification must be consistent with the information in the approved preprint and related preprint review documents in order for CMS to review and evaluate the state-directed payment and the
associated capitation rates and rate certification for approval under 42 CFR 438.4 through 438.7.
(7) Include requirement that all contract arrangements that direct expenditures of MCOs, PIHPs or PAHPs must be developed in accordance with 42 CFR 438.5.
(8) Include new footnote #27 clarifying that while some state directed payments do not require written approval prior to implementation, all state directed payments must meet the standards in 42 CFR 438.6(c)(2)(ii)(A) through (F) and be documented in the rate
certifications and states’ contracts with its managed care plans.
(9) Clarify that state must address how each state directed payment is reflected in the rates in accordance with 42 CFR 438.7(b)(6) in order to comply with the requirement that the rate certification include a description of any special contract provision related
to payment described in 438.6; in addition, CMS requires the information specified here in order to evaluate compliance of the state-directed payment under 42 CFR 438.6(c) and the rates as a whole under 42 CFR 438.4 through 438.7. Also indicate that the
documentation requirements are required to comply with 42 CFR 438.7(b)(6) and 438.7(d), and that the method by which a state incorporates a state directed payment into a related rate certification(s) will be identified and documented as part of the preprint
review process.
(10) Clarify that states "should" rather than "must" submit documentation to CMS that incorporates the total amount of the payment into the rate certification’s rate cells consistent with the distribution methodology described in the approved state directed
payment preprint, as if the payment information (e.g., providers receiving the payment, amount of the payment, utilization that occurred, enrollees seen, etc.) had been known when the rates were initially developed (only applicable to those state directed
payments utilizing separate payment terms) per OGC guidance.
(11) Clarify that states should use a table format when providing the documentation requested by CMS for the state directed payments utilized by the state within the applicable Medicaid managed care program to comply with 42 CFR 438.7(b)(6), 438.6(c) and
438.6(d).
(12) Clarify that the description of each state directed payment must be consistent with the approved preprint and related preprint review documentation.
(13) Clarify that each state directed payment rate adjustment must be separately identified and state cannot combine the impacts of state directed payments.
(14) Clarify documentation expectations for state directed payments utilizing separate payment terms.
(15) Indicate that pass-through payments to network providers that are hospitals, nursing facilities or physicians are allowable for the transition period identified in 42 CFR 438.6(d)(6) for states transitioning services and populations from a FFS delivery system
to a managed care delivery system when the sate meets the requirements in 42 CFR 438.6(d)(d) and the documentation requirements for these payments (per recent regulatory changes). Include new footnote #33 indicating this as well.
(16) Include new footnote #35 indicating that the new pass-through payment provision is effective for rating periods beginning on or after July 1, 2021 in accordance with the 2020 Final Medicaid and Children’s Health Insurance Program (CHIP) Managed Care
Rule published in the Federal Register on November 13, 2020 (CMS-2408-F) (85 FR 72754).
(17) Update citations throughout to ensure correct.
(18) Included language in the Pass-Through Payment section clarifying that states must document how the pass-through payment will be paid for clarity and consistency.
(19) Clarify documentation expectations for what states must submit regarding how the non-federal share of pass-through payments are financed.
(20) Include new footnote #36 indicating that States must use permissible funding sources that comply with federal statute and regulations, including section 1903(w) of the Act and 42 CFR Part 433 subpart B, to fund the non-federal share of pass-through
payments, per OGC and FMG guidance.
(21) Include language requesting states provide an explanation of any changes to the methodology utilized for the base amount calculation from the previous years’ calculations including a rationale and the fiscal impact of the proposed methodology changes.
This detail aids our review of compliance with 42 CFR 438.6(d) to evaluate any changes to the base amount calculation to ensure reasonableness of state’ base amount calulations, including any reasonable estimates they utilize in accordance with
438.6(d)(2)(iv).

Alignment with the Final Rule; Consistency
No
across CMS documents; Improve and clarify
expectations for states and their actuaries;
Request actuaries provide documentation in the
rate certification that is frequently asked as part
of CMS questions to reduce burden within
CMS's review process.

Section I.5 Non-benefit costs: Clarified that
assumptions on this group cannot be based on
FMAP, noted the Health Insurers Fee
Moratorium

Section I.5: Projected Non-Benefit Costs - Add
clarifications to be consistent with the final rule
including: rate development standards and
documentation expectations for non-benefit costs
and acuity adjustments as well as documentation
expectations for material adjustments. Clarify what
the health insurance providers fee is and reference
CMS FAQs to direct states and actuaries to this
guidance.

Clarify two issues related to Health Insurance
Providers Fee: (1) add the years (2018 or 2019)
for which the documentation should address how
the fee is incorporated into capitation rates; and
(2) clarify that state's actuary should provide
documentation as to whether or not the Health
Insurance Providers Fee has been included in
the capitation rates for 2014, 2015 and 2016.

Update to reference the Health Insurance
Providers Fee (HIPF) moratorium for the fee paid
for calendar year 2019 as well as the
documentation needed for the HIPF paid for
calendar year 2020. Clarify that the state's
actuary sound provide documentation as to
whether or not the HIPF has been included in
the capitation rates for 2014, 2015, 2016, and/or
2018.

(1) Update regulatory citations for mental health
parity standards.
(2) Update to guide to reflect fee requirements
and repeal for health insurance providers.
(3) Documentation of non-benefit costs
associated with operational costs associated wtih
the provision of services to populations covered
under the contract.
(4) Outline expectation that actuaries should
disclose historical non-benefit cost data in the
certification to the extent this information was
provided by the plans, and explain how the
historical non-benefit cost data was considered
in the non-benefit cost assumptions used in rate
development

Section I-5: Projected Non-Benefit Costs
(1) Remove all references to the Health Insurance Providers Fee (HIPF) as this has been repealed as of January 1, 2020.
(2) Remove the documentation requirement that the actuary must confirm that any proposed differences among capitation rates according to covered populations are based on valid rate development and are not based on the rate of
FFP associated with the covered populations (this is now in the General Information section above).

Revise

Alignment with The Further Consolidated
Appropriations Act, 2020, Division N, Subtitle E
§ 502; Streamline document

No

Section I-6: Risk Adjustment and Acuity Adjustments
(1) Remove language indicating CMS may consider acuity adjustments as a risk mitigation strategy.

Revise

Improve and clarify expectations for states and
their actuaries

No

Section II: Medicaid Managed Care Rates with Long-Term Services and Supports
(1) Clarify language indicating all general rate development standards outlined in Section I of this guide apply to rate development for all covered populations and services, but this section provides additional guidance that is specific to
rate development guidance for LTSS.

Revise

Improve and clarify expectations for states and
their actuaries.

No

(1) Utilize the term of "new adult group"
throughout the section for consistency.
(2) Reorganized this section to clarify CMS
documentation expectations for states that have
already expanded versus those that are
expanding to the new adult group for the first
time.

Section III: New Adult Group Capitation Rates
(1) Clarify language indicating all general rate development standards outlined in Section I of this guide apply to rate development for all covered populations and services, but this section provides additional guidance that is specific to
rate development guidance for the new adult group.
(2) Include language under Risk Mitigation Strategies to indicate that in accordance with 42 CFR 438.6(b), if the state utilizes risk-sharing mechanisms with its managed care plan(s) these arrangements must be documented in the
contract(s) and rate certification documents for the rating period prior to the start of the rating period, and must be developed in accordance with 438.4, the rate development standards in 438.5, and generally accepted actuarial
principles and practices. Also indicate that risk-sharing mechanisms may not be added or modified after the start of the rating period.
(3) Include new footnote #41 to clarify risk sharing mechanisms as per 42 CFR 438.6(b)(1).

Revise

Alignment with the Final Rule; Improve and
No
clarify expectations for states and their actuaries.

Creation of Appendix A that outlines the CMS
Medicaid Managed Care Rate Development
Summary for Accelerated Rate Reviews. The
appendix includes a summary of the accelerated
rate review process that is optional for states, the
criteria for participation, the required submission
process and materials, and the rate development
summary elements.

Appendix A
(1) Incorporate the potential use of rate ranges by states (given regulatory changes).
(2) Ask states to indicate that the actuary is certifying rates or rate ranges consistent with the certification covered by the previous full review.
(3) Include documentation expectations for non-benefit costs changing from the previous rating period.
(4) General editing of language for flow and streamlining purposes.

Revise

Alignment with the Final Rule; Request actuaries No
provide documentation in the initial rate
certification that is frequently asked as part of
CMS questions to reduce burden within CMS's
review process.

Section I.7 Risk mitigation, incentives - updated
for the final rule to include an attestation on
acuity, risk sharing, reinsurance and incentive
mechanisms being actuarially sound

Note that Section I.7 of January-June 2016 guide
(Risk Mitigation, Incentives and Related Contractual
Provisions) is eliminated and items were restructured
and consolidated into Sections I.4 and I.6 above as
described.

Section I.8 Other considerations: Added that
adjustments based on FMAP are not
permissible, the effective date of the change
should line up with the certification, and all
adjustments must be in the certification.

Note that Section I.8 of January-June 2016 guide
(Other Rate Development Considerations) is
eliminated and items were restructured and
consolidated into Section I.1 above as described.

Burden Change

July 2020 to June
2021

Correction of minor language to reflect language
consistency in the guide. Clarification that CMS
expects the rate certification to document that
incentive payments will not exceed 105 percent
of the capitation rates (this is already expressly
outlined in the rate development standards).
Clarification that the rate certification must certify
capitation payments minus any portion of the
withhold that is not reasonable achievable as
actuarially sound this is already expressly
outlined in the rate development standards).
Clarify the directed payment requirements for
delivery system and provider payment initiatives,
describe that these payment(s) can be
incorporated into rate development either in the
base capitation rates as a rate adjustment or
through a separate payment term and outline the
documentation requirements. Clarify the passthrough payment requirements, including the
necessary historical documentation that allows a
transition period for pass-through to hospitals,
physicians and nursing facilities, and outline the
related documentation requirements.

Reason for
Change

July 2019 to June
2020

Clarify rate development standards for risksharing mechanisms given the new requirement
that actuaries must certified rates and can no
longer certify rate ranges. Request a description
of how the payments are included in the
capitation rates consistent with the 438.6(c)
preprint submitted to CMS. Clarify the rate
development standards for pass-through
payments given the publication of the final
regulation for use of new or increased passthrough payments in Medicaid managed care
delivery systems (CMS-2402-F published on
January 18, 2017).

Type of Change

July 2018 to June
2019

Section I.4: Special Contract Provisions Related to
Payment - Create one sub-section to include all rate
development components pertaining to special
contract provisions (incentives, withholds, risksharing, delivery system and provider payment
initiatives, and pass-through payments) to streamline
the document into clear categories for states,
including moving some detail from Sections I.4 and
I.7 of the January-June 2017 guide into this section
(i.e. Pass-Through Payments and Risk Mitigation,
Incentives and Related Contractual Provisions). Add
clarifications to be consistent with the final rule
including: definitions of incentive payment and
withhold and the documentation expectations,
capitation payments minus any portion of the
withhold that is not reasonably achievable must be
actuarially sound, standards and documentation
related to risk-sharing strategies and reinsurance,
delivery system and provider payment initiatives,
definition a pass-through payment and clarification
that capitation rates may only include pass-through
payments to hospitals, physicians and nursing
facilities.

Section I.6: Risk Adjustment and Acuity
Adjustments - Note this section previously was
focused on Rate Range Development that has been
moved and consolidated to Section I.I above. Given
restructuring, this section now focuses on risk
adjustment and acuity adjustment to streamline the
document into clear categories for the state,
including moving some detail from Sections I.7 of
the January-June 2017 guide into this section (i.e.
Risk Mitigation, Incentives and Related Contractual
Provisions). Add clarifications to be consistent with
the final rule including: what is an acuity adjustment
and rate development standards and documentation
expectations for risk adjustment and acuity
adjustments.

July 2021 to June
2022 (new
version)

July 2017 to June
2018

Section I.4: Pass through payments - Aligned
the description of pass through payments with
the final rule and clarified when they can and
can't be included in the rates

Jan to June 2017
version

January to
December 2016

January to
December 2015

Section I.4: Pass Through Payments - Provides
descriptions of pass-through payments,
certification requirements, and supplemental
payment requirements.

Note that Section I.9 of January-June 2016 guide
(Procedures For Rate Certifications for Rate and
Contract Amendments) is eliminated and items were
restructured and consolidated into Section I.1 above
as described.
Section II: Managed Care Rate with Long Term
Services and Supports (MLTSS) - Provides
additional considerations for states with MLTSS
programs or programs that include MLTSS
benefits

Section II - Describes expectations
around actuarial certification
related to the Medicaid Expansion
population

Section III: Provides further clarification to what
was described in Section II of the 2015 guide
about expectations of the expansion group
considering this would be the third year of
expansion for some states.

Section II: Medicaid Managed Care Rates with LongTerm Services and Supports - Restructure to have
two components of each sub-section that clarify the
rate development standards and requirements for
appropriate documentation. Remove indicate that
blended rate structure is preferred in
acknowledgment that states operate different rate
development designs to achieve similar goals and
clarify that other payment structures, incentives or
disincentives by states.
Section III: updated the dates and made
clarifications on what data for risk mitigation
strategies would be requested in 2017 for the
new adult group as some states may be
removing the risk mitigation strategy. No
assumptions based on FMAP.

Section III: New Adult Group Capitation Rates Update the dates for previous rating periods that
states covered the new adult group in Medicaid
managed care plans.

Clarifies the rate development standards for New
Adult Group capitation rates given the new
regulatory requirement that actuaries must
certified rates and can no longer certify rate
ranges.

For states that required a risk mitigation strategy
specific to the Medicaid Expansion population for
the initial rating period that included this
population, document that CMS believes this
strategy should not be removed until the
following three criteria are met: (1) the state uses
data only from this population to develop
capitation rates; (2) the state has
settled/reconciled the previous risk mitigation;
and (3) the state can demonstrate that capitation
rates are stable or that rates have been adjusted
consistent with differences in early experience.

Type of Change: Rev = Revision, Del = Deletion, Add = Addition, and Red = Redesgnation.