Crosswalk: 2024-2025 Managed Care Rate Guidance

Section I - updated to reference the new regulatory Section I: Medicaid Managed Care Rates (changes
citations
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 subsection that clarify the rate development standards and
requirements for appropriate documentation.

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

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

Section I.1: General Information - Provided more
detailed description around documentation
expectations of states to provide throughout the
certification process.

Section I.1: General Information - Clarify that the
rating period must be 12 months to be consistent
with the final rule

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.

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

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
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 inlieu of services are captured, and clarifications on
IMD
Section I.4: Pass Through Payments - Provides
descriptions of pass-through payments,
certification requirements, and supplemental
payment requirements.

Section I.3: Projected Benefit Costs and Trends - Add
clarifications to be consistent with the final rule
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
Section I.4: Pass through payments - Aligned the
Section I.4: Special Contract Provisions Related to
description of pass through payments with the final Payment - Create one sub-section to include all rate
rule and clarified when they can and can't be
development components pertaining to special contract
included in the rates
provisions (incentives, withholds, risk-sharing, delivery
system and provider payment initiatives, and passthrough 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.

Clarify data request related to section 120002 of
the 21st Century Cures Action (P.L. 114-255).

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

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.

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 that when IMDs are used to provide in-lieuof services, states may make a monthly capitation
payment to a MCO or PIHP for en enrollee age 21
to 64 receiving inpatient treatment in an Institution
for Mental Disease (IMD) for a short-stime stay of
no more than 15 days during the period of the
monthly capitation capitation in accordance with 42
CFR 438.6(e) (note: This change was made to
acknowledge this Federal requirements applies
Clarify rate development standards for risk-sharing Correction of minor language to reflect language
mechanisms given the new requirement that
consistency in the guide. Clarification that CMS
actuaries must certified rates and can no longer
expects the rate certification to document that
certify rate ranges. Request a description of how incentive payments will not exceed 105 percent of
the payments are included in the capitation rates
the capitation rates (this is already expressly
consistent with the 438.6(c) preprint submitted to
outlined in the rate development standards).
CMS. Clarify the rate development standards for
Clarification that the rate certification must certify
pass-through payments given the publication of the capitation payments minus any portion of the
withhold that is not reasonable achievable as
final regulation for use of new or increased passactuarially sound this is already expressly outlined
through payments in Medicaid managed care
in the rate development standards). Clarify the
delivery systems (CMS-2402-F published on
directed payment requirements for delivery system
January 18, 2017).
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 pass-through 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.

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.

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.

Section I-1: General Information
(1) Include language indicating a letter from the certifying actuary could be certifying final capitation rates or rate ranges in accordance
with 42 C.F.R. § 438.4(c).
(2) Include new footnote specifying that for the regulatory requirement that states document any risk-sharing arrangement(s) prior to the
start of the rating period, CMS will accept states’ submissions of draft managed care contract actions that are not officially executed and
documentation from a state’s actuary that may not reflect final full rate development or is limited to a description of the risk-sharing
arrangement(s). Language is consistent with the updated State Guide to CMS Criteria for Medicaid Managed Care Contract Review and
Approval.
(3) Clarify documentation expectations for any applicable assumptions included or not included in rate development related to the COVID-19
public health emergency (PHE) within the rate certification to help mitigate common questions.
(4) Included footnote referencing previous footnote about documentation expectations for risk-sharing arrangement(s).
(5) Aligned language around rate ranges to reference upper bounds and lower bounds for consistency and clarify the documentation
expectations for each rate cell.
(6) Included specific documentation expecations addressing the COVID-19 PHE such as information related to utilization, enrollment,
deferred caseload, vaccinations or treatments and a description of any related costs covered on a non-risk basis outside of the capitation
rates. This helps mitigate the need for common questions to states.

Section I-1: General Information
(1) Indicate that dual eligible special needs plans (D-SNPs) under contract with a State Medicaid Agency must be identified as such in the
rate certification; and included an associated new footnote.
(2) Include language indicating CMS recommends states implement or continue 2-sided risk mitigation strategies for the period of time
following the end of the COVID-19 public health emergency until enrollment is expected to stabilize. This helps clarify expectations around
risk mitigation related to the public health emergency.
(3) Included language to clarify documentation expectations for rate development assumptions for unwinding.

Section I-2: Data
(1) Included a new footnote providing additional clarification around standards for selection of appropriate base data including that the data
must be from the 3 most recent years that have been completed prior to the rating period for which rates are being developed. Provides
additional guidance regarding appropriate base data (ie, 42 C.F.R. § 438.5(c)(2)) given recent state questions. This guidance is consistent
with preamble in 81 FR 27573.

Section 1-2: Data
(1) Provide additional guidance regarding the base data exception process due to the unique nature of the COVID-19 public health
emergency.
(2) Describe the exception process for base data requirements due to the COVID-19 public health emergency.

(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

Section I-1: General Information
(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

(1) Clarify the documentation expectations for the
description of any data used or assumptions made
in developing projected benefit cost trends.
(2) Update regulatory citations for mental health
parity standards.
(3) Require an assurance that the payment
represents a payment amount that is adequate to
allow the MCO, PIHP or PAHP to efficiently deliver
covered services to Medicaid-eligible individuals in

Section I-3: Projected Benefit Costs and Trends
Section 1-3: Projected Benefit Cost 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 (3) Clarified that documentation must be provided to support the chosen trend rate and explanation of outlier and/or negative trends.
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.

(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.

Section I-4: Special Contract Provisions Related to Payment
(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

Section I-4: Special Contract Provisions Related to Payment
(1) Included a new footnote referencing a previous new footnote about documentation expectations for risk-sharing arrangement(s).
(2) Expanded documentation requirements for risk-sharing arrangements to include documentation demonstrating that the arrangement is
consistent with pricing assumptions used in rate development and that it does not result in a remittance if calculated based on pricing
assumptions used in capitation rate development. Mitigates the need for common questions to states.
(3) Clarified the documentation needed when a remittance is required to mitigate the need for common questions to states.
(4) Clarified that the rate certification and supporting documentation must include a description of each state directed payment, including
those that do not require prior approval in accordance with 42 C.F.R. § 438.6(c). This includes minimum fee schedules using Medicaid
State plan approved rates as defined in 42 C.F.R. § 438.6(a).
(5) Included language and a new footnote indicating that in accordance with 42 C.F.R. § 438.6(d)(5), for rating periods beginning on or
after July 1, 2022, states cannot require pass-through payments for physicians or nursing facilities. Pass-through payments for physicians
and nursing facilities are no longer allowed as the transition period has ended. The only exception relates to states initially transitioning
services or populations from a FFS delivery system to a managed care delivery system, per 42 C.F.R. § 438.6(d)(6).
(6) Updated the allowable amount of hospital pass-through payments to be the "lesser of" historical amount or 50 percent of the base
amount in accordance with 42 C.F.R. § 438.6(d)(3).
(7) Clarified that the base amount, when discussed in reference to hospital pass-through payments, is used when determining the allowable
amount of pass-through payments for hospitals as defined in 42 C.F.R. § 438.6(d)(2).
(8) Corrected citations throughout the pass-through payment section related to 42 C.F.R. §§ 438.6(d)(2)(i)(A), (i)(B), (ii)(A) and (ii)(B) and
42 C.F.R. § 438.6(d)(6).

Burden Change

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.

Introduction
(1) Incude Reference to Appendix B which describes additional documentation requred when in lieu of services and/or settings are utilized.
(1) Remove introductory reference to 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) as this was introduced in the Rate Guide last year.
(2) Edit footnote to remove reference that all regulations related to rate setting at 42 C.F.R. §§ 438.4, 438.5, 438.6 and 438.7 are applicable
to rating periods beginning on or after July 1, 2021 as that rating period has passed and CMS wishes to update the footnote to be standard
and reference applicability to all rating periods going forward.
(3) Include new footnote to indicate that states must comply with all applicable federal statutory and regulatory requirements as well as
guidance that impacts Medicaid managed care rate development. Also added language noting that CMS will evaluate if addendums to this
rate guide are necessary if any new federal requirements are implemented.

Reason for
Change

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

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.

Type of Change

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.

July 2024-June
2025

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.

July 2023-June
2024

July 2020 to
June 2021

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

July 2022-June
2023

July 2019 to
June 2020

Introduction - Update to reference new regulatory
requirements that take effect with rating periods
effective on or after July 1, 2017. Revises throughout
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.

July 2021 to
June 2022

July 2017 to
June 2018

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 2018 to
June 2019

Jan to June
2017 version

January to
December 2016

January to
December 2015

Introduction - Describes why we are Introduction - Adds reference to regulatory
requirement for capitation rates to be actuarially
releasing the guidance and overall
sound, to be certified by an actuary that meets
goals of the guide
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.

Table of Contents has been added.

New

Allows reader to easily reference topics of interest. No

Section 1 - Delete last sentence referencing ASOP No. 49 stating "The applicable requirements under 42 CFR § 438.4 and 438.5 are
consistent with ASOP No. 49."

Revise

Removed due to OACT's request as the Actuarial
No
Standards Board has approved a proposal to revise
Actuarial Standard of Practice (ASOP) No. 49.

Section I-1: General Information
Revise
and
(1) Included a new footnote that remittance provisions related to medical loss ratio (MLR) must comply with 42 CFR 438.6(b)(1) and be
New
documented in the contract and rate certification documents prior to the start of the rating period and cannot be changed retroactively.
(2) Streamlined language related to the public health emergency to include references to "the unwinding of the public health emergency"
and deleted the reference to the Consolidated Appropriations Act, 2023.
(4) Removed reference to the CMCS Informational Bulletin published on May 14, 2020 and COVID Frequently Asked Questions for State
Medicaid and CHIP Agencies for further information regarding rate development and risk mitigation considerations around the COVID-19
public health emergency in order to ensure the information in the Guide pertains to the current rating period only.
(5) Included language indicating the certification must document how the rate development ensures the managed care entity would acheive
the MLR standard of at least 85 percent, as required per 42 CFR § 438.4(b)(9); as well as the requirement that actuarially sound capitation
rates must also take into account the managed care entity's past MLR and document how this informed rate development in the certification.

Improve and clarify expectations for states and
their actuaries. Streamlined references to the
COVID-19 public health emergency to ensure the
Rate Guide is up-to-date with current guidance.

No

Section I-4: Special Contract Provisions Related to Payment
(1) Update the allowable amount of hospital pass-through payments to be the "lesser of" historical amount or 30 percent of the base amount
in accordance with 42 CFR § 438.6(d)(3).

Revise

Update expectations to align with regulatory
requirements, and reduce common questions to
states.

No

Section II: Medicaid Managed Care Rates with Long-Term Services and Supports
(1) Added heading of "Applicablity of Section I for MLTSS" to Section II. 1. A

Revise
and
New

Improve and clarify expectations for states and
their actuaries.

No

Section 1-3: Projected Benefit Costs and Trends
(1) Clarifiy that if a state seeks to pay managed care plans for state-only funded services, the state must do so via separate state-only
funded payments. Payments for these services may not be included in the Medicaid rate certification submitted for CMS review and
approval. States must only include services allowed in 42 CFR §§ 438.3(c)(1)(ii) and 438.3(e).
(2) Clarified rate development policy standards and documentation expectations for in lieu of services and settings to account fof guidance
in a SDML published on January 4, 2023 (SMD 23-001) as well as to address standard state questions.

Section I-4: Special Contract Provisions Related to Payment
(1) Clarify that states' actuaries are expected to review state directed payments and confirm alignment between the approved preprint and
rate certification documentation for each state directed payment.
(2) Clarify expectation that all state directed payments must be documented in the rate certification and states cannot utilize the de minimis
flexibility outlined in 42 CFR §§ 438.4(c)(2)(ii) and 438.7(c)(3) for changes to these payments.
(3) Update the allowable amount of hospital pass-through payments to be the "lesser of" historical amount or 40 percent of the base amount
in accordance with 42 CFR § 438.6(d)(3).
(4) Provide additional guidance around the calculation of the base amount and adjustments states may use to account for the COVID-19
public health emergency, and related documentation expectations.
(5) Create a new separate section for acuity adjustments, clarify when retrospective acuity adjustments can be used for unwinding of
COVID-19 PHE, and clarify when a state must submit a certified rate amendment when retrospective acuity adjustments result in revisions
to capitation rates.

(1) Update regulatory citations for mental health
Section I-5: Projected Non-Benefit Costs
parity standards.
(1) Remove all references to the Health Insurance Providers Fee (HIPF) as this has been repealed as of January 1, 2020.
(2) Update to guide to reflect fee requirements and (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
repeal for health insurance providers.
with the covered populations (this is now in the General Information section above).
(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.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.

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

Section I.7 Risk mitigation, incentives - updated for Note that Section I.7 of January-June 2016 guide (Risk
the final rule to include an attestation on acuity,
Mitigation, Incentives and Related Contractual
risk sharing, reinsurance and incentive
Provisions) is eliminated and items were restructured
mechanisms being actuarially sound
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.

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 III - Describes expectations Section III: Provides further clarification to what
around actuarial certification related was described in Section II of the 2015 guide
about expectations of the expansion group
to the Medicaid Expansion
considering this would be the third year of
population
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.

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.

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.

(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).

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.

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

Section III - New Adult Group Capitation Rates
(1) Included a new footnote referencing footnote about documentation expectations for risk-sharing arrangement(s).