Code of Colorado Regulations
2505 - Department of Health Care Policy and Financing
2505 - Medical Services Board (Volume 8; Medical Assistance, Children's Health Plan)
10 CCR 2505-10-8.200 - MEDICAL ASSISTANCE - SECTION 8.200 Physician Services, Dental, Vision Services, Medicaid Managed Care Program, EPSDT
Section 10 CCR 2505-10-8.215 - MEDICAID STATEWIDE MANAGED CARE SYSTEM CAPITATION RATE SETTING

8.215.1.A. Actuary- Individuals who both meet the qualifications of the division of insurance, and who also are Members of the American Academy of Actuaries, and therefore are able to provide for actuarial certification of Medicaid rates in accordance with 42 CFR 438.6(c).

The Department incorporates by reference 42 CFR 438.6(c). No amendments or later additions of this regulation are incorporated. Copies are available for inspection from the following person at the following address: Custodian of Records, Colorado Department of Health Care Policy and Financing, 1570 Grant Street, Denver, CO 80203. Any material that has been incorporated by reference in this rule may be examined at any state publications depository library.

8.215.1.B. Actuarially sound rates- For a defined population, a per member per month risk capitation amount that meets the requirements of 42 CFR 438.6(c) and is certified as actuarially sound by an actuary acting in his/her professional capacity.

8.215.1.C. Enrollee- A person who is eligible to receive services under a risk contract with the Department as a participant in the Medicaid Statewide Managed Care System.

8.215.1.D. Independent actuary- An actuary contracted by the Department who has not and will not contract with a Colorado Medicaid provider during the rate setting or rate effective periods and whose employer has not and will not provide actuarial services to a Managed Care Organization or Prepaid Inpatient Health Plan participating in the Medicaid Statewide Managed Care System during the rate setting or rate effective periods.

8.215.1.E. Managed Care Organization (MCO) shall mean an entity that has, or is seeking to qualify for, a comprehensive risk contract under 42 CFR § 438.2 to operate as part of the State agency's Medicaid Statewide Managed Care System as defined in Section 8.205.

8.215.1.F. Medicaid Statewide Managed Care System means the program defined in Section 8.205.

8.215.1.G. Prepaid Inpatient Health Plan (PIHP) shall mean an entity that administers the State agency's statewide system of community behavioral health care as defined in Section 8.205.9 under contract with the State agency, and on the basis of prepaid capitation payments, or other payment arrangements that do not use State plan payment rates; provides, arranges for, or otherwise has responsibility for the provision of any inpatient hospital or institutional services for its members; and does not have a comprehensive risk contract.

8.215.3.A. The Department shall make prepaid capitation payments based on actuarially certified rates to MCOs and PIHPs based upon a scope of services defined in the MCOs and PIHPs contracts.

8.215.3.B. The Department shall contract with an independent actuary to prepare and certify actuarially sound rate ranges.

8.215.3.C. The Department's contracts with the MCOs and PIHPs shall contain rates within the actuarially certified rate ranges prepared by the independent actuary.

8.215.3.D. Rates calculations shall include estimates of future utilization of covered services that are:

8.215.3.E. To determine a reasonable cost of the service utilization described above in 8.215.3.D, the Department shall establish a price per unit of service. Such pricing:

8.215.3.G. Data used to set rates shall be made available in summary form to any interested stakeholder.

8.215.3.H. The MCOs and PIHPs are required to maintain medical loss ratios of no less than 85% of total Medicaid capitations. Medical loss ratios of less than 85% shall result in a refund of premiums due to the Department in an amount such that the recalculated medical loss ratio, accounting for the premium change, meets the agreed upon threshold.

8.215.4.A. The Department shall publish a rate setting timeline when starting the process of establishing actuarially sound rate ranges.

8.215.4.B. The rate setting timeline shall provide explicitly for stakeholder feedback as part of the rate setting process.

8.215.4.C. The independent actuary shall consider stakeholder feedback in collaboration with the Department.

8.215.5.A. To the extent that the data used in rate setting come from the MCO or PIHPs, the MCO or PIHP shall provide a certification that the data supplied by the MCO or PIHP to the Department are accurate, truthful and represent costs and utilization solely for services covered under the MCO or PIHP contract for Medicaid eligible enrollees of that MCO or PIHP.

8.215.5.B. In accordance with 25.5-5-408(e) and prior to entering into a contract with the Department, the MCO or PIHP shall certify that the rates set forth in the contract are sufficient to assure the financial stability of the MCO or PIHP.

8.215.5.C. In accordance with 25.5-5-408(f)(l) and prior to entering into a contract with the Department, the MCO or PIHP shall retain an actuary to certify that the capitation rates set forth in the contract between the MCO or PIHP and the Department comply with all applicable federal and state requirements that govern said capitation payments. This certification must explicitly reference that the capitation rates conform to the federal requirement that rates be actuarially sound.

8.215.6.A. The Department shall establish cost-effective, capitated rates for the statewide system of community behavioral health care defined in Section 8.205.9 in a manner that includes cost containment mechanisms.

8.215.6.B. The cost containment mechanisms shall be consistent with the principles of actuarial soundness, as determined by the independent actuary.

8.215.6.C. These cost containment mechanisms shall include:

8.215.6.D. The Department may, upon consultation and feedback from the PIHPs and the stakeholder community, implement other cost containment mechanisms that it finds necessary to constrain rate growth to a level that is sustainable and appropriate.