Comments to ASB on Proposed Actuarial Standard of Practice, Medicaid Managed-Care Capitation Rate Development and Certification

The Association for Community Affiliated Plans (ACAP) thanks you for providing us with an opportunity to comment on the Exposure Draft “Medicaid Managed-Care Capitation Rate Development and Certification.” ACAP is an association of 57 nonprofit and community-based Safety Net Health Plans (SNHPs) located in 24 states. Our member plans provide coverage to 10 million individuals enrolled in Medicaid, the Children’s Health Insurance Program (CHIP) and Medicare Special Needs Plans for dually-eligible individuals.

This Proposed Actuarial Standard of Practice was posted on the Actuarial Standards Board website in December 2013. ACAP thanks the Actuarial Standards Board for its efforts to provide clear, practicable guidance for actuaries working for both states and Medicaid managed care organizations when developing and certifying capitation rates. We appreciate your willingness to consider our comments. ACAP developed our comments after consultations with actuaries of our member health plans, and our comments reflect the consensus of those discussions.

The Exposure Draft requested comments on seven specific questions. We have responded to these questions, and are also including comments in several additional areas of the proposed ASOP that we believe require clarification and/or modification.

1. This ASOP has been prepared to apply to both actuaries developing actuarial statements of opinion for a Medicaid MCO and to actuaries developing rate certifications under 42 CFR 438.6(c). Is this appropriate? Or should the ASOP be limited to actuaries developing rate certifications under 42 CFR 438.6(c)?

We believe it is appropriate for this ASOP to apply to actuaries developing actuarial statements of opinion for a Medicaid MCO and to actuaries developing rate certifications, including those occurring under 42 CFR 438.6(c). However, to avoid confusion, particularly with respect to some of the other activities with which plan actuaries can be tasked, such as developing IBNR certifications, we recommend that the proposed ASOP explicitly state that it applies 2 only to managed care capitation rate development and certification as part of the bid process for Medicaid (and, see below, CHIP) MCOs. We believe that this clarification will dispel any uncertainty that might occur with respect to understanding that this ASOP applies only to the actuaries when they are developing and certifying the rates paid to MCOs by governmental entities – in many states this will be the actuary working for or on behalf of the state, but in some states it will be the plan actuary developing rate bids to present to the state.

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