2017 Session

Budget Amendments - HB1500 (Committee Approved)

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Improve Medicaid's Capitation Rate-Setting Process

Item 310 #2h

Item 310 #2h

First Year - FY2017 Second Year - FY2018
Health and Human Resources
Department of Medical Assistance Services FY2017 $0 FY2018 $482,502 GF
FY2017 $0 FY2018 $482,502 NGF
FY2017 0.00 FY2018 2.00 FTE

Page 312, line 42, strike "$222,406,344" and insert "$223,371,348".

Page 316, after line 3, insert:

"R.1. The Department of Medical Assistance Services (DMAS) shall make improvements to the rate-setting process to ensure managed care capitation rates are not higher than necessary.  The DMAS shall work with its actuary to identify potential inefficiencies in the Medallion program and adjust capitation rates for expected efficiencies, effective no later than fiscal year 2019. DMAS and its actuary should phase in this adjustment over time based on the portion of identified inefficiencies that managed care organizations can reasonably reduce each year.

2.The Department of Medical Assistance Services and its actuary should adjust Medallion capitation rates to account for a portion of  expected savings for initiatives required by the state.

3.The Department of Medical Assistance Services and its actuary shall monitor Medallion medical spending for related-party arrangements and adjust historical medical spending when necessary to ensure that capitation rates do not cover spending above market value."


(This amendment adds $482,500 from the general fund and a like amount of matching federal Medicaid funds, two positions and language to implement recommendations from a recent review of the Virginia Medicaid Program by the Joint Legislative Audit and Review Commission to improve cost efficiency in the Medicaid program by improving Medicaid's rate-setting process to ensure capitation rates are not higher than necessary.)