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CMS Finalizes Medicaid Managed Care Rate-Setting Guide

The Centers for Medicare & Medicaid Services (CMS) has finalized the 2016 Medicaid Managed Care Rate Development Guide. This guide aims to ensure CMS receives more consistent and complete documentation with rate certifications than in previous years. The guidance covers the information needed to develop actuarial rate certifications, such as benefit cost projections, pass-through payments, and risk mitigation strategies.

All Medicaid managed care rates that are established in calendar year 2016 and are subject to actuarial soundness requirements must comply with this guidance. Medicaid managed care payment rates submitted to CMS for review must be certified by an actuary, appropriate for the covered population and services for the effective period, and developed in accordance with generally accepted actuarial practices and principles. CMS will use the following principles to ensure managed care plans meet these requirements:

  • payment rates are reasonable and comply with applicable laws for Medicaid managed care
  • payment rate development process complies with applicable Medicaid laws, including eligibility, benefits, financing, waiver or demonstration project requirements, and program integrity
  • documentation sufficiently shows that the development process meets generally accepted actuarial practices and principles

If you have questions or concerns, please contact Erin O’Malley, director of policy, at or 202.585.0127.


About the Author

Matt Buechner is the policy and advocacy associate for America's Essential Hospitals.

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