This article examines the methodology New York State used to set capitation rates for a Medicaid health maintenance organization. By examining the methods used and the assumptions made in a particular case, some general lessons are drawn about the ratesetting process. Greater reliance on statewide data to assure fair and statistically stable estimates is needed. Although the article focuses on one State and its ratesetting for one particular plan (Health Care Plus), the issues raised have general interest for other plans and for other States concerned with the setting of capitation rates for Medicaid enrollees in prepaid plans.
This report is part of the RAND Corporation External publication series. Many RAND studies are published in peer-reviewed scholarly journals, as chapters in commercial books, or as documents published by other organizations.
Our mission to help improve policy and decisionmaking through research and analysis is enabled through our core values of quality and objectivity and our unwavering commitment to the highest level of integrity and ethical behavior. To help ensure our research and analysis are rigorous, objective, and nonpartisan, we subject our research publications to a robust and exacting quality-assurance process; avoid both the appearance and reality of financial and other conflicts of interest through staff training, project screening, and a policy of mandatory disclosure; and pursue transparency in our research engagements through our commitment to the open publication of our research findings and recommendations, disclosure of the source of funding of published research, and policies to ensure intellectual independence. For more information, visit www.rand.org/about/research-integrity.
The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.