Cover: Setting Medicare Capitation Rates for the Frail and Elderly

Setting Medicare Capitation Rates for the Frail and Elderly

Published 1987

by Joyce Mann, C. Richard Neu


Download eBook for Free

FormatFile SizeNotes
PDF file 3.4 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.


Purchase Print Copy

 Format Price
Add to Cart Paperback89 pages $30.00

As federal efforts to promote capitated delivery and financing arrangements in the Medicare program intensify, the method of calculating the capitation rate has come under increased scrutiny. The current method is based on the adjusted average per capita cost (AAPCC), an estimate of the Medicare cost of serving participants in risk-based programs if these participants were served instead by fee-for-service providers. This Note describes the method and data used to calculate and to update the AAPCC, reviews some of the limitations of the AAPCC methodology, notes some of the proposals that have been advanced for refining the AAPCC, discusses some alternative methods for setting capitation payment rates, considers promising avenues for future research, and describes an interim calculation of a revised adjuster to the AAPCC to reflect the higher costs of caring for the frail elderly.

This report is part of the RAND note series. The note was a product of RAND from 1979 to 1993 that reported other outputs of sponsored research for general distribution.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit

RAND 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.