Memorandum in Support

For Immediate Release: March 20, 2023

A.5381 (Paulin) — AN ACT to amend the social services law, in relation to determination and approval of reimbursement rates for managed care providers under Medicaid.

This legislation, A.5381, would expand the level of detail provided to Medicaid managed care plans by the Department of Health (DOH) and the State’s actuary in relation to rate development.  The additional detail outlined in this legislation will provide greater transparency into the State’s Medicaid managed care rate development process and allow plans to better analyze the adequacy of the rates set by the Department and understand the State’s assumptions.

A substantial portion of Medicaid funding is managed by health plans participating in the program, who are paid a capitated rate set by DOH and the State’s actuary, to cover a broad benefit package of services.  Under the best circumstances, there would be greater transparency into the data used and assumptions made by the State’s actuary and additional collaborative discussion between the State and plans prior to submission of rates to the Centers of Medicare and Medicaid Services (CMS) for approval.  While DOH shares a significant amount of information, plans often still feel like they do not have adequate detail to accurately analyze the rates to determine whether the base data is correct, trend factors are adequate and whether all factors that should be considered are accurately reflected in the rates.

This legislation should improve the ability of DOH and plans to have constructive discussions about Medicaid managed care rates, by providing greater transparency.

For these reasons, HPA supports A.5381.