Letter to CMS - Medicaid Managed Care Policies - Agency for ...

Plan Name:
AGENCY FOR HEALTH CARE ADMINISTRATION
BUREAU OF MANAGED HEALTH CARE
DRAFT FINANCIAL WORKSHEET FOR THE
CALCULATION OF THE QUARTERLY AND ANNUAL
MEDICAL LOSS RATIO
DEMONSTRATION YEAR 201_
Seven Digit Medicaid Provider ID#: ________________________
QUARTERLY ANNUAL
QUARTER ENDING: _________________ YEAR: __________
Section , Health Plan Medicaid Contract and CFR 45 Part 158, managed care
entities that provide health care covered services must expend at least eighty-five (85) percent of
the capitation paid by the Agency on those services, defined as medical and hospital services
only. If less than eighty-five (85) percent of the capitation is expended on these services, the
Federal Centers for Medicare and Medicaid Services will determine corrective action for non-
compliance under this contract.
The following simple calculation will determine the medical loss ratio:
Reform Capitation Paid to the Health Plan by
the Agency for Covered Health Care Services:
Health Care Expenses:
(Only authorized Codes) -- Fee-for-Service:
*(Paid to providers/subcontractors) -- Capitation:
Total Expenses:
Funds to graduate medical education institutions:
Contributions to designated state trust fund for the purpose of
supporting Medicaid and indigent care:
Reform Capitation minus Total Expenses:
(Total Expenses/Total Capitation) Medical Loss Ratio:
Note: The calculation shall utilize uniform financial data collected from all plans and shall be
computed for each plan on a statewide basis. The method for calculating the medical loss ratio
shall meet the following criteria:
(a) Except as provided in paragraphs (b) and (c), expenditures shall be classified in a manner
consistent with 45 C.F.R. part 158.
(b) Funds provided by plans to graduate medical education institutions to underwrite the costs
of residency positions shall be classified as medical expenditures, provided the funding is
sufficient to sustain the position for the number of years necessary to complete the
Page 3 of 4