Medicaid consulting for states


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The Milliman Medicaid Consulting Group uses our consultants’ many years of experience to leverage our knowledge, research, and analytic tools across the firm. The breadth and depth of knowledge available through this consulting group also enables us to create customized solutions for our clients in an efficient and effective manner. We have published numerous research papers covering topics that are important to our clients, including:

  • Medicaid expansion impact studies
  • State Medicaid waivers
  • Alternative expansion scenarios
  • Nationwide managed care financial results
  • ACA health insurer taxes
  • Impact of Hepatitis C drugs on Medicaid programs
  • Dual demonstration models

Milliman has more health insurance actuaries (over 270) who are members of the Society of Actuaries than any other consulting firm in the U.S.

The foundation of the Milliman Medicaid Consulting Group is the experience of our consultants and actuaries with developing client-focused solutions to Medicaid rate-setting and other impactful financial analysis while helping guide regulatory oversight and ensuring compliance with each of our projects.

Ad hoc financial analysis

Milliman is adept at processing technical and sometimes complex policy material that is produced by state and federal agencies. The basic structure of our process in producing financial impact estimates due to potential legislative changes is as follows:

  • Understand the issue or change taking place
  • Develop the analytical product which contains membership and financial implications
  • Analyze externalities
  • Communicate the results

During the course of this process, we use sound project management techniques to complete financial analysis according to client expectations. We value our working relationship with our Medicaid state agency clients and employ a collaborative process to ensure that transparency and open communication are achieved in all aspects of project completion.

Budget forecasting

A strong fiscal position is important to supporting the competitiveness and economic growth of state Medicaid agencies. Effective budgeting for Medicaid, which is generally the largest state program, is critical for maintaining long-term fiscal stability. Strong fiscal analysis, including risk management, is essential to the budgeting process.

Milliman partners with numerous state Medicaid agencies on budgeting and forecasting projects. We work with clients to establish budget analysis at a frequency that appropriately supports their needs, which includes the ongoing monitoring of Medicaid expenditures relative to the predetermined budget for the current fiscal year. A regular budget forecast update can provide early indicators for the direction of future expenditure projections and can subsequently assist states with understanding any needed policy and program changes.

Capitation rates

Medicaid managed care capitation rate-setting is a dynamic and complex process requiring continuous improvement and monitoring.

With the growing popularity of managed care as the primary source of care delivery, capitation rate-setting is now the most prominent component of our Medicaid consulting engagements. Milliman’s Medicaid Consulting Group is at the forefront of providing these services to our state agencies. We are involved in all aspects of the capitation rate-setting process, including:

  • Performing actuarial certification of capitation rates
  • Discussing capitation rate calculations with MCOs
  • Publishing data books
  • Reviewing methodologies with Centers for Medicare and Medicaid Services (CMS)
  • Developing risk adjustment scores

Our Medicaid capitation rate-setting methodology follows a general guide, but is customized to each client and population based on local characteristics, MCO market, benefits, and program maturity. Milliman has experience working with states to bring key insight to the development of actuarially sound capitation rates and assistance with policy design that promotes the mutual goal of providing quality care to Medicaid beneficiaries.

Our Medicaid experience is frequently supplemented by learning from consultants who specialize in other markets as pricing benefits has certain basic principles that extend across payers and emerging trends often affect multiple markets.

We have experience developing capitation rates for:

  • Non-disabled Medicaid populations
  • Disabled and elderly Medicaid populations
  • Nursing home and HCBS waiver Medicaid populations
  • Medicaid children with special needs
  • Medicaid children and adults with chronic diseases and co-morbid conditions, including mental health and behavioral conditions
  • Fully integrated care models, including acute and long-term care services for Medicare-Medicaid dual-eligible members
  • Populations with serious mental illness
  • Medicaid Managed Long Tern Services and Supports population

Operational consulting

Milliman has extensive practical experience conducting operational compliance audits for both its public and private payer clients. This experience includes audits of operational data as well as on-site audits of major service/functional areas to identify inefficiencies and potential opportunities for performance improvement.

Milliman draws on a deep pool of resources within the organization to support this work. The teams conducting the reviews are multidisciplinary and, depending on the areas of review, could consist of health plan operations experts, nurses, physicians, pharmacists, statisticians, or information systems consultants. Other Milliman subject matter experts may be brought in to support engagements as needed to provide advice and recommendations to successfully complete the project. Our team has broad and deep experience with most individuals bringing 10 or more years of relevant industry experience to our client engagements.

Our consultants have performed audits to verify:

  • Prompt payment of claims
  • Appropriate calculation of interest payments
  • Accuracy of beneficiary eligibility files
  • Accuracy of financial reporting
  • Accuracy of claim payment
  • Sufficiency of internal claims processing controls
  • Sufficiency of internal encounter data submission and management processes
  • Compliance with CMS data submission standards
  • Compliance with customer service standards
  • Claim payment in accordance with provider contracts

Milliman consultants work with health plans nationally and with many state Medicaid agencies. This broad exposure to a variety of requirements and processes has enabled us to identify best practices, to quickly and comprehensively assess a plan’s operational processes and procedures, and to develop recommendations for improvements targeted to achieve specific programmatic goals in a variety of settings.