Medicare Risk-Adjusted Capitation Payments: From Research to Implementation
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Modified Capitation and Treatment Incentives for End Stage Renal Disease
This study developed a modified capitation payment method for the Medicare end stage renal disease (ESRD) program designed to support appropriate treatment choices and protect health plans from undue financial risk. The payment method consists of risk-adjusted monthly capitated payments for individuals on dialysis or with functioning kidney grafts, lump sum event payments for expected increment...
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Researchers at The Johns Hopkins University (JHU) developed two new diagnosis-oriented methodologies for setting risk adjusted capitation rates for managed care plans contracting with Medicare. These adjusters predict the future medical expenditures of aged Medicare enrollees based on demographic factors and diagnostic information. The models use the Ambulatory Care Group (ACG) algorithm to cat...
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By January 2000, approximately one sixth of all Medicare beneficiaries were enrolled in HMOs. Medicare payments made on their behalf are projected to total $40 billion for 2000.1 Historically, capitated payments to health plans—currently averaging $5100 per patient—have been based on a percentage of average costs in fee-for-service Medicare. Until now, these payments have been adjusted only for...
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This study evaluates the use of risk factors for chronic disease as health status adjusters for Medicare's capitation formula, the average adjusted per capita costs (AAPCC). Risk factor data for the surviving members of the Framingham Study cohort who were examined in 1982-83 were merged with 100 percent Medicare payment data for 1984 and 1985, matching on Social Security number and sex. Seven ...
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BACKGROUND Many wish to change incentives for primary care practices through bundled population-based payments and substantial performance feedback and bonus payments. Recognizing patient differences in costs and outcomes is crucial, but customized risk adjustment for such purposes is underdeveloped. RESEARCH DESIGN Using MarketScan's claims-based data on 17.4 million commercially insured liv...
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