Milliman Client Report

New York Fully Integrated Duals Advantage (FIDA) Program Examination of Medicare A/B capitation rates for 2014 December 11, 2013

Prepared for: New York Health Plan Association Prepared by:

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Jeremy D. Palmer, FSA, MAAA Principal and Consulting Actuary Milliman, Inc.

New York Fully Integrated Duals Advantage (FIDA) Program: Examination of Medicare capitation rates for 2014 This report was prepared by Milliman exclusively for the use or benefit of the New York Health Plan Association for a specific and limited purpose. The report uses data from various sources, which Milliman has not audited. Any third-party recipient of this report who desires professional guidance should not rely upon this report, but should engage qualified professionals for advice appropriate to its own specific needs. This report should only be reviewed in its entirety. Copyright by Milliman, Inc. December 11, 2013

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TABLE OF CONTENTS 1. Introduction .................................................................................................................................... 3 2. Executive Summary ....................................................................................................................... 4 3. Potential Adjustments to the Medicare Parts A/B Offered Rates .................................................. 7 a. Frailty Adjustment Factor .................................................................................................. 7 b. Bad Debt Adjustment Factor ............................................................................................ 7 4. Development of the 2014 FIDA Medicare Parts A/B Offered Rate ............................................... 8 a. b. c. d. e. f. g.

Published FFS Standardized Rate ................................................................................... 8 Update for Repricing ......................................................................................................... 8 Coding Intensity Offset ..................................................................................................... 8 Incorporating Medicare Advantage Component ............................................................... 8 Sequestration Adjustment................................................................................................. 8 Explicit Savings Target Adjustment .................................................................................. 8 Risk Adjustment Factors ................................................................................................... 9

5. Development of the Estimated 2014 Medicare Parts A/B Experience ........................................ 10 a. b. c. d.

Data Book Base Data ..................................................................................................... 10 Trends to CY 2014.......................................................................................................... 10 ESRD and Hospice Adjustment...................................................................................... 10 Sequestration Adjustment............................................................................................... 10

Appendix 1 – Offered Rate Development Appendix 2 – Experience Rate Development

Support for this work was provided by the New York State Health Foundation (NYSHealth). The mission of NYSHealth is to expand health insurance coverage, increase access to high-quality healthcare services, and improve public and community health. The views presented here are those of the authors and not necessarily those of the New York State Health Foundation or its directors, officers, or staff.

New York Fully Integrated Duals Advantage (FIDA) Program: Examination of Medicare capitation rates for 2014 This report was prepared by Milliman exclusively for the use or benefit of the New York Health Plan Association for a specific and limited purpose. The report uses data from various sources, which Milliman has not audited. Any third-party recipient of this report who desires professional guidance should not rely upon this report, but should 2 engage qualified professionals for advice appropriate to its own specific needs. This report should only be reviewed in its entirety. Copyright by Milliman, Inc. December 11, 2013

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1. INTRODUCTION Milliman, Inc. (Milliman) has been retained by the New York Health Plan Association, Inc. (HPA) to create this report using funds provided by the New York State Health Foundation. This report contains an educational foundation related to rate-setting considerations for the proposed New York Fully Integrated Duals Advantage (FIDA) program. The FIDA program is New York’s version of a capitated financial alignment demonstration for Medicare and Medicaid dual eligible individuals offered by the Centers for Medicare and Medicaid Services (CMS) as authorized in the Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010, collectively referred to as the Affordable Care Act (ACA). The scope of this report included a focus on the Medicare Parts A/B component of the offered calendar year 2014 FIDA capitation rates contained in the report of November 8, 2013, developed by CMS and the New York State Department of Health (DOH). Specifically, the analysis included a comparison of the offered Medicare capitation rates to the estimated Medicare fee-for-service (FFS) experience of the FIDA-eligible population and a discussion of any implicit savings resulting from the capitation rate development methodology. It should be noted that we do not recommend or promote any particular decision related to the FIDA program. Additionally, this report does not calculate or prescribe a particular capitation rate-setting methodology nor does it project actual experience under the FIDA program. The views and opinions presented in this report are those of the author and do not reflect the collective opinions of Milliman or other Milliman consultants. The information contained in this report was prepared for the New York Health Plan Association. Milliman's work may not be provided to third parties without Milliman's prior written consent. Written consent is hereby granted for the New York State Department of Health, the Centers for Medicare and Medicaid Services, other appropriate New York state agencies, the Division of Budget, the Executive Chamber, and the HPA member organizations. This report should be distributed in its entirety, including all supporting documentation. Milliman does not intend to benefit and assumes no duty or liability to third parties who receive this letter, even if consent to its release is given. Milliman recommends that any recipient be aided by their own actuary or other qualified professional when reviewing this report. Readers of this report should consider their unique circumstances and not place reliance upon information herein that would replace or otherwise contradict their own analytics and financial evaluations. In developing this report, we relied on data and other information obtained from the New York FIDA Finance Workgroup, CMS, and other public sources of information. We have not audited or verified this data and other information. We performed a limited review of the data used directly in our analysis for reasonableness and consistency. If the underlying data or information is inaccurate or incomplete, the results of our analysis may likewise be inaccurate or incomplete. The services provided by Milliman to the HPA were performed under the signed agreement dated November 12, 2010. This report was created by Jeremy D. Palmer, FSA. Mr. Palmer is a principal and consulting actuary in the Indianapolis office of Milliman. Mr. Palmer is a Fellow of the Society of Actuaries and member of the American Academy of Actuaries. Mr. Palmer meets the qualification standards for performing the analyses contained in this report.

New York Fully Integrated Duals Advantage (FIDA) Program: Examination of Medicare capitation rates for 2014 This report was prepared by Milliman exclusively for the use or benefit of the New York Health Plan Association for a specific and limited purpose. The report uses data from various sources, which Milliman has not audited. Any third-party recipient of this report who desires professional guidance should not rely upon this report, but should 3 engage qualified professionals for advice appropriate to its own specific needs. This report should only be reviewed in its entirety. Copyright by Milliman, Inc. December 11, 2013

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2. EXECUTIVE SUMMARY The Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010, collectively referred to as the Affordable Care Act (ACA), introduced the ability to develop, test, and validate programs to integrate the care for Medicare/Medicaid dual eligible beneficiaries. The state of New York is pursuing a demonstration project under this authority currently referred to as the Fully Integrated Duals Advantage (FIDA) program, which is to be effective in 2014. The demonstration is described in detail in the Memorandum of Understanding (MOU) between CMS and the state of New York. This report provides comments and considerations intended to educate key stakeholders with information to assist in the decisions they face in the development of the FIDA program, specifically as it relates to the capitation rate-setting methodology and assumptions. The FIDA capitation rates will include three benefit levels, each with a distinct calculation methodology. The benefit levels include Medicare Parts A/B, Medicaid, and Medicare Part D. The sole focus of this report is the Medicare Parts A/B capitation rate component, excluding the end-stage renal disease (ESRD) population. The FIDA draft baseline capitation rates for the Medicare Parts A/B component have been provided by CMS and DOH in the report of November 8, 2013, "Fully Integrated Duals Advantage Draft Rate Report." The methodology relies upon published estimates of spending absent the demonstration. Specifically, the base Medicare Parts A/B capitation rates are a blend of the Medicare fee-for-service (FFS) standardized county rates and the Medicare Advantage projected payment rates for calendar year 2014. It should be noted that the baseline rates will be risk adjusted using the standard Medicare hierarchical condition categories (HCC) risk adjustment methodology with an adjustment to remove the coding intensity factors for year one of the demonstration for current FFS enrolled individuals. The key question this report addresses is how well the draft Medicare Parts A/B capitation rates offered reflect the anticipated FFS experience of the population expected to enroll in FIDA. Each of the participating health plans may additionally need to assess how its anticipated experience, including administration and profit, compare to the FFS experience presented in this report. The capitation rates rely upon a methodology that is not based directly on the historical program costs for the FIDA-eligible population. To estimate the difference between the offered rates and the anticipated FFS experience, we used historical program costs shared by DOH based on information provided by CMS for the FIDA population, with adjustments for trend, population differences, and program changes. Figure 1 summarizes the comparison of the offered rates to the anticipated FFS experience for calendar year (CY) 2014 on a per-member-per-month (PMPM) basis.

New York Fully Integrated Duals Advantage (FIDA) Program: Examination of Medicare capitation rates for 2014 This report was prepared by Milliman exclusively for the use or benefit of the New York Health Plan Association for a specific and limited purpose. The report uses data from various sources, which Milliman has not audited. Any third-party recipient of this report who desires professional guidance should not rely upon this report, but should 4 engage qualified professionals for advice appropriate to its own specific needs. This report should only be reviewed in its entirety. Copyright by Milliman, Inc. December 11, 2013

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Figure 1: Comparison of Medicare A/B Offered Rates to Estimated Experience, 2014 (excl. ESRD)

County

CY 2011 Member Months

2014 Offered Rate PMPM

2014 Estimated FFS Experience PMPM

% Difference

Nassau

104,464

$ 1,836.97

$ 1,915.57

(4.1%)

NYC-Bronx

289,095

1,880.06

1,697.63

10.7%

NYC-Kings

603,630

1,829.92

1,907.75

(4.1%)

NYC-Manhattan

293,448

1,616.78

1,493.44

8.3%

NYC-Queens

331,646

1,695.23

1,843.79

(8.1%)

57,331

1,928.98

1,558.58

23.8%

106,376

1,851.59

1,985.99

(6.8%)

91,003

1,711.08

2,007.45

(14.8%)

1,876,993

$ 1,779.41

$ 1,798.35

(1.1%)

NYC-Richmond Suffolk Westchester Composite Composite Range

(4.6) – 2.6%

Primary results 

On a composite basis, the offered capitation rates for the Medicare Parts A/B component of the FIDA rate compare well to the estimated 2014 FFS experience, given that the offered rates have a 1% explicit savings incorporated. However, the potential variability by county could cause the offered rates to be above or below the projected experience by several percentage points.



Each participating health plan will need to assess its unique circumstances based on the range of potential results. To the extent that the point estimate difference of (1.1%) is assumed correct, the plans will need to determine if their expected experiences, including the impact of managed care as well as administration and profit, is feasible given this level of funding. For example, if administration and profit are 10% of the capitation rate, a health plan would need to achieve approximately 11% in claim savings to cover the 1.1% implied savings and their administration and profit.



There are two primary levers that CMS and DOH could consider to adjust the offered rates to make the comparisons more favorable. The first is the implementation of the frailty factor adjustment currently used in the Program of All-Inclusive Care for the Elderly (PACE) and Fully Integrated Dual Eligibles (FIDE) Special Needs Plans (SNP) risk-adjusted capitation rates. The second is the addition of a bad debt adjustment to the offered rates similar in size and scope to the values included in other state dual demonstration rate-setting methodologies.



The results by county may be informative but should be used with caution (see assumptions below).

New York Fully Integrated Duals Advantage (FIDA) Program: Examination of Medicare capitation rates for 2014 This report was prepared by Milliman exclusively for the use or benefit of the New York Health Plan Association for a specific and limited purpose. The report uses data from various sources, which Milliman has not audited. Any third-party recipient of this report who desires professional guidance should not rely upon this report, but should 5 engage qualified professionals for advice appropriate to its own specific needs. This report should only be reviewed in its entirety. Copyright by Milliman, Inc. December 11, 2013

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Key assumptions 

County results. The results vary significantly by county and should be interpreted with caution. Several of the counties may be too small to be considered credible. In larger counties illustrating more significant differences between the offered rates and the projected FFS experience, we did not have sufficient information to analyze the cause of the variation.



Calendar year 2011 member months. The counties were composited using the CY 2011 member month distribution provided in the data books from DOH. The composite results assume that the 2014 distribution of membership is consistent with this historical membership period.



2014 offered rate PMPM. The offered rates were derived from the November 8 CMS/DOH report, with adjustments for the estimated risk scores of the eligible population. Specifically, the offered rates were estimated from the 2014 published fee-for-service (FFS) county benchmarks and estimated Medicare Advantage payment rates, adjusted for repricing, coding intensity, 1% required program savings, 2% sequestration amount, and estimated risk scores for the FIDA-eligible population. The risk scores provided by CMS/DOH were adjusted to replace the 2011 coding intensity adjustment with the 2014 coding intensity adjustment. Appendix 1 illustrates the development of the offered rates in Figure 1.



2014 estimated FFS experience PMPM. The estimated FFS experience PMPM values were derived from the data book provided by DOH for the FIDA program, with adjustments for trend, population differences, and program changes. Specifically, the historical CY 2011 experience was trended to CY 2014 at a rate of 2.0% annually, adjusted to remove the ESRD and hospice beneficiaries, and reduced by the 2% sequestration amount. The historical data represented Medicare FFS expenditures only and did not include Medicare Advantage experience. Appendix 2 illustrates the development of the estimated FFS experience PMPM in Figure 1.



Composite range of results. The composite difference is illustrated as a point estimate and a range of potential results. The range reflects that several of the calculations contain estimates and assumptions for future experience. The range primarily uses differing levels of annual trend (low of 1.5% and high of 2.5%, annually) and alternative adjustments to remove the ESRD experience from the CY 2011 data book experience (plus or minus 2% around best estimate of 8% reduction).

New York Fully Integrated Duals Advantage (FIDA) Program: Examination of Medicare capitation rates for 2014 This report was prepared by Milliman exclusively for the use or benefit of the New York Health Plan Association for a specific and limited purpose. The report uses data from various sources, which Milliman has not audited. Any third-party recipient of this report who desires professional guidance should not rely upon this report, but should 6 engage qualified professionals for advice appropriate to its own specific needs. This report should only be reviewed in its entirety. Copyright by Milliman, Inc. December 11, 2013

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3. POTENTIAL ADJUSTMENTS TO THE MEDICARE PARTS A/B OFFERED RATES There are two primary levers that CMS and DOH could consider to adjust the offered rates to make the comparisons to the estimated experience more favorable. The first is the implementation of the frailty factor adjustment currently used in the Program of All-Inclusive Care for the Elderly (PACE) and Fully Integrated Dual Eligibles (FIDE) Special Needs Plans (SNP) risk-adjusted capitation rates. The second is the addition of a bad debt adjustment to the offered rates similar in size and scope to the values included in other state dual demonstration rate-setting methodologies. Frailty adjustment factors The frailty factor is an adjustment to the HCC risk score methodology that adds (or subtracts) from the diagnosisbased score using the patient’s level of care needs as measured by difficulties with activities of daily living (ADL). This process was implemented for the PACE and the FIDE SNP programs. Figure 2 illustrates the 2014 frailty factors by number of ADL. These amounts are additive to the diagnosis-based HCC risk scores that are contemplated for the FIDA program. Figure 2: FIDE SNP 2014 Frailty Factors

ADLs

Additive Risk Adjustment

0

(0.156)

1-2

0.000

3-4

0.195

5-6

0.446

The number of ADL difficulties is not known for the FIDA-eligible population, but we assume that the average is greater than one, resulting in a frailty factor greater than or equal to zero. The eligible population for FIDA will be nursing home level of care, which would likely make the average numbers of ADLs at least three, resulting in a frailty factor between 0.195 and 0.446. Given the similarities of FIDA to FIDE SNP and PACE programs, the frailty factor seems to be an appropriate consideration for the demonstration.

Bad debt adjustment factors CMS has included a bad debt adjustment to the Medicare Parts A/B offered rates in other states but has not included this adjustment in the FIDA draft baseline capitation rates for the Medicare Parts A/B component. The adjustment, 1.25% in CY 2013 and 1.89% CY 2014, has been characterized as an adjustment to reflect the disproportionate share of bad debt attributable to dual eligible enrollees. Further review and discussion may be necessary to allow stakeholders to fully understand what value may be appropriate for New York. Potential factors to consider may include the level of bad debt historically in New York, the method of coordination of benefits between Medicare and Medicaid, and the levels of bad debt among dual eligible beneficiaries and non-dual eligible beneficiaries. CMS has indicated that this adjustment does not apply to the FIDA program because of the unique Medicaid coordination of benefit methodology used by DOH for inpatient and skilled nursing facility services.

New York Fully Integrated Duals Advantage (FIDA) Program: Examination of Medicare capitation rates for 2014 This report was prepared by Milliman exclusively for the use or benefit of the New York Health Plan Association for a specific and limited purpose. The report uses data from various sources, which Milliman has not audited. Any third-party recipient of this report who desires professional guidance should not rely upon this report, but should 7 engage qualified professionals for advice appropriate to its own specific needs. This report should only be reviewed in its entirety. Copyright by Milliman, Inc. December 11, 2013

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4. DEVELOPMENT OF THE 2014 FIDA MEDICARE PARTS A/B OFFERED RATE The rates offered by Medicare Parts A/B for 2014 represent a blend of the FFS rates and the Medicare Advantage rates. CMS has developed the draft capitation rates for the FIDA program using a methodology that is based on the estimated cost of the program in the absence of the demonstration. Adjustments have been applied to reduce the program costs by an explicit savings component, 1% in demonstration year 1. Each component of the offered rates is discussed in more detail below. The information related to the offered rates was obtained from the CMS and DOH report of November 8, 2013, "Fully Integrated Duals Advantage Draft Rate Report." Published FFS standardized rate For the proportion of beneficiaries who were previously enrolled in Medicare FFS, the baseline cost was calculated using the published Medicare standardized FFS county rates. These rates reflect historical costs (including certain federal administration costs) of the Medicare FFS population. The standardized FFS county rates are calculated by CMS as part of the annual Medicare Advantage rate announcement and were released in April 2013 for calendar year 2014. The standardized FFS county rates incorporate the assumption that Congress will act to offset the physician fee cuts which were a result of the sustainable growth rate (SGR) formula. The FFS standardized rates reflect a phasing out of indirect medical education (IME) payments. Update for repricing The repricing adjustment reflects the change necessary to fully adjust for the most recent hospital wage index and physician geographic practice cost index. Coding intensity offset Because of system limitations, the risk scores that will be paid reflect the dampening from the coding intensity factor. As such the FFS components of the base rates were increased by the 2014 amount of 4.91% to offset the reduction. This process effectively eliminates the coding intensity adjustment from the CY 2014 offered rates for the FFS component when risk adjustment is applied. Incorporating Medicare Advantage component For the proportion of beneficiaries previously enrolled in Medicare Advantage (MA), the baseline reflects estimated amounts that would have been factored into payments made to MA plans for these beneficiaries absent of the demonstration, including Part C rebates. Rebates were calculated based on the county benchmarks that incorporate quality bonuses. Sequestration adjustment The Budget Control Act enacted in 2011 required a 2% across-the-board cut to Medicare provider payments beginning on April 1, 2013. The rates offered by Medicare Parts A/B reflect this 2% reduction. Explicit savings target adjustment The offered rates have been reduced by 1% for CY 2014 to reflect the required savings from the demonstration as documented in the MOU between CMS and DOH. New York Fully Integrated Duals Advantage (FIDA) Program: Examination of Medicare capitation rates for 2014 This report was prepared by Milliman exclusively for the use or benefit of the New York Health Plan Association for a specific and limited purpose. The report uses data from various sources, which Milliman has not audited. Any third-party recipient of this report who desires professional guidance should not rely upon this report, but should 8 engage qualified professionals for advice appropriate to its own specific needs. This report should only be reviewed in its entirety. Copyright by Milliman, Inc. December 11, 2013

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Risk adjustment factors The base rates offered in CY 2014 were adjusted by the estimated risk scores for the FIDA-eligible population. CMS and DOH provided historical 2011 risk scores for the eligible population by delivery system (FFS and Medicare Advantage), county, and site of service (nursing facility and community). The raw 2011 risk scores included the 2011 coding intensity adjustment (3.41%). The risk scores were adjusted to remove this coding intensity factor and to apply the 2014 factor (4.91%). The following illustrates this adjustment: Adjusted Risk Score = Raw Risk Score / (1 – 3.41%) * (1 – 4.91%)

CMS periodically recalibrates the HCC risk scores used for the Medicare Advantage population to use more current data. The actual risk scores to be used for the Medicare Advantage payment rates in 2014 are a blend of 75% of the 2014 HCCs and 25% of the 2013 HCCs. The 2014 HCCs, when composited over the entire Medicare Advantage population, are 2.5% lower than the same result using the 2013 HCCs. Thus the blend being used in 2014 is approximately 1.9% lower (75% x 2.5% = 1.9%) than the composite using the 2013 HCCs over the entire Medicare Advantage population. We do not know what the effect will be on the FIDA population and therefore did not make an adjustment to the risk scores for this change.

New York Fully Integrated Duals Advantage (FIDA) Program: Examination of Medicare capitation rates for 2014 This report was prepared by Milliman exclusively for the use or benefit of the New York Health Plan Association for a specific and limited purpose. The report uses data from various sources, which Milliman has not audited. Any third-party recipient of this report who desires professional guidance should not rely upon this report, but should 9 engage qualified professionals for advice appropriate to its own specific needs. This report should only be reviewed in its entirety. Copyright by Milliman, Inc. December 11, 2013

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5. DEVELOPMENT OF THE ESTIMATED 2014 FFS MEDICARE PARTS A/B EXPERIENCE The estimated 2014 Medicare FFS experience PMPM values were derived from the data book provided by DOH for the FIDA program, with adjustments for trend, population differences, and program changes. Each of these items is discussed in more detail below. Data book base data The development of the estimated CY 2014 experience begins with the base data provided by CMS and DOH in October 2013. The data books were provided for base years 2010 and 2011, with 2011 forming the basis of this analysis. The CY 2011 data was assumed complete, meaning that additional adjustments to reflect unpaid claims were not necessary. This assumption could have significant impacts on the results contained in this analysis. The base data included FFS expenditures provided by county, service category, and population cohort. The historical Medicare Advantage encounters were not included in the data book. For purposes of this analysis, we only estimated the FFS experience because the Medicare Advantage experience was not available. Trend to CY 2014 The base data represents a historical time period that was adjusted with assumptions for medical inflation to the CY 2014 time period. A total of 36 months of trend was applied to the CY 2011 base experience at a rate of 2.0% annually. The trend assumption was estimated as a range of results with the low end approximating the implied trend rate from the April 2013 Medicare Advantage rate announcement document and the high end representing the Milliman standard Medicare Part C trends. The level of trend had a significant impact on the results presented in this report. The trend range selected is generally below long-term trend rates in the Medicare segment; however, the time period in this study is believed to have been a lower-than-typical period of trend. For each 1% annual trend assumed, the results of the comparisons will be impacted by approximately 3% because of the three-year trend period from the base data to the projection period. ESRD and hospice adjustment The base data included claims and membership for the ESRD and hospice populations. The FIDA plans will receive a different base rate for the ESRD population and, as such, the ESRD population was removed for purposes of this analysis. Members electing the Medicare hospice benefit will remain in the demonstration but will receive the Medicare Parts A/B benefit in traditional Medicare FFS. The ESRD and hospice adjustments were estimated from a review of Medicare 5% sample data for the New York dual eligible population. The ESRD adjustment is the largest of these adjustments and was estimated to be an 8% reduction in the PMPM claim cost for the FIDA-eligible population. Because of the uncertainty associated with this assumption, a range of 6% to 10% was used in the estimate of the composite range of results. Sequestration adjustment The base experience was reduced by 2% consistent with the adjustment applied in the offered capitation rates. This assumes that the health plan payments to providers will follow traditional Medicare and be reduced by the full amount of the sequestration amount. To the extent that the FIDA plans cannot contract with providers at this level, an increase to the base experience may be necessary. New York Fully Integrated Duals Advantage (FIDA) Program: Examination of Medicare capitation rates for 2014 This report was prepared by Milliman exclusively for the use or benefit of the New York Health Plan Association for a specific and limited purpose. The report uses data from various sources, which Milliman has not audited. Any third-party recipient of this report who desires professional guidance should not rely upon this report, but should 10 engage qualified professionals for advice appropriate to its own specific needs. This report should only be reviewed in its entirety. Copyright by Milliman, Inc. December 11, 2013

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APPENDIX 1

New York Fully Integrated Duals Advantage (FIDA) Program: Examination of Medicare capitation rates for 2014 This report was prepared by Milliman exclusively for the use or benefit of the New York Health Plan Association for a specific and limited purpose. The report uses data from various sources, which Milliman has not audited. Any third-party recipient of this report who desires professional guidance should not rely upon this report, but should engage qualified professionals for advice appropriate to its own specific needs. This report should only be reviewed in its entirety. Copyright by Milliman, Inc. December 11, 2013

12/11/2013 2:18 PM

New York Fully Integrated Duals Advantage (FIDA) Program Examination of Medicare A/B Capitation Rates for 2014 CY 2014 Risk Adjusted Offered Rate - $ PMPM

(a)

(b)

(c)

(d)

(e )

Including County Nassau NYC-Bronx NYC-Kings NYC-Manhattan NYC-Queens NYC-Richmond Suffolk Westchester Composite

(f)

(g)

Explicit

Risk

Final Medicare

CY 2011 Member

CY 2014 FFS

Update for

Coding

Medicare

Sequestration

Savings

Adjustment

A/B Payment

Months

Std Rate

Repricing

Intensity Offset

Advantage

Adjustment

Adjustment

Factors

Rate

104,464 289,095 603,630 293,448 331,646 57,331 106,376 91,003

$ 872.58 966.09 896.13 861.00 849.64 892.60 849.08 855.69

1,876,993

$ 887.15

0.997 0.995 0.994 0.993 0.996 0.994 0.998 0.995

1.052 1.052 1.052 1.052 1.052 1.052 1.052 1.052

0.993 0.992 1.000 1.017 0.998 1.006 0.995 0.992

0.980 0.980 0.980 0.980 0.980 0.980 0.980 0.980

0.990 0.990 0.990 0.990 0.990 0.990 0.990 0.990

2.085 1.933 2.013 1.823 1.968 2.117 2.153 1.986

$ 1,836.97 1,880.06 1,829.92 1,616.78 1,695.23 1,928.98 1,851.59 1,711.08 $ 1,779.41

Appendix 1 Milliman, Inc.

Milliman Client Report

APPENDIX 2

New York Fully Integrated Duals Advantage (FIDA) Program: Examination of Medicare capitation rates for 2014 This report was prepared by Milliman exclusively for the use or benefit of the New York Health Plan Association for a specific and limited purpose. The report uses data from various sources, which Milliman has not audited. Any third-party recipient of this report who desires professional guidance should not rely upon this report, but should engage qualified professionals for advice appropriate to its own specific needs. This report should only be reviewed in its entirety. Copyright by Milliman, Inc. December 11, 2013

12/11/2013 2:18 PM

New York Fully Integrated Duals Advantage (FIDA) Program Examination of Medicare A/B Capitation Rates for 2014 CY 2014 Estimated FFS Medicare Parts A/B Experience - $ PMPM

(a)

(b)

(c)

(d)

ESRD and County Nassau NYC-Bronx NYC-Kings NYC-Manhattan NYC-Queens NYC-Richmond Suffolk Westchester Composite

Estimated FFS

CY 2011 Member

Data Book FFS

Trend

Hospice

Sequestration

Medicare A/B

Months

Base Data

Adjustment

Adjustment

Adjustment

Experience Rate

104,464 289,095 603,630 293,448 331,646 57,331 106,376 91,003

$ 2,001.87 1,774.11 1,993.70 1,560.72 1,926.86 1,628.80 2,075.46 2,097.89

1,876,993

$ 1,879.37

1.061 1.061 1.061 1.061 1.061 1.061 1.061 1.061

Appendix 2 Milliman, Inc.

0.920 0.920 0.920 0.920 0.920 0.920 0.920 0.920

0.980 0.980 0.980 0.980 0.980 0.980 0.980 0.980

$ 1,915.57 1,697.63 1,907.75 1,493.44 1,843.79 1,558.58 1,985.99 2,007.45 $ 1,798.35