MDHHS, actuary defend Medicaid capitation process as lawmakers press for more data and transparency

Department officials and the state's contracted actuary on Monday outlined the process used to set Medicaid managed-care capitation rates and explained why the department included a $55 million adjustment in a supplemental request to close out fiscal 2024 and stabilize the current fiscal year.

Amy Eppke, senior deputy director of financial operations at the Michigan Department of Health and Human Services, told the House Appropriations Committee that capitation rates are established to ensure access to services while maintaining provider viability. "MDHHS is committed to ensuring access to care for Michigan's Medicaid enrollees," Eppke said, adding that Milliman monitors costs monthly and the state coordinates with budget offices and fiscal agencies when recommending appropriation levels.

Jeremy Cunningham, a principal and consulting actuary with Milliman, described the federal and actuarial requirements for capitation rates. "Actuarially sound capitation rates must be adequate to cover reasonable and appropriate costs," Cunningham said, and described a process in which the state, a…