Committee approves Medicaid actuarial and rate‑setting contracts after questioning

The committee heard detailed explanations of three Medicaid contract items — including actuarial services and rate‑setting work — and approved the contracts after members pressed for clarity on how studies influence rates and provider payments.

Lisa Lee, commissioner for the Department for Medicaid Services, described the distinct purposes: “Milliman deals with capitation rate setting for managed care organizations; Myers and Stauffer primarily does rate setting for fee‑for‑service programs,” she said, distinguishing actuarial certification required under federal rules from accounting-based cost‑report work for hospitals and federally qualified health centers.

Steven Stack, Cabinet secretary, said some studies are required by federal law and by legislative direction and that studies can inform later budget or rate changes. Committee members asked how reports become binding on managed care organizations and whether network adequacy is factored into capitation. Lee said network adequacy is monitored by a separate external quality organization the department uses (IPRO), and that rate changes still depend on policy and budget decisions.

Senator Meredith and others asked whether the state can act on study findings and whether studies meaningfully change provider payments; Medicaid officials pointed to prior instances (a waiver rate study that led to a January 2025 fee schedule) where consultant work informed implemented rate changes.

The committee approved contract 67 following debate; members recorded a mix of votes and explanations on the record.

Next steps: agencies said they would provide more details about bid responses and methodology if requested by committee members.