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Volatility in Medicare AAPCC rates: 1990-1997
Journal article   Peer reviewed

Volatility in Medicare AAPCC rates: 1990-1997

Timothy D McBride, Joan Penrod and Keith Mueller
Health affairs (Millwood, Va.), Vol.16(5), pp.172-180
09/1997
DOI: 10.1377/hlthaff.16.5.172
PMID: 9314688

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Abstract

As Medicare beneficiary enrollment in managed care plans increases, and as Congress considers relying on capitation for achieving savings in the program, the question of finding a fair and equitable formula for determining the monthly payment to managed care plans has become increasingly salient. This DataWatch focuses on one dimension of using previous expenditures to determine annual capitation rates: the effects of historic volatility in total expenditures. Annual changes in adjusted average per capita cost (AAPCC) rates are especially dramatic in rural counties, with those not adjacent to urban areas experiencing the greatest volatility. This pattern of annual change may discourage managed care organizations from entering markets, even when the rate in any given year may appear to be favorable for accepting risk.
United States Capitation Fee Health Care Costs Humans Managed Care Programs - economics Managed Care Programs - statistics & numerical data Medicare - economics Medicare - statistics & numerical data Rural Health Services - economics

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