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The Arizona Long Term Care System (ALTCS)

Learn about the capitation rate development process for the Arizona Long Term Care System (ALTCS), including factors considered and how reimbursement is calculated.

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The Arizona Long Term Care System (ALTCS)

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  1. The Arizona Long Term Care System (ALTCS) University of Maryland Center on Aging Medicare/Medicaid Integration Program July 8, 2004

  2. Capitation Rate Development Process • AHCCCS pays Program Contractors a monthly amount for each member for the purpose of contracting with providers to deliver ALTCS services. This amount is a “capitation rate.” • AHCCCS contracts with independent actuaries to develop capitation rates that are actuarially sound. • On an annual basis, the actuaries review various data that support rate increases or decreases. • Based on that review, capitation rates are then adjusted for each county.

  3. Items Considered in Capitation RateDevelopment • Historical Utilization of Services • Program Contractor Financial Experience • National and Local Inflation Trends (including AHCCCS FFS rate increases) • Program Changes • Percentage of members in different placement settings (nursing facilities, HCBS)

  4. Capitation Rate Components

  5. Capitation Rate Calculation Example

  6. Program Contractor to ProviderReimbursement • Program Contractors establish networks that are adequate to meet the service needs of its members. • Contracted rates are negotiated with the providers. • Capitation rate increases from AHCCCS to Program Contractors are factored into reimbursement when Program Contractors renegotiate their provider contracts.

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