August 3, Nursing Home Diversion Program Capitation Rate Development. Dear Keith:

Transcription

1 15800 Bluemound Road Suite 400 Brookfield, WI USA Tel Fax milliman.com David F. Ogden, FSA, MAAA Principal and Consulting Actuary Mr. Keith Young Health Care Program Analyst State of Florida Agency for Health Care Administration Medicaid Program Analysis 2727 Mahan Drive Mailstop 21 Tallahassee, FL Re: Nursing Home Diversion Program Capitation Rate Development Dear Keith: Thank you for the opportunity to assist the Agency for Health Care Administration (AHCA) and the Department of Elder Affairs (DOEA) with this important project. Our report summarizes the development of the September 1, 2010 August 31, 2011 capitation rates for the Nursing Home Diversion program. We look forward to discussing the report with you. Sincerely, David F. Ogden, FSA, MAAA Principal and Consulting Actuary DFO/laa cc: David Oropallo Cheryl Young Jack Shi Attachments Offices in Principal Cities Worldwide

2 Milliman Client Report State of Florida Agency for Health Care Administration and Department of Elder Affairs September 1, August 31, 2011 Capitation Rate Development for Nursing Home Diversion Health Program Prepared for: State of Florida Prepared by: Milliman, Inc. Mathieu Doucet, FSA, MAAA Actuary Dave F. Ogden, FSA, MAAA Principal and Consulting Actuary Bluemound Road Suite 400 Brookfield, WI USA Tel Fax milliman.com

3 Milliman Client Report TABLE OF CONTENTS I. EXECUTIVE SUMMARY... 1 II. NURSING HOME DIVERSION RATE METHOLOLOGY... 4 III. CMS RATE SETTING CHECKLIST ISSUES... 7 APPENDICES A Approved Inflation Factors B: Calendar Year 2008 and 2009 Encounter Experience Encounter Method C: September 1, August 31, 2011 Capitation Rates D: Comparison of September 1, August 31, 2010 and September 1, August 31, 2011 Capitation Rates E: Actuarial Certification of September 1, August 31, 2011 Capitation Rates Report07 - Nursing Home Diversion Program.docx This report assumes that the reader is familiar with the State of Florida s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to AHCA and Elder Affairs to set September 1, August 31, 2011 capitation rates for this program. It may not be appropriate for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. This material should only be reviewed in its entirety State of Florida, Agency for Health Care Administration and Department of Elder Affairs September 1, August 31, 2011 Capitation Rate Development for Nursing Home Diversion Health Program

4 Milliman Client Report I. EXECUTIVE SUMMARY This report documents the development of rates for September 1, August 31, 2011 for Florida s Medicaid Nursing Home Diversion program. The Florida Agency for Health Care Administration (AHCA) and the Department of Elder Affairs (Elder Affairs) retained Milliman to document and certify to its capitation rate development. Milliman s role is to develop the encounter data based methodology to calculate the rates, and to certify the September 1, August 31, 2011 capitation rates produced by the current rating methodology are actuarially sound to comply with CMS regulations. The approved inflation factors are displayed in Appendix A. The base period experience used in developing the September 1, August 31, 2011 capitation rates is included in Appendix B while the calculations and rates are displayed in Appendix C. Appendix D shows a comparison of the September 1, August 31, 2010 and September 1, August 31, 2011 capitation rates. Appendix E contains our actuarial certification. Section II of this report document the Nursing Home Diversion capitation rate methodology using the Nursing Home Diversion program encounter data. Section III of this report discusses issues related to the CMS rate setting checklist. NURSING HOME DIVERSION BACKGROUND The Nursing Home Diversion program is a managed care option under a 1915(c) waiver that is designed to provide community-based services to people who would qualify for Medicaid nursing home placement. The objective of the program is to provide elders community-based care to avoid nursing home placement at a cost less than Medicaid nursing home care. Individuals that meet the following criteria are eligible to receive services under the Nursing Home Diversion Waiver: > Age 65 and over > Dually eligible for Medicaid and Medicare Parts A&B. > Live in the authorized program areas > Be determined by the CARES (Comprehensive Assessment Review and Evaluation for Long-Term Care Services) unit at the Department of Elder Affairs to be at nursing home level of care and meet one or more established clinical criteria. The Nursing Home Diversion program, administered by DOEA, differs from the other HCBS waivers in that it covers both medical and LTC services under Medicaid and the services are provided by managed care organizations (MCOs), which receive a capitated rate for all covered services. There are currently 17 Medicaid MCOs participating in Diversion covering over 17,000 seniors throughout more than 35 counties. This report assumes that the reader is familiar with the State of Florida s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to AHCA and Elder Affairs to set September 1, August 31, 2011 capitation rates for this program. It may not be appropriate for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. This material should only be reviewed in its entirety State of Florida, Agency for Health Care Administration and Department of Elder Affairs September 1, August 31, 2011 Page 1 Capitation Rate Development for Nursing Home Diversion Health Program

5 Milliman Client Report SEPTEMBER 1, AUGUST 31, 2011 CAPITATIONS RATES & ACTUARIAL CERTIFICATION On a statewide basis, the capitation rates have decreased by 1.1%, varying by District from a decrease of 3.0% to a 1.9% increase. Table 1 summarizes September 1, August 31, 2011 capitation rates compared to the September 1, 2009 August 31, 2010 capitation rates. The encounter based method produces higher rates than the September 2009 August 2010 rate period. The lower rates are due to the favorable claim experience in CY The September 2009 August 2010 capitation rates were also based on Nursing Home Diversion encounter data. Table 1 Summary of Results Nursing Home Diversion Capitation Rates September 1, August 31, 2011 District September August 2010 Capitation Rates September August 2011 Capitation Rates Rate Change 1 N/A N/A N/A 2 N/A N/A N/A 3 1, , % 4 1, , % 5 1, , % 6 1, , % 7 1, , % 8 1, , % 9 1, , % 10 1, , % 11 1, , % Total 1, , % Our actuarial certification of the September 1, August 31, 2011 Nursing Home Diversion program capitation rates is included as Appendix E. The Nursing Home Diversion capitation rates are reasonable based on the following information: > The 2008 calendar year encounter data and financial statements imply medical loss ratios around 75%. > The 2009 calendar year encounter data and financial statements imply medical loss ratios around 78%. > The projected medical loss ratio from the financial statement information for the September 2010 August 2011 rate period is 85.4%. It should be emphasized that capitation rates are a projection of future costs based on a set of assumptions. Actual costs will be dependent on each contracted health plan s situation and experience. This report assumes that the reader is familiar with the State of Florida s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to AHCA and Elder Affairs to set September 1, August 31, 2011 capitation rates for this program. It may not be appropriate for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. This material should only be reviewed in its entirety State of Florida, Agency for Health Care Administration and Department of Elder Affairs September 1, August 31, 2011 Page 2 Capitation Rate Development for Nursing Home Diversion Health Program

6 Milliman Client Report NURSING HOME RISK As the Nursing Home Diversion capitation rate methodology is entirely based on encounter data, the incentive for plans to retain the nursing home risk disappears. It has been shown that Diversion enrollees admitted to a nursing home return to the Medicaid fee-for-service program shortly after admission. The decrease in capitation rates brings the rates in line with the encounter experience which has very little nursing home use. However, the plans now have even less financial incentive to make efforts to retain the enrollees after nursing home admission since the capitation rate does not include an allowance for it. AHCA and Elder Affairs should review this situation to determine if changes in program structure are necessary to provide a financial incentive to retain nursing home enrollees. DATA RELIANCE AND IMPORTANT CAVEATS We used cost and eligibility data for CY 2008 and CY 2009, inflation factors, and financial statement information to calculate the Nursing Home Diversion capitation rates shown in this report. We relied on Elder Affairs for proper manipulation of its encounter data and other information used in developing the capitation rates discussed in this report. If the underlying data used is inadequate or incomplete, the results will be likewise inadequate or incomplete. Differences between the capitation rates and actual experience will depend on the extent to which future experience conforms to the assumptions made in the capitation rate calculations. It is certain that actual experience will not conform exactly to the assumptions used. Actual amounts will differ from projected amounts to the extent that actual experience is better or worse than expected. Our report is intended for the internal use of AHCA and Elder Affairs to develop September 1, August 31, 2011 Nursing Home Diversion capitation rates. It should not be distributed to other parties without Milliman s prior written consent. It may not be appropriate for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. It should only be reviewed in its entirety. The results of this report are technical in nature and are dependent upon specific assumptions and methods. No party should rely on these results without a thorough understanding of those assumptions and methods. Such an understanding may require consultation with qualified professionals. The terms of Milliman s contract with AHCA signed on February 5, 2008 apply to this report and its use. This report assumes that the reader is familiar with the State of Florida s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to AHCA and Elder Affairs to set September 1, August 31, 2011 capitation rates for this program. It may not be appropriate for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. This material should only be reviewed in its entirety State of Florida, Agency for Health Care Administration and Department of Elder Affairs September 1, August 31, 2011 Page 3 Capitation Rate Development for Nursing Home Diversion Health Program

7 Milliman Client Report II. NURSING HOME DIVERSION RATE METHODOLOGY This section of our report describes the September 1, August 31, 2011 Nursing Home Diversion capitation rate determination using the encounter methodology. The encounter methodology can be outlined in the following steps: 1. Calculate estimated statewide September 1, August 31, 2011 encounter costs for the Nursing Home Diversion program. 2. Calculate a Statewide Assessment Rating Factor (ARF). 3. Divide the statewide September 1, August 31, 2011 cost per eligible by the statewide ARF to obtain a normalized rate. 4. Adjust for incurred but not reported (IBNR) claims. 5. Adjust for administrative expenses using a target loss ratio. 6. Multiply the normalized rate by the ARF for the capitated plans in that district. Each of the above steps is described in detail below. STEP 1: CALCULATE ESTIMATED STATEWIDE SEPTEMBER 1, AUGUST 31, 2011 ENCOUNTER COSTS In this step the encounter data experience for CY 2008 and CY 2009 is summarized by eligibility category and covered service category. The Step 1 procedure is summarized below: 1. Summarize the CY 2008 encounter data by service category for all covered service categories. 2. Trend the CY 2008 encounter data to CY 2009 using inflation factors from SFY 0708 to SFY 0809 approved by the Florida Estimating Conference for the covered services. 3. Summarize the CY 2009 encounter data by service category for all covered service categories. 4. Calculate the composite CY 2009 PEPM costs by service category. The composite is calculated as the weighted average of projected CY 2008 costs and actual CY 2009 costs. 5. Trend the composite CY 2009 costs to September 1, August 31, 2011 using the SFY 0809 to September 1, August 31, 2011 inflation factors provided by the Agency for Health Care Administration (AHCA). The trend factors are established by the Florida Estimating Conference to reflect anticipated utilization and allowed charge trend and are used for budgeting as well as rate setting. Milliman reviewed the trend factors for reasonableness. We increased the trend factor for waiver services to 2.5% annually for a more reasonable trend. The inflation factors are shown in Appendix A. The encounter data showed a 3% decrease from CY 2008 to CY 2009 after normalizing to a 1.0 ARF for each year, while prior years showed a 2% to 3% annual increase. This report assumes that the reader is familiar with the State of Florida s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to AHCA and Elder Affairs to set September 1, August 31, 2011 capitation rates for this program. It may not be appropriate for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. This material should only be reviewed in its entirety State of Florida, Agency for Health Care Administration and Department of Elder Affairs September 1, August 31, 2011 Page 4 Capitation Rate Development for Nursing Home Diversion Health Program

8 Milliman Client Report Appendix B shows trended values for the State in aggregate. STEP 2: CALCULATE A STATEWIDE ARF This step uses Assessment Rating Factor information to match the encounter data period. Blended ARFs are calculated as a weighted average of plans across district and county for CY 2008 and CY 2009, separately. A statewide ARF is then calculated by weighting the plan specific ARF by member months. STEP 3: NORMALIZE BASE RATE TO ARF This step adjusts trended historical costs for health status by dividing the Statewide ARF into service categories trended payments. Appendix B details this calculation. STEP 4: ADJUST FOR IBNR We adjusted the estimated September 1, August 31, 2011 encounter costs by service category to reflect Incurred But Not Reported (IBNR) Claims. We used a adjustment factor for CY 2008 and a adjustment factor for CY 2009 encounter data to account for IBNR. We reviewed the information included in the Report 4 of the Nursing Home Diversion financial statements and developed adjustment factors by quarter corresponding to the run out period for each calendar year used. Several plans did not populate the Report 4 correctly and included incurred claims without showing the outstanding liability portion. Other plans reporting of outstanding claims liability were inconsistent and appeared unreasonable based on typical claims payment patterns. The data used to develop the IBNR factors represent about 30% of the total Nursing Home Diversion enrollment. However, we believe that the volume of data used is sufficient to develop IBNR factors. Appendix B details this calculation. STEP 5: ADJUST FOR ADMINISTRATIVE EXPENSES This step adjusts trended historical costs for administrative expenses using a target loss ratio of 88%. We used an allowance for administration and profit of 12% of revenue. We believe that this assumption will allow plans to achieve a 2% or greater profit margin as required by the Office of Insurance Regulation in order for a health plan to avoid the requirement of filing a corrective action plan. The 2009 financial statements for plans with at least 1,000 member months during the reporting period showed an average administrative expense of $ PMPM consistent with the reported $ in the encounter data. Appendix B details this calculation. This report assumes that the reader is familiar with the State of Florida s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to AHCA and Elder Affairs to set September 1, August 31, 2011 capitation rates for this program. It may not be appropriate for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. This material should only be reviewed in its entirety State of Florida, Agency for Health Care Administration and Department of Elder Affairs September 1, August 31, 2011 Page 5 Capitation Rate Development for Nursing Home Diversion Health Program

9 Milliman Client Report STEP 6: MULTIPLY BY CAPITATED PLAN ARF Elder Affairs calculated an ARF for each plan in a specific county using the enrollment in the capitated plans. For plans with low or no enrollment, a blending schedule is used to determine to which extent the plan / county specific ARF is credible. For plans with less than 51 enrollees in a county, the calculated ARF is blended with the District (PSA) specific ARF based on May 2009 Nursing Home Diversion enrollment. Table 2 below shows the blending schedule and Table 3 shows the PSA specific ARFs Table 2 Nursing Home Diversion ARF Blending by Specific Plan Size Blending Percentage Plan Enrollment Plan ARF Enrolled PSA ARF % 100% % 75% % 50% % 25% % 0% Table 3 Nursing Home Diversion PSA Specific ARFs PSA Assessment Rating Factor (ARF) Statewide The blending schedule was developed after reviewing the standard deviation of the ARF by PSA and plan. Appendix C details this calculation. This report assumes that the reader is familiar with the State of Florida s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to AHCA and Elder Affairs to set September 1, August 31, 2011 capitation rates for this program. It may not be appropriate for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. This material should only be reviewed in its entirety State of Florida, Agency for Health Care Administration and Department of Elder Affairs September 1, August 31, 2011 Page 6 Capitation Rate Development for Nursing Home Diversion Health Program

10 Milliman Client Report III. CMS RATE SETTING CHECKLIST ISSUES This section of the report lists each item in the CMS checklist and either discusses how AHCA and Elder Affairs address each issue or directs the reader to other parts of this report. CMS uses the rate setting checklist to review and approve a state s Medicaid capitation rates. AA.1.0 Overview of rate setting methodology Please refer to Section II of this report. AA.1.1 Actuarial certification Please refer to Appendix E for our actuarial certification of the September 1, August 31, 2011 capitation rates. Also refer to the discussion of the justification for rate certification in Sections I and II of this report. AA.1.2 Projection of expenditures Based on May 2010 enrollment levels, we expect the Nursing Home Diversion program will realize a statewide 1.1% rate decrease versus September 1, 2009 August 31, 2010 Nursing Home Diversion capitation rates. Rate changes vary by District. AA.1.3 Procurement, prior approval, and rate setting Elder Affairs develops state set rates. Please refer to Sections II of this report for details. Note there is no item AA.1.4 in the checklist AA.1.5 Risk contracts The Nursing Home Diversion program meets the criteria of a risk contract. AA.1.6 Limit on payment to other providers It is our understanding no payment is made to a provider other than the Nursing Home Diversion plan for services available under the contract. AA.1.7 Rate modifications The September 1, August 31, 2011 rates documented in this report are the initial capitation rates for the September 1, August 31, 2011 Nursing Home Diversion contracts. AA.2.0 Base year utilization and cost data The base utilization and cost data for the Nursing Home Diversion rates is CY 2008 and CY 2009 encounter data for the Nursing Home Diversion population. It is our understanding that only State Plan services that are covered under the Nursing Home Diversion contract have been included in the rate development. This report assumes that the reader is familiar with the State of Florida s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to AHCA and Elder Affairs to set September 1, August 31, 2011 capitation rates for this program. It may not be appropriate for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. This material should only be reviewed in its entirety State of Florida, Agency for Health Care Administration and Department of Elder Affairs September 1, August 31, 2011 Page 7 Capitation Rate Development for Nursing Home Diversion Health Program

11 Milliman Client Report AA.2.1 Medicaid eligibles under the contract It is our understanding that data for FFS populations not eligible to enroll in the Nursing Home Diversion program has been excluded from the base data since only encounter data is used in the rate setting process. AA.2.2 Dual eligibles It is our understanding dual eligibles have been handled appropriately. AA.2.3 Spend down It is our understanding that the spend down population is excluded. AA.2.4 State Plan services only The base utilization and cost data is CY 2008 and CY 2009 encounter data and includes only State Plan services. AA.2.5 Services that may be covered by a capitated entity out of contract savings Services that may be covered by a capitated entity out of contract savings are not included in the data used to develop the September 1, August 31, 2011 capitation rates. AA.3.0 Adjustments to base year data All adjustments to the base year data are discussed in Section II and Appendices B-C of this report. In addition, each item in the checklist is addressed in items AA.3.1 AA.3.14 below. AA.3.1 Benefit differences It is our understanding that the base data used to calculate the capitation rates only includes services covered under the managed care contracts. AA.3.2 Administrative cost allowance calculations Nursing Home Diversion administrative costs are considered directly in the encounter data based method by the application of a loss ratio. AA.3.3 Special population adjustments The FFS and encounter base data used to calculate the capitation rates is consistent with the managed care population. No special population adjustment was necessary. AA.3.4 Eligibility adjustments We believe the base data eligibility is representative of managed care enrollment since encounter data is used. This report assumes that the reader is familiar with the State of Florida s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to AHCA and Elder Affairs to set September 1, August 31, 2011 capitation rates for this program. It may not be appropriate for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. This material should only be reviewed in its entirety State of Florida, Agency for Health Care Administration and Department of Elder Affairs September 1, August 31, 2011 Page 8 Capitation Rate Development for Nursing Home Diversion Health Program

12 Milliman Client Report AA.3.5 DSH payments DSH payments are not included in the capitation rates. AA.3.6 Third party liability (TPL) The managed care organizations are responsible for the collection of any TPL recoveries. AA.3.7 Copayments, coinsurance, and deductibles in capitated rates It is our understanding the base data does not include cost sharing that is not part of the managed care contract. No adjustment was necessary. AA.3.8 Graduate medical education (GME) It is our understanding the base data does not include GME payments that are not part of the managed care contract. No adjustment was necessary. AA.3.9 FQHC and RHC reimbursement No adjustment was necessary for FQHC and RHC reimbursement. AA.3.10 Medical cost trend inflation AHCA and Elder Affairs are required to use the inflation factors approved by the Florida Estimating Conference. We performed an independent assessment of the reasonability of the approved inflation factors. We made some adjustments to the inflation factors so they are reasonable when compared to past Florida FFS trends and expected trends in the future based on budgeted program changes (e.g., fee schedule changes). The inflation factors are also in line with aggregate Medicaid trends we have seen in other states. We reviewed the SFY 0809 to September 1, August 31, 2011 inflation factors approved by the Florida Estimating Conference in detail. We are comfortable that the inflation factors as adjusted represent the expected change in per capita cost between SFY 0809 and September 1, August 31, AA.3.11 Utilization adjustments Utilization trend is included in AA AA.3.12 Utilization and cost assumptions An Assessment Rating Factor (ARF) is used to risk adjust the rates for each plan in a specific county and is discussed in AA.5.3. We are not aware of any other information that indicates a material difference exists between the relative risk profiles of the two populations other than that reflected by the ARF. This is an issue that may merit additional study in the future as more detailed data becomes available. This report assumes that the reader is familiar with the State of Florida s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to AHCA and Elder Affairs to set September 1, August 31, 2011 capitation rates for this program. It may not be appropriate for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. This material should only be reviewed in its entirety State of Florida, Agency for Health Care Administration and Department of Elder Affairs September 1, August 31, 2011 Page 9 Capitation Rate Development for Nursing Home Diversion Health Program

13 Milliman Client Report AA.3.13 Post-eligibility treatment of income (PETI) Not applicable AA.3.14 Incomplete data adjustment The capitation rates include an adjustment to reflect IBNR claims for the encounter data. AA.4.0 Establish rate category groupings Please refer to Section II of this report. AA.4.1 Age Age is not used as a rating variable. AA.4.2 Gender Gender is not used as a rating variable. AA.4.3 Locality / Region Please refer to Section II of this report. AA.4.4 Eligibility categories Please refer to Section II of this report. AA.5.0 Data Smoothing We did not perform any data smoothing. AA.5.1 Special populations and assessment of the data for distortions We did not identify any material distortions caused by special populations. AA.5.2 Cost-neutral data smoothing adjustment We did not perform any data smoothing. AA.5.3 Risk adjustment Elder Affairs uses Assessment Rating Factors (ARF) to risk adjust the population. These factors are based on recipients required level of assistance in activities of daily living (i.e., ADLs), instrumental activities of daily living (IADLs), the presence of specific chronic conditions (diabetes, etc.), and level of cognitive impairment. Section II of this report explains how the ARF are applied to adjust the rates of the participating health plans. This report assumes that the reader is familiar with the State of Florida s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to AHCA and Elder Affairs to set September 1, August 31, 2011 capitation rates for this program. It may not be appropriate for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. This material should only be reviewed in its entirety State of Florida, Agency for Health Care Administration and Department of Elder Affairs September 1, August 31, 2011 Page 10 Capitation Rate Development for Nursing Home Diversion Health Program

14 Milliman Client Report AA.6.0 Stop loss, reinsurance, or risk sharing arrangements None AA.6.1 Commercial reinsurance Elder Affairs does not require entities to purchase commercial reinsurance. AA.6.2 Simple stop loss program None AA.6.3 Risk corridor program None AA.7.0 Incentive arrangements We are not aware of any incentive arrangements in the Nursing Home Diversion program. This report assumes that the reader is familiar with the State of Florida s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to AHCA and Elder Affairs to set September 1, August 31, 2011 capitation rates for this program. It may not be appropriate for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. This material should only be reviewed in its entirety State of Florida, Agency for Health Care Administration and Department of Elder Affairs September 1, August 31, 2011 Page 11 Capitation Rate Development for Nursing Home Diversion Health Program

15 Milliman Client Report Appendix A APPENDIX A Approved Inflation Factors This report assumes that the reader is familiar with the State of Florida s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to AHCA and Elder Affairs to set September 1, August 31, 2011 capitation rates for this program. It may not be appropriate for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. This material should only be reviewed in its entirety State of Florida, Agency for Health Care Administration and Department of Elder Affairs September 1, August 31, 2011 Capitation Rate Development for Nursing Home Diversion Health Program

16 Appendix A Florida Agency for Health Care Administration and Department of Elder Affairs Nursing Home Diversion Calculation for September 1, August 31, 2011 Rates Approved Inflation Factors Bucket Service Category Inflation Factors FY FY0809 Inflation Factors FY0809- Sept10-Aug11 01 HOSPITAL INPATIENT SERVICES HOSPITAL INSURANCE BENEFITS HOSPITAL OUTPATIENT SERVICES HOSPITAL OUTPATIENT XOVER SKILLED NURSING XOVER SKILLED NURSING CARE INTERMEDIATE CARE PHYSICIAN SERVICES PHYSICIAN XOVER PRESCRIBED MEDICINE OTHER LAB AND X-RAY LAB AND X-RAY XOVER TRANSPORTATION XOVER FAMILY PLANNING SERVICE HOME HEALTH SERVICES HOME HEALTH XOVER ADULT DENTAL SERVICES ADULT VISUAL SERVICES ADULT HEARING SERVICES NURSE PRACTITIONER SERVICES OTHER XOVER PRACTITIONER HOSPICE HCB-AGING RURAL HEALTH CLINICS FEDERALLY QUALIFIED CENTER CLINIC SERVICES ADULT CONGREGATE LIVING PHYSICIAN ASSISTANT SERVICES DIALYSIS CENTER ASSISTIVE CARE SERVICES /3/2010 Milliman Page 1

17 Milliman Client Report Appendix B APPENDIX B Calendar Year 2008 and 2009 Encounter Data Statewide Base Rate Development This report assumes that the reader is familiar with the State of Florida s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to AHCA and Elder Affairs to set September 1, August 31, 2011 capitation rates for this program. It may not be appropriate for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. This material should only be reviewed in its entirety State of Florida, Agency for Health Care Administration and Department of Elder Affairs September 1, August 31, 2011 Capitation Rate Development for Nursing Home Diversion Health Program

18 Appendix B Florida Agency for Health Care Administration and Department of Elder Affairs Nursing Home Diversion Fee-For-Service Equivalent Calculation for September 1, August 31, 2011 Rates Statewide Base Rate Development - Encounter Method Service Category Case Months Claims Experience CY2008 Trended Amount Base PEPM Composite ARF IBNR & Underreporting Adjustment Target Loss Ratio Final Adjusted PMPM Dental Services 130,494 $402,139 $ % $3.19 Dialysis Center 130, , % 2.37 Emergency Room Services 130, , % 3.16 Hearing Services Including Hearing Aids 130, , % 2.76 Inpatient Hospital Services 130,494 5,526, % Independent Laboratory Or Portable X-Ray Services 130,494 21, % 0.17 Pharmaceuticals 130, , % 3.88 Physician Services 130, , % 4.46 Outpatient Hospital Services 130, , % 3.96 Skilled Nursing Facility Services- Rehabilitation 130, , % 7.56 Visual Services Including Eyeglasses 130,494 2,325, % Other Acute Service Not Listed 130,494 41, % 0.33 Adult Day Health Services 130,494 5,065, % Assisted Living Services 130,494 92,747, % Attendant Care Services 130,494 6,403, % Case Management (Internal) 130,494 19,045, % Chore Services 130,494 88, % 0.70 Consumable Medical Supplies 130,494 3,192, % Durable Medical Equipment 130, , % 2.64 Home Delivered Meals 130,494 2,747, % Homemaker Services 130,494 5,881, % Nursing Facility Services- Long-Term 130,494 10,808, % Personal Care Services 130,494 10,425, % Respite Care - In Home 130,494 3,675, % Respite Care - Facility-Based 130, , % 0.92 Skilled Nursing 130, , % 3.30 Transportation Services 130, , % 1.26 Other LTC Service Not Listed 130,494 3,705, % Statewide 130,494 $176,686,483 $1, , /3/2010 Milliman Page 1

19 Appendix B Florida Agency for Health Care Administration and Department of Elder Affairs Nursing Home Diversion Fee-For-Service Equivalent Calculation for September 1, August 31, 2011 Rates Statewide Base Rate Development - Encounter Method Service Category Case Months Claims Experience CY2009 Total Dollars Base PEPM Composite ARF IBNR & Underreporting Adjustment Target Loss Ratio Final Adjusted PMPM Dental Services 173,651 $456,527 $ % $2.74 Dialysis Center 173, , % 2.22 Emergency Room Services 173, , % 2.95 Hearing Services Including Hearing Aids 173, , % 4.26 Inpatient Hospital Services 173,651 6,766, % Independent Laboratory Or Portable X-Ray Services 173,651 11, % 0.07 Pharmaceuticals 173, , % 3.28 Physician Services 173, , % 3.92 Outpatient Hospital Services 173, , % 3.69 Skilled Nursing Facility Services- Rehabilitation 173, , % 5.02 Visual Services Including Eyeglasses 173, , % 0.90 Other Acute Service Not Listed 173,651 75, % 0.45 Adult Day Health Services 173,651 7,093, % Assisted Living Services 173, ,969, % Attendant Care Services 173,651 5,607, % Case Management (Internal) 173,651 22,169, % Chore Services 173,651 92, % 0.55 Consumable Medical Supplies 173,651 3,905, % Durable Medical Equipment 173, , % 3.08 Home Delivered Meals 173,651 3,577, % Homemaker Services 173,651 7,583, % Nursing Facility Services- Long-Term 173,651 14,199, % Personal Care Services 173,651 16,316, % Respite Care - In Home 173,651 5,734, % Respite Care - Facility-Based 173, , % 0.90 Skilled Nursing 173,651 60, % 0.36 Transportation Services 173, , % 1.25 Other LTC Service Not Listed 173,651 5,289, % Statewide 173,651 $221,153,070 $1, , /3/2010 Milliman Page 2

20 Appendix B Florida Agency for Health Care Administration and Department of Elder Affairs Nursing Home Diversion Fee-For-Service Equivalent Calculation for September 1, August 31, 2011 Rates Statewide Base Rate Development - Encounter Method Service Category Composite Claims Experience CY2008 & CY2009 Case Months Total Dollars Base PEPM Composite ARF IBNR & Underreporting Adjustment Target Loss Ratio Final Adjusted PMPM Dental Services 304, ,666 $ % $2.93 Dialysis Center 304, ,379 $ % 2.28 Emergency Room Services 304, ,203 $ % 3.04 Hearing Services Including Hearing Aids 304,145 1,058,640 $ % 3.62 Inpatient Hospital Services 304,145 12,292,775 $ % Independent Laboratory Or Portable X-Ray Services 304,145 33,017 $ % 0.11 Pharmaceuticals 304,145 1,036,654 $ % 3.54 Physician Services 304,145 1,216,676 $ % 4.15 Outpatient Hospital Services 304,145 1,115,456 $ % 3.81 Skilled Nursing Facility Services- Rehabilitation 304,145 1,790,301 $ % 6.11 Visual Services Including Eyeglasses 304,145 2,476,219 $ % 8.42 Other Acute Service Not Listed 304, ,803 $ % 0.40 Adult Day Health Services 304,145 12,159,312 $ % Assisted Living Services 304, ,716,755 $ % Attendant Care Services 304,145 12,011,520 $ % Case Management (Internal) 304,145 41,215,328 $ % Chore Services 304, ,624 $ % 0.62 Consumable Medical Supplies 304,145 7,098,411 $ % Durable Medical Equipment 304, ,422 $ % 2.89 Home Delivered Meals 304,145 6,325,066 $ % Homemaker Services 304,145 13,465,075 $ % Nursing Facility Services- Long-Term 304,145 25,008,221 $ % Personal Care Services 304,145 26,741,551 $ % Respite Care - In Home 304,145 9,410,249 $ % Respite Care - Facility-Based 304, ,035 $ % 0.91 Skilled Nursing 304, ,267 $ % 1.62 Transportation Services 304, ,241 $ % 1.25 Other LTC Service Not Listed 304,145 8,995,689 $ % Statewide 304, ,839,554 $1, , /3/2010 Milliman Page 3

21 Milliman Client Report Appendix C APPENDIX C September 1, August 31, 2011 Capitation Rates This report assumes that the reader is familiar with the State of Florida s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to AHCA and Elder Affairs to set September 1, August 31, 2011 capitation rates for this program. It may not be appropriate for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. This material should only be reviewed in its entirety State of Florida, Agency for Health Care Administration and Department of Elder Affairs September 1, August 31, 2011 Capitation Rate Development for Nursing Home Diversion Health Program

22 Appendix C Florida Agency for Health Care Administration and Department of Elder Affairs Nursing Home Diversion Calculation for September 1, August 31, 2011 Rates Plan Rate Development - Blended Method Number Name May 2010 Enrollment Plan ARF District ARF Blended ARF Statewide Base Rate - Encounter Method Encounter Method ARF Adjusted Base Rate Provider Name PSA SUNRISE HOME HEALTH CARE 13 Dade , , AMERIGROUP 50 Palm Beach , , AMERIGROUP 43 Martin , , AMERIGROUP 06 Broward , , AMERIGROUP 13 Dade , , AMERIGROUP 52 Pinellas , , AMERIGROUP 29 Hillsborough , , AMERIGROUP 51 Pasco , , AMERIGROUP 53 Polk , , AMERIGROUP 41 Manatee , , AMERIGROUP 36 Lee , , AMERIGROUP 48 Orange , , AMERIGROUP 56 St. Lucie , , AMERIGROUP 49 Osceola , , AMERIGROUP 05 Brevard , , AMERIGROUP 59 Seminole , , AMERIGROUP 31 Indian River , , AMERIGROUP 09 Citrus , , AMERIGROUP 35 Lake , , AMERIGROUP 27 Hernando , , AMERIGROUP 42 Marion , , AMERIGROUP 11 Collier , , AMERIGROUP 08 Charlotte , , AMERIGROUP 58 Sarasota , , AMERIGROUP 16 Duval , , AMERIGROUP 55 St. Johns 4 - N/A , , AMERIGROUP 64 Volusia , , AMERICAN ELDERCARE, INC 50 Palm Beach , , AMERICAN ELDERCARE, INC 48 Orange , , AMERICAN ELDERCARE, INC 49 Osceola , , AMERICAN ELDERCARE, INC 59 Seminole , , AMERICAN ELDERCARE, INC 29 Hillsborough , , AMERICAN ELDERCARE, INC 52 Pinellas , , AMERICAN ELDERCARE, INC 05 Brevard , , AMERICAN ELDERCARE, INC 06 Broward , , AMERICAN ELDERCARE, INC 13 Dade , , AMERICAN ELDERCARE, INC 16 Duval , , AMERICAN ELDERCARE, INC 51 Pasco , , AMERICAN ELDERCARE, INC 41 Manatee , , AMERICAN ELDERCARE, INC 58 Sarasota , , AMERICAN ELDERCARE, INC 64 Volusia , , /3/2010 Milliman Page 1

23 Appendix C Florida Agency for Health Care Administration and Department of Elder Affairs Nursing Home Diversion Calculation for September 1, August 31, 2011 Rates Plan Rate Development - Blended Method Provider Name Number Name PSA May 2010 Enrollment Plan ARF District ARF Blended ARF Statewide Base Rate - Encounter Method Encounter Method ARF Adjusted Base Rate AMERICAN ELDERCARE, INC 36 Lee , , AMERICAN ELDERCARE, INC 08 Charlotte , , AMERICAN ELDERCARE, INC 31 Indian River , , AMERICAN ELDERCARE, INC 35 Lake , , AMERICAN ELDERCARE, INC 53 Polk , , AMERICAN ELDERCARE, INC 55 St. Johns , , AMERICAN ELDERCARE, INC 56 St. Lucie , , AMERICAN ELDERCARE, INC 43 Martin , , AMERICAN ELDERCARE, INC 18 Flagler , , AMERICAN ELDERCARE, INC 01 Alachua , , AMERICAN ELDERCARE, INC 10 Clay , , AMERICAN ELDERCARE, INC 28 Highlands , , AMERICAN ELDERCARE, INC 42 Marion , , AMERICAN ELDERCARE, INC 09 Citrus 3 - N/A , , AMERICAN ELDERCARE, INC 27 Hernando , , AMERICAN ELDERCARE, INC 45 Nassau , , AMERICAN ELDERCARE, INC 46 Okaloosa 1 - N/A , , AMERICAN ELDERCARE, INC 60 Sumter 3 - N/A , , AMERICAN ELDERCARE, INC 66 Walton 1 - N/A , , AMERICAN ELDERCARE, INC 17 Escambia 1 - N/A , , AMERICAN ELDERCARE, INC 57 Santa Rosa 1 - N/A , , PACE - PROJECT INDEPENDENCE AT HOME 6 Broward N/A , , PROJECT INDEPENDENCE AT HOME 13 Dade , , VISTA HEALTH PLAN 50 Palm Beach , , VISTA HEALTH PLAN 06 Broward , , VISTA HEALTH PLAN 13 Dade , , UNITED HOME CARE SOLUTIONS PROGRAM 13 Dade , , CITRUS 29 Hillsborough , , CITRUS 52 Pinellas , , CITRUS 51 Pasco , , CITRUS 53 Polk , , CITRUS 06 Broward , , CITRUS 13 Dade , , CITRUS 50 Palm Beach , , CITRUS 27 Hernando , , CITRUS 41 Manatee , , CITRUS 58 Sarasota , , CITRUS 09 Citrus , , CITRUS 42 Marion , , CITRUS 01 Alachua , , CITRUS 48 Orange , , /3/2010 Milliman Page 2

24 Appendix C Florida Agency for Health Care Administration and Department of Elder Affairs Nursing Home Diversion Calculation for September 1, August 31, 2011 Rates Plan Rate Development - Blended Method Provider Name Number Name PSA May 2010 Enrollment Plan ARF District ARF Blended ARF Statewide Base Rate - Encounter Method Encounter Method ARF Adjusted Base Rate CITRUS 16 Duval , , CITRUS 49 Osceola , , CITRUS 64 Volusia , , CITRUS 59 Seminole , , CITRUS 05 Brevard , , CITRUS 35 Lake , , HOPE LIFE CARE 36 Lee , , HOPE LIFE CARE 08 Charlotte , , HOPE LIFE CARE 11 Collier , , HOPE LIFE CARE 26 Hendry , , HOPE LIFE CARE 14 DeSoto 8 - N/A , , LITTLE HAVANA 13 Dade 11 1, , , LITTLE HAVANA 06 Broward , , LITTLE HAVANA 50 Palm Beach , , UNIVERSAL HEALTH CARE 41 Manatee , , UNIVERSAL HEALTH CARE 27 Hernando , , UNIVERSAL HEALTH CARE 58 Sarasota , , UNIVERSAL HEALTH CARE 51 Pasco , , UNIVERSAL HEALTH CARE 52 Pinellas , , UNIVERSAL HEALTH CARE 53 Polk , , UNIVERSAL HEALTH CARE 29 Hillsborough , , UNIVERSAL HEALTH CARE 05 Brevard , , UNIVERSAL HEALTH CARE 08 Charlotte , , UNIVERSAL HEALTH CARE 59 Seminole , , UNIVERSAL HEALTH CARE 48 Orange , , UNIVERSAL HEALTH CARE 06 Broward , , UNIVERSAL HEALTH CARE 13 Dade , , UNIVERSAL HEALTH CARE 50 Palm Beach , , UNIVERSAL HEALTH CARE 49 Osceola , , UNIVERSAL HEALTH CARE 36 Lee , , UNIVERSAL HEALTH CARE 11 Collier 8 - N/A , , UNIVERSAL HEALTH CARE 35 Lake , , UNIVERSAL HEALTH CARE 10 Clay , , UNIVERSAL HEALTH CARE 9 Citrus 3 - N/A , , UNIVERSAL HEALTH CARE 42 Marion , , NEIGHBORLY CARE NETWORK 52 Pinellas , , NEIGHBORLY CARE NETWORK 41 Manatee , , NEIGHBORLY CARE NETWORK 51 Pasco , , NEIGHBORLY CARE NETWORK 06 Broward , , NEIGHBORLY CARE NETWORK 13 Dade , , NEIGHBORLY CARE NETWORK 31 Indian River , , /3/2010 Milliman Page 3

25 Appendix C Florida Agency for Health Care Administration and Department of Elder Affairs Nursing Home Diversion Calculation for September 1, August 31, 2011 Rates Plan Rate Development - Blended Method Provider Name Number Name PSA May 2010 Enrollment Plan ARF District ARF Blended ARF Statewide Base Rate - Encounter Method Encounter Method ARF Adjusted Base Rate NEIGHBORLY CARE NETWORK 43 Martin 9 - N/A , , NEIGHBORLY CARE NETWORK 50 Palm Beach , , NEIGHBORLY CARE NETWORK 56 St. Lucie , , NEIGHBORLY CARE NETWORK 29 Hillsborough , , NEIGHBORLY CARE NETWORK 58 Sarasota , , NEIGHBORLY CARE NETWORK 48 Orange , , NEIGHBORLY CARE NETWORK 05 Brevard , , NEIGHBORLY CARE NETWORK 27 Hernando , , NEIGHBORLY CARE NETWORK 53 Polk , , NEIGHBORLY CARE NETWORK 09 Citrus , , NEIGHBORLY CARE NETWORK 49 Osceola 7 - N/A , , NEIGHBORLY CARE NETWORK 59 Seminole , , URBAN JACKSONVILLE 16 Duval , , URBAN JACKSONVILLE 55 St. Johns , , URBAN JACKSONVILLE 10 Clay , , FLORIDA COMFORT CHOICE 06 Broward , , FLORIDA COMFORT CHOICE 13 Dade , , FLORIDA COMFORT CHOICE 50 Palm Beach , , FLORIDA COMFORT CHOICE 16 Duval , , FLORIDA COMFORT CHOICE 18 Flagler 4 - N/A , , FLORIDA COMFORT CHOICE 45 Nassau 4 - N/A , , FLORIDA COMFORT CHOICE 55 St. Johns 4 - N/A , , FLORIDA COMFORT CHOICE 64 Volusia , , FLORIDA COMFORT CHOICE 52 Pinellas , , FLORIDA COMFORT CHOICE 51 Pasco , , FLORIDA COMFORT CHOICE 29 Hillsborough , , FLORIDA COMFORT CHOICE 53 Polk , , FLORIDA COMFORT CHOICE 41 Manatee 6 - N/A , , FLORIDA COMFORT CHOICE 48 Orange , , FLORIDA COMFORT CHOICE 49 Osceola , , FLORIDA COMFORT CHOICE 59 Seminole 7 - N/A , , FLORIDA COMFORT CHOICE 58 Sarasota 8 - N/A , , YOURCARE BREVARD 05 Brevard , , HUMANA SENIORS CHOICE 31 Indian River , , HUMANA SENIORS CHOICE 05 Brevard , , HUMANA SENIORS CHOICE 47 Okeechobee 9 - N/A , , HUMANA SENIORS CHOICE 56 St. Lucie , , HUMANA SENIORS CHOICE 43 Martin , , HUMANA SENIORS CHOICE 50 Palm Beach , , HUMANA SENIORS CHOICE 06 Broward , , EVERCARE HEALTH AND HOME CONNECTION 48 Orange , , /3/2010 Milliman Page 4

26 Appendix C Florida Agency for Health Care Administration and Department of Elder Affairs Nursing Home Diversion Calculation for September 1, August 31, 2011 Rates Plan Rate Development - Blended Method Provider Name Number Name PSA May 2010 Enrollment Plan ARF District ARF Blended ARF Statewide Base Rate - Encounter Method Encounter Method ARF Adjusted Base Rate EVERCARE HEALTH AND HOME CONNECTION 49 Osceola , , EVERCARE HEALTH AND HOME CONNECTION 59 Seminole , , EVERCARE HEALTH AND HOME CONNECTION 05 Brevard , , EVERCARE HEALTH AND HOME CONNECTION 29 Hillsborough , , EVERCARE HEALTH AND HOME CONNECTION 51 Pasco , , EVERCARE HEALTH AND HOME CONNECTION 52 Pinellas , , EVERCARE HEALTH AND HOME CONNECTION 64 Volusia , , EVERCARE HEALTH AND HOME CONNECTION 06 Broward , , EVERCARE HEALTH AND HOME CONNECTION 13 Dade , , EVERCARE HEALTH AND HOME CONNECTION 50 Palm Beach , , EVERCARE HEALTH AND HOME CONNECTION 53 Polk , , EVERCARE HEALTH AND HOME CONNECTION 41 Manatee , , EVERCARE HEALTH AND HOME CONNECTION 35 Lake , , EVERCARE HEALTH AND HOME CONNECTION 16 Duval , , EVERCARE HEALTH AND HOME CONNECTION 58 Sarasota , , EVERCARE HEALTH AND HOME CONNECTION 36 Lee , , EVERCARE HEALTH AND HOME CONNECTION 08 Charlotte , , EVERCARE HEALTH AND HOME CONNECTION 55 St. Johns , , EVERCARE HEALTH AND HOME CONNECTION 09 Citrus , , EVERCARE HEALTH AND HOME CONNECTION 42 Marion , , EVERCARE HEALTH AND HOME CONNECTION 27 Hernando , , WORLDNET SERVICES 17 Escambia 1 - N/A , , WORLDNET SERVICES 46 Okaloosa 1 - N/A , , WORLDNET SERVICES 57 Santa Rosa 1 - N/A , , WORLDNET SERVICES 66 Walton 1 - N/A , , New Plan - PSA N/A , , New Plan - PSA N/A , , New Plan - PSA N/A , , New Plan - PSA N/A , , New Plan - PSA N/A , , New Plan - PSA N/A , , New Plan - PSA N/A , , New Plan - PSA N/A , , New Plan - PSA N/A , , New Plan - PSA N/A , , New Plan - PSA N/A , , /3/2010 Milliman Page 5

27 Milliman Client Report Appendix D APPENDIX D Comparison of September 1, August 31, 2010 and September 1, August 31, 2011 Capitation Rates This report assumes that the reader is familiar with the State of Florida s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to AHCA and Elder Affairs to set September 1, August 31, 2011 capitation rates for this program. It may not be appropriate for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. This material should only be reviewed in its entirety State of Florida, Agency for Health Care Administration and Department of Elder Affairs September 1, August 31, 2011 Capitation Rate Development for Nursing Home Diversion Health Program

28 Appendix D Florida Agency for Health Care Administration and Department of Elder Affairs Nursing Home Diversion Calculation for September 1, August 31, 2011 Rates Comparison of September August 2010 to September August 2011 Capitation Rates Number Name May 2009 Enrollment September August 2010 Rates September August 2011 Rates Provider Name PSA Percent Change SUNRISE HOME HEALTH CARE 13 DADE 11-1, , % AMERIGROUP 50 Palm Beach , , % AMERIGROUP 43 Martin , , % AMERIGROUP 06 Broward , , % AMERIGROUP 13 Dade , , % AMERIGROUP 52 Pinellas , , % AMERIGROUP 29 Hillsborough , , % AMERIGROUP 51 Pasco , , % AMERIGROUP 53 Polk , , % AMERIGROUP 41 Manatee , , % AMERIGROUP 36 Lee , , % AMERIGROUP 48 Orange , , % AMERIGROUP 56 St. Lucie , , % AMERIGROUP 49 Osceola , , % AMERIGROUP 05 Brevard , , % AMERIGROUP 59 Seminole 7 7 1, , % AMERIGROUP 31 Indian River 9 3 1, , % AMERIGROUP 09 Citrus 3 7 1, , % AMERIGROUP 35 Lake 3 9 1, , % AMERIGROUP 27 Hernando 3 3 1, , % AMERIGROUP 42 Marion 3 8 1, , % AMERIGROUP 11 Collier 8 1 1, , % AMERIGROUP 08 Charlotte 8 1 1, , % AMERIGROUP 58 Sarasota 8 3 1, , % AMERIGROUP 16 Duval 4 3 1, , % AMERIGROUP 55 St. Johns 4-1, , % AMERIGROUP 64 Volusia 4 6 1, , % AMERICAN ELDERCARE, INC 50 Palm Beach , , % AMERICAN ELDERCARE, INC 48 Orange , , % AMERICAN ELDERCARE, INC 49 Osceola , , % AMERICAN ELDERCARE, INC 59 Seminole , , % AMERICAN ELDERCARE, INC 29 Hillsborough , , % AMERICAN ELDERCARE, INC 52 Pinellas , , % AMERICAN ELDERCARE, INC 05 Brevard , , % AMERICAN ELDERCARE, INC 06 Broward , , % AMERICAN ELDERCARE, INC 13 Dade , , % AMERICAN ELDERCARE, INC 16 Duval , , % AMERICAN ELDERCARE, INC 51 Pasco , , % 8/3/2010 Milliman Page 1

29 Appendix D Florida Agency for Health Care Administration and Department of Elder Affairs Nursing Home Diversion Calculation for September 1, August 31, 2011 Rates Comparison of September August 2010 to September August 2011 Capitation Rates Provider Name Number Name PSA May 2009 Enrollment September August 2010 Rates September August 2011 Rates Percent Change AMERICAN ELDERCARE, INC 41 Manatee , , % AMERICAN ELDERCARE, INC 58 Sarasota , , % AMERICAN ELDERCARE, INC 64 Volusia , , % AMERICAN ELDERCARE, INC 36 Lee , , % AMERICAN ELDERCARE, INC 08 Charlotte , , % AMERICAN ELDERCARE, INC 31 Indian River 9 8 1, , % AMERICAN ELDERCARE, INC 35 Lake , , % AMERICAN ELDERCARE, INC 53 Polk , , % AMERICAN ELDERCARE, INC 55 St. Johns , , % AMERICAN ELDERCARE, INC 56 St. Lucie , , % AMERICAN ELDERCARE, INC 43 Martin 9 1 1, , % AMERICAN ELDERCARE, INC 18 Flagler , , % AMERICAN ELDERCARE, INC 01 Alachua 3 1 1, , % AMERICAN ELDERCARE, INC 10 Clay 4 4 1, , % AMERICAN ELDERCARE, INC 28 Highlands , , % AMERICAN ELDERCARE, INC 42 Marion , , % AMERICAN ELDERCARE, INC 09 Citrus 3-1, , % AMERICAN ELDERCARE, INC 27 Hernando , , % AMERICAN ELDERCARE, INC 45 Nassau 4-1, , % PACE - PROJECT INDEPENDENCE AT HOME 6 Broward 10-1, , % PROJECT INDEPENDENCE AT HOME 13 Dade , , % VISTA HEALTH PLAN 50 Palm Beach , , % VISTA HEALTH PLAN 06 Broward , , % VISTA HEALTH PLAN 13 Dade , , % UNITED HOME CARE SOLUTIONS PROGRAM 13 Dade , , % CITRUS 29 Hillsborough , , % CITRUS 52 Pinellas , , % CITRUS 51 Pasco , , % CITRUS 53 Polk , , % CITRUS 06 Broward , , % CITRUS 13 Dade , , % CITRUS 50 Palm Beach 9 8 1, , % CITRUS 27 Hernando , , % CITRUS 41 Manatee , , % CITRUS 58 Sarasota , , % CITRUS 09 Citrus , , % CITRUS 42 Marion , , % CITRUS 01 Alachua 3 2 1, , % 8/3/2010 Milliman Page 2

30 Appendix D Florida Agency for Health Care Administration and Department of Elder Affairs Nursing Home Diversion Calculation for September 1, August 31, 2011 Rates Comparison of September August 2010 to September August 2011 Capitation Rates Provider Name Number Name PSA May 2009 Enrollment September August 2010 Rates September August 2011 Rates Percent Change CITRUS 48 Orange , , % CITRUS 16 Duval 4 2 1, , % CITRUS 49 Osceola 7 3 1, , % CITRUS 64 Volusia 4 5 1, , % CITRUS 59 Seminole 7 6 1, , % CITRUS 05 Brevard 7 1 1, , % CITRUS 35 Lake 3 4 1, , % HOPE LIFE CARE 36 Lee , , % HOPE LIFE CARE 08 Charlotte , , % HOPE LIFE CARE 11 Collier , , % HOPE LIFE CARE 26 Hendry 8 7 1, , % LITTLE HAVANA 13 Dade , , % LITTLE HAVANA 06 Broward , , % LITTLE HAVANA 50 Palm Beach 9 9 1, , % UNIVERSAL HEALTH CARE 41 Manatee , , % UNIVERSAL HEALTH CARE 27 Hernando , , % UNIVERSAL HEALTH CARE 58 Sarasota , , % UNIVERSAL HEALTH CARE 51 Pasco , , % UNIVERSAL HEALTH CARE 52 Pinellas , , % UNIVERSAL HEALTH CARE 53 Polk , , % UNIVERSAL HEALTH CARE 29 Hillsborough , , % UNIVERSAL HEALTH CARE 05 Brevard , , % UNIVERSAL HEALTH CARE 08 Charlotte 8 4 1, , % UNIVERSAL HEALTH CARE 59 Seminole 7 2 1, , % UNIVERSAL HEALTH CARE 48 Orange 7 6 1, , % UNIVERSAL HEALTH CARE 06 Broward , , % UNIVERSAL HEALTH CARE 13 Dade , , % UNIVERSAL HEALTH CARE 50 Palm Beach 9 3 1, , % UNIVERSAL HEALTH CARE 49 Osceola 7-1, , % UNIVERSAL HEALTH CARE 36 LEE 8-1, , % UNIVERSAL HEALTH CARE 11 COLLIER 3-1, , % UNIVERSAL HEALTH CARE 35 LAKE 3-1, , % UNIVERSAL HEALTH CARE 10 CLAY 4-1, , % UNIVERSAL HEALTH CARE 42 MARION 3-1, , % NEIGHBORLY CARE NETWORK 52 Pinellas , , % NEIGHBORLY CARE NETWORK 41 Manatee 6 4 1, , % NEIGHBORLY CARE NETWORK 51 Pasco , , % NEIGHBORLY CARE NETWORK 06 Broward , , % 8/3/2010 Milliman Page 3

31 Appendix D Florida Agency for Health Care Administration and Department of Elder Affairs Nursing Home Diversion Calculation for September 1, August 31, 2011 Rates Comparison of September August 2010 to September August 2011 Capitation Rates Provider Name Number Name PSA May 2009 Enrollment September August 2010 Rates September August 2011 Rates Percent Change NEIGHBORLY CARE NETWORK 13 Dade , , % NEIGHBORLY CARE NETWORK 31 Indian River 9 3 1, , % NEIGHBORLY CARE NETWORK 43 Martin 9-1, , % NEIGHBORLY CARE NETWORK 50 Palm Beach , , % NEIGHBORLY CARE NETWORK 56 St. Lucie 9 4 1, , % NEIGHBORLY CARE NETWORK 29 Hillsborough , , % NEIGHBORLY CARE NETWORK 58 Sarasota 8 5 1, , % NEIGHBORLY CARE NETWORK 48 Orange 7 4 1, , % NEIGHBORLY CARE NETWORK 05 Brevard 7 6 1, , % NEIGHBORLY CARE NETWORK 27 Hernando 3 1 1, , % NEIGHBORLY CARE NETWORK 53 Polk 6 7 1, , % NEIGHBORLY CARE NETWORK 09 Citrus 3 2 1, , % NEIGHBORLY CARE NETWORK 49 Osceola 7-1, , % NEIGHBORLY CARE NETWORK 59 Seminole 7 2 1, , % URBAN JACKSONVILLE 16 Duval , , % URBAN JACKSONVILLE 55 St. Johns 4 1 1, , % URBAN JACKSONVILLE 10 Clay 4 9 1, , % FLORIDA COMFORT CHOICE 06 Broward , , % FLORIDA COMFORT CHOICE 13 Dade , , % FLORIDA COMFORT CHOICE 50 Palm Beach , , % FLORIDA COMFORT CHOICE 16 Duval 4 5 1, , % FLORIDA COMFORT CHOICE 18 Flagler 4-1, , % FLORIDA COMFORT CHOICE 45 Nassau 4-1, , % FLORIDA COMFORT CHOICE 55 St. Johns 4-1, , % FLORIDA COMFORT CHOICE 64 Volusia 4 5 1, , % FLORIDA COMFORT CHOICE 52 Pinellas 5 1 1, , % FLORIDA COMFORT CHOICE 51 Pasco 5 1 1, , % FLORIDA COMFORT CHOICE 29 Hillsborough , , % FLORIDA COMFORT CHOICE 53 Polk 6 6 1, , % FLORIDA COMFORT CHOICE 41 Manatee 6-1, , % FLORIDA COMFORT CHOICE 48 Orange 7 8 1, , % FLORIDA COMFORT CHOICE 49 Osceola 7 2 1, , % FLORIDA COMFORT CHOICE 59 Seminole 7-1, , % FLORIDA COMFORT CHOICE 58 Sarasota 8 1 1, , % YOURCARE BREVARD 05 Brevard , , % HUMANA SENIORS CHOICE 31 Indian River , , % HUMANA SENIORS CHOICE 05 Brevard , , % HUMANA SENIORS CHOICE 47 Okeechobee 9-1, , % 8/3/2010 Milliman Page 4

32 Appendix D Florida Agency for Health Care Administration and Department of Elder Affairs Nursing Home Diversion Calculation for September 1, August 31, 2011 Rates Comparison of September August 2010 to September August 2011 Capitation Rates Provider Name Number Name PSA May 2009 Enrollment September August 2010 Rates September August 2011 Rates Percent Change HUMANA SENIORS CHOICE 56 St. Lucie , , % HUMANA SENIORS CHOICE 43 Martin , , % HUMANA SENIORS CHOICE 50 Palm Beach , , % HUMANA SENIORS CHOICE 06 Broward , , % EVERCARE HEALTH AND HOME CONNECTION 48 Orange , , % EVERCARE HEALTH AND HOME CONNECTION 49 Osceola , , % EVERCARE HEALTH AND HOME CONNECTION 59 Seminole , , % EVERCARE HEALTH AND HOME CONNECTION 05 Brevard , , % EVERCARE HEALTH AND HOME CONNECTION 29 Hillsborough , , % EVERCARE HEALTH AND HOME CONNECTION 51 Pasco , , % EVERCARE HEALTH AND HOME CONNECTION 52 Pinellas , , % EVERCARE HEALTH AND HOME CONNECTION 64 Volusia , , % EVERCARE HEALTH AND HOME CONNECTION 06 Broward , , % EVERCARE HEALTH AND HOME CONNECTION 13 Dade , , % EVERCARE HEALTH AND HOME CONNECTION 50 Palm Beach , , % EVERCARE HEALTH AND HOME CONNECTION 53 Polk , , % EVERCARE HEALTH AND HOME CONNECTION 41 Manatee , , % EVERCARE HEALTH AND HOME CONNECTION 35 Lake , , % EVERCARE HEALTH AND HOME CONNECTION 16 Duval , , % EVERCARE HEALTH AND HOME CONNECTION 58 Sarasota , , % EVERCARE HEALTH AND HOME CONNECTION 36 Lee , , % EVERCARE HEALTH AND HOME CONNECTION 08 Charlotte , , % EVERCARE HEALTH AND HOME CONNECTION 55 St. Johns , , % EVERCARE HEALTH AND HOME CONNECTION 09 Citrus , , % EVERCARE HEALTH AND HOME CONNECTION 42 Marion , , % EVERCARE HEALTH AND HOME CONNECTION 27 Hernando 3-1, , % WORLDNET SERVICES 17 Escambia 1-1, , % WORLDNET SERVICES 46 Okaloosa 1-1, , % WORLDNET SERVICES 57 Santa Rosa 1-1, , % WORLDNET SERVICES 66 Walton 1-1, , % New Plan - PSA 1 1-1, , % New Plan - PSA 2 2-1, , % New Plan - PSA 3 3-1, , % New Plan - PSA 4 4-1, , % New Plan - PSA 5 5-1, , % New Plan - PSA 6 6-1, , % 8/3/2010 Milliman Page 5

33 Appendix D Florida Agency for Health Care Administration and Department of Elder Affairs Nursing Home Diversion Calculation for September 1, August 31, 2011 Rates Comparison of September August 2010 to September August 2011 Capitation Rates Provider Name Number Name PSA May 2009 Enrollment September August 2010 Rates September August 2011 Rates Percent Change New Plan - PSA 7 7-1, , % New Plan - PSA 8 8-1, , % New Plan - PSA 9 9-1, , % New Plan - PSA , , % New Plan - PSA , , % 8/3/2010 Milliman Page 6

34 Milliman Client Report Appendix E APPENDIX E Actuarial Certification of September 1, August 31, 2011 Capitation Rates This report assumes that the reader is familiar with the State of Florida s Medicaid program, its benefits, and rate setting principles. The report was prepared solely to provide assistance to AHCA and Elder Affairs to set September 1, August 31, 2011 capitation rates for this program. It may not be appropriate for other purposes. Milliman does not intend to benefit and assumes no duty or liability to other parties who receive this work. This material should only be reviewed in its entirety State of Florida, Agency for Health Care Administration and Department of Elder Affairs September 1, August 31, 2011 Capitation Rate Development for Nursing Home Diversion Health Program

35 15800 Bluemound Road Suite 400 Brookfield, WI USA Tel Fax milliman.com David F. Ogden, FSA, MAAA Principal and Consulting Actuary Florida Department of Elder Affairs Capitated Contracts Ratesetting Actuarial Certification September 1, August 31, 2011 Nursing Home Diversion Capitation Rates I, David F. Ogden, am associated with the firm of Milliman, Inc. and am a member of the American Academy of Actuaries and meet its Qualification Standards for Statements of Actuarial Opinion. I have been retained by the Florida Department of Elder Affairs (Elder Affairs) to perform an actuarial certification of the Nursing Home Diversion capitation rates for September 1, August 31, 2011 for filing with the Centers for Medicare and Medicaid Services (CMS). I reviewed the capitation rates developed by Elder Affairs and am familiar with the Code of Federal Regulations, 42 CFR 438.6(c) and the CMS Appendix A, PAHP, PIHP and MCO Contracts Financial Review Documentation for At-risk Capitated Contracts Ratesetting. I examined the actuarial assumptions and actuarial methods used by Elder Affairs in setting the capitation rates for September 1, August 31, To the best of my information, knowledge and belief, for the period from September 1, 2010 to August 31, 2011, the capitation rates offered by Elder Affairs are in compliance with 42 CFR 438.6(c). The attached actuarial report describes the capitation rate setting methodology used by Elder Affairs. In my opinion, the capitation rates are actuarially sound, have been developed in accordance with generally accepted actuarial principles and practices, and are appropriate for the populations to be covered and the services to be furnished under the contract. In making my opinion, I relied upon the accuracy of the underlying records, data summaries, and capitation rate calculations prepared by Elder Affairs. A copy of the reliance letter received from Elder Affairs is attached and constitutes part of this opinion. I did not audit the data and calculations, but did review them for reasonableness and consistency and did not find material defects. In other respects, my examination included such review of the underlying assumptions and methods used and such tests of the calculations as I considered necessary. Actuarial methods, considerations, and analyses used in forming my opinion conform to the appropriate Standards of Practice as promulgated from time-to-time by the Actuarial Standards Board, whose standards form the basis of this Statement of Opinion. It should be emphasized that capitation rates are a projection of future costs based on a set of assumptions. Actual costs will be dependent on each contracted health plan s situation and experience. Offices in Principal Cities Worldwide

36 Florida Department of Elder Affairs Capitated Contracts Ratesetting Actuarial Certification September 1, 2010 August 31, 2011 Nursing Home Diversion Capitation Rates Page 2 This Opinion assumes the reader is familiar with the Florida Medicaid program, Medicaid eligibility rules, and actuarial rating techniques. The Opinion is intended for the State of Florida and Centers for Medicare and Medicaid Services and should not be relied on by other parties. The reader should be advised by actuaries or other professionals competent in the area of actuarial rate projections of the type in this Opinion, so as to properly interpret the projection results. David F. Ogden Member, American Academy of Actuaries