Reducing the Risk of Capitation. A number of states are trying funding strategies that reduce the likelihood that the state's capitation rate will be inadequate. Risk sharing allows both the state and the managed care plan to benefit from profits and share in losses. Case management rates are payments to managed care plans based on the enrollees who actually use services. Bonuses are used to reward plans that provide high-quality care.
States can also impose penalties on plans for failing to meet quality measures.
A number of states use performance measurement to gauge how specific aspects of their managed care rank relative to other managed care system. When waivers were more generally required, HCFA obliged states to submit detailed information on how they would measure plan performance. Those data collection specifications should be continued in managed care contracts. Advocates should be at the table from the beginning of discussions and should take care that all parties are represented. Deciding whether a carve-out will be developed and what groups of people or types of services will be included is fundamental.