The audit found that Medicaid capitation rates were actuarially sound. However, the capitation rates resulted in excessive savings because the Division of Medical Assistance (DMA) did not establish an explicit margin for savings. Also, DMA did not ensure complete and accurate financial, encounter, and member month information was used to set the capitation rates. Details about each item are provided in the Audit Findings, Recommendations, and Responses section of the report. The Department of Health and Human Services disagreed with certain details in the report. As a result, the report includes a State Auditor's Response to ensure that readers have complete and accurate information and are not misled.

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