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Manage Capitation Payment

Accounts Payable Management

Description

The Manage Capitation Payment business process includes the activities to prepare Primary Care Case Management (PCCM) or Managed Care Organization (MCO) capitation payments. Some States offer members the option of enrolling in a PCCM product that requires the selection of a Primary Care Physician (PCP). The PCP receives a Per-Member-Per-Month (PMPM) capitation payment amount for all members that the State Medicaid Agency (SMA) assigns. The provider payment schedule defines the PCCM capitation rates typically actuary based on an age and gender rating or flat rate. Provider may opt in or out of PCCM plan and does not have to belong to the MCO. A prevailing alternative to the SMA integrated managed care model is to delegate specific member populations to MCOs and pay the MCO a PMPM capitation amount for all assigned members. The Manage Capitation Payment business process interrogates the member, provider, and MCO, member assignment and contract capitation information, and creates the information extract necessary to generate the capitation payment. The data extract includes any processing rules and options including retroactive adjustments to member assignments that affect the capitation payment amount to the provider or MCO.

Business Process Template

Trigger events
Environment-based
  • Periodic (e.g., monthly) timetable to conduct capitation information extract.
Interaction-based

None published

Results
  • Alert sent to Manage Accounts Payable Information business process to generate Provider/MCO capitation payments.
  • Tracking information as needed for measuring performance and business activity monitoring.
Business process steps
  • 1. START: Timed event triggered on monthly basis to initiate Manage Capitation Payment business process to invoke capitation information extract.
  • 2. END: Send alert to Manage Accounts Payable Information business process to generate provider/MCO capitation payments.
Predecessor processes
Successor processes
Shared data
  • Financial data store including accounts payable information
  • Contractor data store including contract information
  • Member data store including eligibility and benefits information
  • Provider data store including provider network & contract information
Constraints

The Manage Capitation Payment business process will adhere to the federal and state policies and business rules that may differ by state.

Failures
  • No PCP information is available.
  • No PCCM information is available.
Performance measures
  • Time to complete the process: e.g., Real Time response = within ___seconds, Batch Response = within ___ hours
  • Accuracy with which rules are applied =___%
  • Consistency with which rules are applied=___%
  • Error rate =___% or less

Source: CMS MITA 3.0 Business Process Template, Financial Management BPT.pdf, pages 21-22.

Business Capability Model (11 questions)

Each capability question defines five maturity levels, from Level 1 through Level 5.

Business Capability Descriptions

Is the process primarily manual or automatic?
  1. LEVEL 1The process consists primarily of manual paper-based activity to accomplish tasks.
  2. LEVEL 2SMA uses a mix of manual and automatic processes to accomplish tasks.
  3. LEVEL 3SMA automates process to the full extent possible within the intrastate.
  4. LEVEL 4SMA automates process to the full extent possible across the interstate.
  5. LEVEL 5SMA automates process to the full extent possible across the nation.
Does the State Medicaid Agency use standards in the process?
  1. LEVEL 1SMA focuses on meeting compliance thresholds for state and federal regulations using state-specific standards.
  2. LEVEL 2SMA applies a mix of HIPAA and state-specific standards.
  3. LEVEL 3SMA adopts MITA Framework, industry standards, and other nationally recognized standards for intrastate exchange of information.
  4. LEVEL 4SMA adopts MITA Framework, industry standards, and other nationally recognized standards for clinical and interstate information exchange.
  5. LEVEL 5SMA adopts MITA Framework, industry standards, and other nationally recognized standards for national exchange of information.
What methodology does SMA use to prepare the Capitation Premium payments?
  1. LEVEL 1SMA identifies members assigned to a managed care organization, a benefit manager, or a primary care physician, and matches them to appropriate rate cells in order to calculate monthly payments.
  2. LEVEL 2SMA automates the calculation process more than at Level 1 and produces the information necessary to produce a HIPAA compliant transaction.
  3. LEVEL 3SMA adopts MITA Framework, industry standards, that incorporate HIPAA premium payment schema for identification of managed care program enrollees, and preparation of the capitation premium payments.
  4. LEVEL 4SMA adopts MITA Framework, industry standards, that incorporate HIPAA premium payment schema for identification of managed care program enrollees, and preparation of the capitation premium payments.
  5. LEVEL 5SMA adopts MITA Framework, industry standards, that incorporate HIPAA premium payment schema for identification of managed care program enrollees, and preparation of the capitation premium payments.
How does the State Medicaid Agency collaborate with other agencies or entities in performing the process?
  1. LEVEL 1Very little collaboration occurs with other agencies to standardize information exchange or business tasks.
  2. LEVEL 2SMA collaborates with other agencies and entities to adopt HIPAA standards and Electronic Data Interchange (EDI) transactions.
  3. LEVEL 3SMA collaborates with other intrastate agencies and entities to adopt national standards, and to develop and share reusable business services.
  4. LEVEL 4SMA collaborates with other interstate agencies and entities to adopt national standards, and to develop and share reusable processes including clinical information.
  5. LEVEL 5SMA collaborates with agencies and entities for national (and international) interoperability improvements that maximize automation of routine operations.

Business Capability Quality: Timeliness of Process

How timely is the end-to-end process?
  1. LEVEL 1Process meets threshold or mandated requirements for timeliness (i.e., the process achieves results within the time specified by law or regulation). Calculations require one (1) or more business day to complete.
  2. LEVEL 2Process timeliness improves through use of automation. Timeliness exceeds legal requirements.
  3. LEVEL 3Timeliness improves via state and federal collaboration, use of information sharing, standards, and regional information exchange hubs. Timeliness exceeds Level 2.
  4. LEVEL 4Information is available in near real time. Processes that use clinical information result in immediate action, response, and results. SMA has interstate interoperability, which further improves timeliness over Level 3.
  5. LEVEL 5Information is available in real time. Processes improve further through connectivity with other States and with federal agencies. Most processes execute at the point of service. Results are almost immediate.

Business Capability Quality: Data Access and Accuracy

How accurate is the information in the process?
  1. LEVEL 1Use of direct data entry for information collection is manually intensive and susceptible to inconsistent or incorrect information. Stakeholders are unable to rely on information for decision-making.
  2. LEVEL 2HIPAA standard transactions improve accuracy of information but the decision-making process may be erroneous or misleading. Accuracy is higher than at Level 1.
  3. LEVEL 3Automation of information collection increases the reliability of SMA’s internal information. External sources of information use MITA Framework and industry standards for information exchange. Decision-making is automatic using standardized business rules definitions. Accuracy rating is at 99% or higher.
  4. LEVEL 4Automation of information collection increases the reliability of SMA’s internal and external sources of information. SMA adopts MITA Framework and industry standards for information exchange with interstate agencies. Decision-making is automatic using regional standardized business rules definitions. Accuracy rating is at 99% or higher.
  5. LEVEL 5SMA adopts MITA Framework and industry standards for information exchange with national agencies. Decision-making is automatic using national standardized business rules definitions. Accuracy rating is at 99% or higher.
How accessible is the information in the process?
  1. LEVEL 1SMA stores information in disparate systems including paper storage and obtains information manually.
  2. LEVEL 2SMA stores information in disparate systems, but automation and HIPAA standards increase accessibility over Level 1.
  3. LEVEL 3SMA obtains information easily and exchanges with intrastate agencies and entities based on MITA Framework and industry standards. Accessibility is greater than Level 2.
  4. LEVEL 4SMA obtains information easily and exchanges with interstate agencies and entities. Accessibility is greater than Level 3.
  5. LEVEL 5SMA obtains information easily and exchanges with national agencies and entities. Accessibility is greater than Level 4.

Business Capability Quality: Cost Effectiveness

What is the cost of the process compared to the benefits of its results?
  1. LEVEL 1High relative cost due to low number of automatic, standardized tasks. Manual intervention is required to manage adjustments and reconciliations.
  2. LEVEL 2Automation improves process and allows focus on exception resolution. Focus shifts to oversight and quality control of the process. Increases cost effectiveness ratio over Level 1.
  3. LEVEL 3SMA adopts MITA Framework, industry standards, and other nationally recognized standards further improving cost effectiveness ratio over Level 2.
  4. LEVEL 4SMA adopts MITA Framework, industry standards, and other nationally recognized standards for interstate information exchange. SMA increases cost effectiveness ratio over Level 3.
  5. LEVEL 5SMA adopts MITA Framework, industry standards, and other nationally recognized standards for national (and international) information exchange. SMA increases cost effectiveness ratio over level 4.

Business Capability Quality: Effort to Perform; Efficiency

How efficient is the process?
  1. LEVEL 1Process is labor intensive. There is wasted effort or expense to accomplish tasks. Process meets minimum state process guidelines and SMA performance standards. Efficiency is low.
  2. LEVEL 2Automation and state standards increase productivity. Efficiency is higher than Level 1.
  3. LEVEL 3SMA adopts MITA Framework, industry standards and information exchange with intrastate agencies and entities improving efficiency to 95% or higher.
  4. LEVEL 4SMA adopts MITA Framework, industry standards and information exchange with interstate agencies and entities improving efficiency to 98% or higher.
  5. LEVEL 5SMA adopts MITA Framework, industry standards and information exchange with national agencies and entities improving efficiency to 98% or higher.

Business Capability Quality: Accuracy of Process Results

How accurate are the results of the process?
  1. LEVEL 1Manual processes result in greater opportunity for human error. Accuracy is low.
  2. LEVEL 2Automation and standardized business rules definitions reduce error and improve accuracy above Level 1.
  3. LEVEL 3SMA adopts MITA Framework, industry standards and information exchange with intrastate agencies and entities improving accuracy to 95% or higher.
  4. LEVEL 4SMA adopts MITA Framework, industry standards and information exchange with interstate agencies and entities improving accuracy to 95% or higher.
  5. LEVEL 5SMA adopts MITA Framework, industry standards and information exchange with national agencies and entities improving accuracy to 95% or higher.

Business Capability Quality: Utility or Value to Stakeholders

Does the business process satisfy stakeholders?
  1. LEVEL 1Stakeholders lack confidence in information negatively affecting stakeholder satisfaction with the process.
  2. LEVEL 2Automation and standardization provides clear and useful information. Stakeholder satisfaction is greater than Level 1.
  3. LEVEL 3SMA adopts MITA Framework, industry standards and information exchange with intrastate agencies and entities improving stakeholder satisfaction to 90% or higher. SMA uses survey or questionnaire for information collection.
  4. LEVEL 4SMA adopts MITA Framework, industry standards and information exchange with interstate agencies and entities improving stakeholder satisfaction to 95% or higher.
  5. LEVEL 5SMA adopts MITA Framework, industry standards and information exchange with national agencies and entities improving stakeholder satisfaction to 98% or higher.

Source: CMS MITA 3.0 Business Capability Model, Financial Management BCM.pdf, pages 63-68.

Other Financial Management processes

Formulate BudgetGenerate Financial ReportManage 1099Manage Accounts Payable DisbursementManage Accounts Payable InformationManage Accounts Receivable FundsManage Accounts Receivable InformationManage Budget InformationManage Contractor PaymentManage Cost SettlementManage Drug RebateManage Estate RecoveryManage FundManage Incentive PaymentManage Member Financial ParticipationManage Provider RecoupmentManage TPL RecoveryPrepare Member Premium Invoice