Capitated Rate Setting, Contracting, and Beneficiary Enrollment Processes of the Comprehensive Health Care Program - 391-0701-16

Description of Agency

The Comprehensive Health Care Program was initiated in 1996 to institute value-based purchasing as a mechanism to control costs and improve beneficiary care in Michigan’s Medicaid program. Through a competitive bid process, managed care organizations, known as Medicaid Health Plans (MHPs), are awarded contracts to provide health care and care management services to the Medicaid population.

During fiscal year 2015, the total capitated rate payments made by the Michigan Department of Health and Human Services (MDHHS) to MHPs totaled $7.4 billion. As of March 1, 2016, there were approximately 1.7 million individuals enrolled in managed care either through the Medicaid program or Healthy Michigan Plan. Beginning January 1, 2016, MDHHS contracted with 11 MHPs.

Audit Objectives

  1. To assess the sufficiency of MDHHS’s contracting process for MHPs.

  2. To assess the effectiveness of MDHHS’s capitated rate setting process.

  3. To assess the effectiveness of MDHHS’s enrollment process for MHP beneficiaries.


Estimated Release Date: April 2017

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