Rate Modeling and Analysis


Parker Dennison has extensive experience with development of rate models for Medicaid and state-funded community behavioral health services, including actual and estimated cost-based rates and use of a market basket of rates from other states with adjustments to account for geographic and cost differences. Activities have included guidance for stakeholder processes for input on rate methodologies and assumptions, validation of proposed rates using provider cost data and impact analyses to project the estimated costs for revised rate models. We have experience with adapting rate models to the unique needs of crisis services or other core services in geographically isolated areas, and developing models to test the validity of provider requests for rate increases under appropriate staffing, productivity and administrative cost levels.

Illinois Department of Human Services/Division of Mental Health

Assistance with the development of rates for an expansion of Medicaid rehabilitation services, including fiscal impact analysis and CMS approval of proposed methodology and rates. The project included validation of the rates based on provider cost and performance data at the time of implementation of the state plan amendment and five years later to determine if rates created barriers to access. Parker Dennison also developed a rate model for state-funded residential services and a corresponding impact analysis on system costs for conversion of residential grants to per diem rates.

Louisiana Department of Health and Hospitals

Developed rates for Medicaid rehabilitation services based on a market basket of rates for similar services from other states. The rates were then adjusted to estimated Louisiana costs based on an index that accounted for differences including cost of behavioral health personnel, median income and cost of living in other states compared to Louisiana.

New Mexico Human Service Department

Developed rates for an amendment to the Medicaid state plan based on a market basket of rates from other states, and New Mexico’s current rates for similar services across multiple state departments. Parker Dennison also assisted with presenting the rates and underlying methodology to CMS as a part of the SPA approval.

Community Partnership of Southern Arizona

Developed a methodology for a multi-year project to review rates for encounters submitted to support risk-based contract payments. The analysis included provider costs, staffing, and productivity data to assess whether rate adjustments were appropriate. A separate tool was developed to assist providers with projecting encounter value with variable population mixes, staffing models and service utilization.