Common use of Experience Rebate Reward Clause in Contracts

Experience Rebate Reward. The standard Experience Rebate (see Attachment A, “Uniform Managed Care Contract Terms and Conditions,” Article 10.11, “STAR and CHIP Experience Rebate”) provides for an MCO to retain 100 percent of pre-tax income (as costs and income are defined by the Uniform Managed Care Manual), when such income is three percent (3%) (or less) of revenues, and further provides for a graduated scale of rebating to HHSC a portion of relevant MCO income in excess of three percent (3%) of revenues (subject to loss carry-forwards and other stipulations). As a financial incentive for demonstrated superior performance with respect to HHSC-specified performance indicators, the HHSC may raise the three percent (3%) threshold that commences rebates to three and one-half percent (3.5%). In consultation with the MCOs, HHSC will develop the methodology for determining the level of performance necessary for an MCO to earn the Experience Rebate Reward. The finalized methodology will be added to the Uniform Managed Care Manual. HHSC will calculate whether a MCO is eligible for the Experience Rebate Reward, if applicable, prior to the 90-day Financial Statistical Report (FSR) filing. HHSC anticipates that it will not implement the Experience Rebate Reward incentive for FSR Reporting Period 12/13 of the Contract. HHSC will invite MCO comments on potential approaches prior to implementation of the new performance-based Experience Rebate Reward.

Experience Rebate Reward. The standard Experience Rebate (see Attachment A, “Uniform Managed Care Contract Terms and Conditions,” Article 10.11, “STAR and CHIP Experience Rebate”) provides for an MCO to retain 100 percent of pre-tax income (as costs and income are defined by the Uniform Managed Care Manual), when such income is three percent (3%) (or less) of revenues, and further provides for a graduated scale of rebating to HHSC a portion of relevant MCO income in excess of three percent (3%) of revenues (subject to loss carry-forwards and other stipulations). As a financial incentive for demonstrated superior performance with respect to HHSC-specified performance indicators, the HHSC may raise the three percent (3%) threshold that commences rebates to three and one-half percent (3.5%). In consultation with the MCOs, HHSC will develop the methodology for determining the level of performance necessary for an MCO to earn the Experience Rebate Reward. The finalized methodology will be added to the Uniform Managed Care Manual. HHSC will calculate whether a MCO is eligible for the Experience Rebate Reward, if applicable, prior to the 90-day Financial Statistical Report (FSR) filing. HHSC anticipates that it will not implement the Experience Rebate Reward incentive for FSR Reporting Rate Period 12/13 1 of the Contract. HHSC will invite MCO comments on potential approaches prior to implementation of the new performance-based Experience Rebate Reward.