Common use of Utilization Risk Corridor Clause in Contracts

Utilization Risk Corridor. The Utilization Risk Corridor is defined as the number of Inpatient Days that wrap around the days that State has committed to purchase on a prospective basis in the APM Year. This corridor will be determined using a percentage threshold above and below the value of prospective purchase days. In APM Year 1, the utilization corridor is 98% to 102% of the total prospective days purchased of 15,576. i. The Utilization Risk Corridor, therefore, shall be applied as follows for APM Year 1 and calculations shall be factored into the Year-End Reconciliation. 1. If the actual number of Inpatient Days utilized by Vermont Medicaid members is between 15,576 and 15,888, then Contractor shall be liable for the costs to serve patients for these days. If the actual number of Inpatient Days utilized by Vermont Medicaid members is greater than 15,888 during APM Year 1, then the State will reimburse Contractor an additional amount outside of the APM Payment for each day above 15,888 at a rate of $1,838.33 per day. 2. Conversely, if the actual number of Inpatient Days utilized by Vermont Medicaid members is between 15,264 and 15,576, Contractor will be entitled to retain 100% of the APM prospective payments. If the actual number of Inpatient Days utilized by Vermont Medicaid members is less than 15,264 during APM Year 1, then Contractor shall reimburse back to the State an amount equivalent to $1,838.33 per day for each day below 15,264. ii. If during the contract, the State or Contractor determines that utilization is 10% or more under the expected utilization as specified in Table 1 of Attachment B, then the parties shall meet and confer utilization or costs. Evaluations will occur no less frequently than monthly unless the Parties agree to evaluate utilization less frequently. iii. Parties agree to monitor changes in demand/delivery during the APM Year 1 with specific regard to impacts that may be resulting from the current COVID-19 public health emergency. If during the duration of the COVID-19 public health emergency related shifts are noted that were not captured in part or in full during the process to set the APM Payment, Parties shall meet to discuss these shifts and potential adjustments to the Utilization Risk Corridor. iv. Notwithstanding the provisions above, at the State’s sole discretion, Contractor may qualify for an adjustment to the lower boundary of the utilization risk corridor. This adjustment is tied to ensuring that Level 1 admissions continue to be prioritized among all inpatient admissions. Contractor will be entitled to an offset of any monies owed back to the State if the anticipated Vermont Medicaid days do not meet the required 98% of total target of 15,576, or 15,264 days, under the following conditions: 1. If Contractor had a refusal rate of 7% instead of 8%, then the lower bound overall utilization is -2.25%, not -2.00% from target. 2. If Contractor had a refusal rate of 6% instead of 8%, then the lower bound overall utilization is -2.50%, not -2.00% from target. 3. If Contractor had a refusal rate of 5% instead of 8%, then the lower bound overall utilization is -2.75%, not -2.00% from target. 4. If Contractor had a refusal rate of 4% instead of 8%, then the lower bound overall utilization is -3.00%, not -2.00% from target. 5. If Contractor had a refusal rate of 3% instead of 8%, then the lower bound overall utilization is -3.25%, not -2.00% from target. 6. If Contractor had a refusal rate of 2% instead of 8%, then the lower bound overall utilization is -3.50%, not -2.00% from target. 7. If Contractor had a refusal rate of 1% instead of 8%, then the lower bound overall utilization is -3.75%, not -2.00% from target. 8. If Contractor had a refusal rate of 0% instead of 8%, then the lower bound overall utilization is -4.00%, not -2.00% from target.

Utilization Risk Corridor. The Utilization Risk Corridor is defined as the number of Inpatient Days that wrap around the days that State has committed to purchase on a prospective basis in the APM Year. This corridor will be determined using a percentage threshold above and below the value of prospective purchase days. In APM Year 13, the utilization corridor is 98% to 102% of the total prospective days purchased of 15,57618,615. i. The Utilization Risk Corridor, therefore, shall be applied as follows for APM Year 1 3 and calculations shall be factored into the Year-End Reconciliation. 1. If the actual number of Inpatient Days utilized by Vermont Medicaid members is between 15,576 18,243 and 15,888, 18,987 then Contractor shall be liable for the costs to serve patients for these days. 2. If the actual number of Inpatient Days utilized by Vermont Medicaid members is greater than 15,888 18,987 during APM Year 1, 3 then the State will reimburse Contractor an additional amount outside of the APM Payment for each day above 15,888 18,987 at a rate of $1,838.33 3,100 per day. 2. Conversely, if the actual number of Inpatient Days utilized by Vermont Medicaid members is between 15,264 and 15,576, Contractor will be entitled to retain 100% of the APM prospective payments3. If the actual number of Inpatient Days utilized by Vermont Medicaid members is less than 15,264 18,243 during APM Year 13, then Contractor shall reimburse back to the State an amount equivalent to $1,838.33 3,100 per day for each day below 15,26418,243. ii. If during the contract, the State or Contractor determines that the Inpatient Days utilization is are 10% or more under the expected utilization as specified in Table 1 3 of Attachment B, then the parties Parties shall meet and confer to discuss utilization or costs. Evaluations will occur no less frequently than monthly unless the Parties parties agree to evaluate utilization less frequently. iii. Parties agree to monitor changes in demand/delivery during the APM Year 1 with specific regard to impacts that may be resulting from the current COVID-19 public health emergency. If during the duration of the COVID-19 public health emergency related shifts are noted that were not captured in part or in full during the process to set the APM Payment, Parties shall meet to discuss these shifts and potential adjustments to the Utilization Risk Corridor. iv. Notwithstanding the provisions above, at the State’s sole discretion, Contractor may qualify for an adjustment to the lower boundary of the utilization risk corridor. This adjustment is tied to ensuring that Level 1 admissions continue to be prioritized among all inpatient admissions. Contractor will be entitled to an offset of any monies owed back to the State if the anticipated Vermont Medicaid days do not meet the required 98% of total target of 15,576, 18,615 or 15,264 18,243 days, under the following conditions: 1. If Contractor had a refusal rate of 7% instead of 8%, then the lower bound overall utilization is -2.25%, not -2.00% from target. 2. If Contractor had a refusal rate of 6% instead of 8%, then the lower bound overall utilization is -2.50%, not -2.00% from target. 3. If Contractor had a refusal rate of 5% instead of 8%, then the lower bound overall utilization is -2.75%, not -2.00% from target. 4. If Contractor had a refusal rate of 4% instead of 8%, then the lower bound overall utilization is -3.00%, not -2.00% from target. 5. If Contractor had a refusal rate of 3% instead of 8%, then the lower bound overall utilization is -3.25%, not -2.00% from target. 6. If Contractor had a refusal rate of 2% instead of 8%, then the lower bound overall utilization is -3.50%, not -2.00% from target. 7. If Contractor had a refusal rate of 1% instead of 8%, then the lower bound overall utilization is -3.75%, not -2.00% from target. 8. If Contractor had a refusal rate of 0% instead of 8%, then the lower bound overall utilization is -4.00%, not -2.00% from target.

Utilization Risk Corridor. The Utilization Risk Corridor is defined as the number of Inpatient Days that wrap around the days that State has committed to purchase on a prospective basis in the APM Year. This corridor will be determined using a percentage threshold above and below the value of prospective purchase days. In APM Year 1, the utilization corridor is 98% to 102% of the total prospective days purchased of 15,576. i. The Utilization Risk Corridor, therefore, shall be applied as follows for APM Year 1 and calculations shall be factored into the Year-End Reconciliation. 1. If the actual number of Inpatient Days utilized by Vermont Medicaid members is between 15,576 and 15,888, then Contractor shall be liable for the costs to serve patients for these days. If the actual number of Inpatient Days utilized by Vermont Medicaid members is greater than 15,888 during APM Year 1, then the State will reimburse Contractor an additional amount outside of the APM Payment PAYMENT for each day above 15,888 at a rate of $1,838.33 per day. 2. Conversely, if the actual number of Inpatient Days utilized by Vermont Medicaid members is between 15,264 and 15,576, Contractor will be entitled to retain 100% of the APM prospective payments. If the actual number of Inpatient Days utilized by Vermont Medicaid members is less than 15,264 15,576 during APM Year 1, then Contractor shall reimburse back to the State an amount equivalent to $1,838.33 per day for each day below 15,264. ii. If during the contract, the State or Contractor determines that the Inpatient Days utilization is are 10% or more under the expected utilization as specified in Table 1 of Section 1 of Attachment B, then the parties shall meet and confer to discuss utilization or costs. Evaluations will occur no less frequently than monthly unless the Parties parties agree to evaluate utilization less frequently. iii. Parties agree to monitor changes in demand/delivery during the APM Year 1 with specific regard to impacts that may be resulting from the current COVID-19 public health emergency. If during the duration of the COVID-19 public health emergency related shifts are noted that were not captured in part or in full during the process to set the APM PaymentPAYMENT, Parties shall meet to discuss these shifts and potential adjustments to the Utilization Risk Corridor. iv. Notwithstanding the provisions above, at the State’s sole discretion, Contractor may qualify for an adjustment to the lower boundary of the utilization risk corridor. This adjustment is tied to ensuring that Level 1 admissions continue to be prioritized among all inpatient admissions. Contractor will be entitled to an offset of any monies owed back to the State if the anticipated Vermont Medicaid days do not meet the required 98% of total target of 15,576, or 15,264 days, under the following conditions: 1. If Contractor had a refusal rate of 7% instead of 8%, then the lower bound overall utilization is -2.25%, not -2.00% from target. 2. If Contractor had a refusal rate of 6% instead of 8%, then the lower bound overall utilization is -2.50%, not -2.00% from target. 3. If Contractor had a refusal rate of 5% instead of 8%, then the lower bound overall utilization is -2.75%, not -2.00% from target. 4. If Contractor had a refusal rate of 4% instead of 8%, then the lower bound overall utilization is -3.00%, not -2.00% from target. 5. If Contractor had a refusal rate of 3% instead of 8%, then the lower bound overall utilization is -3.25%, not -2.00% from target. 6. If Contractor had a refusal rate of 2% instead of 8%, then the lower bound overall utilization is -3.50%, not -2.00% from target. 7. If Contractor had a refusal rate of 1% instead of 8%, then the lower bound overall utilization is -3.75%, not -2.00% from target. 8. If Contractor had a refusal rate of 0% instead of 8%, then the lower bound overall utilization is -4.00%, not -2.00% from target.