Hao Yu¹, Andrew Dick, PhD¹, and Peter G. Szilagyi². (1) Community and Preventive Medicine, University of Rochester, 601 Elmwood Avenue, Box644, Rochester, NY 14642, 585-275-3432, hao_yu@urmc.rochester.edu, (2) Department of Preventive Medicine and Department of Pediatrics, University of Rochester, 601 Elmwood Avenue, Box644, Rochester, NY 14642

Research Objective: While most studies of risk-adjusted capitation focused on Medicare's reimbursement to managed care plans, few risk-adjustment models have been estimated separately for children. This study aims to fill the information gap by estimating risk-adjustment models for children, especially for children with special health care needs (CSHCN).

Study Design: Data were extracted from the 2000 Medical Expenditure Panel Survey (MEPS), which identified CSHCN using the CSHCN Screener. This study tested five sets of adjustors using a modification of the RAND two-part model, in which the first part uses logistic regression to estimate the probability of using health services in 2000, and the second part uses a generalized linear model with gamma distribution to estimate the total expenditures in 2000. Cross-validation of the estimated models was performed using a split-sample method with bootstraping.

Principal Findings: Socio-demographic factors explained 2% of the variance in annual total expenditure. Together with socio-demographic factors, CSHCN status explained 6%; the five detailed questions of CSHCN Screener explained 12%; subjectively rated health status explained 8%; prior year use and expenditure explained 21%. All the adjusters together explained 22%.

Conclusions: Each of the risk adjustment models explained only a small proportion of the variance of annual total expenditure. Adding CSHCN status as an adjuster tripled the proportion explained by socio-demographic factors alone. The five questions of CSHCN Screener had explained the variation more than the subjectively rated health status. The CSHCN information could help reduce discrimination facing CSHCN in a competitive health plan market.

Learning Objectives: At the conclusion of the session, the participant (learner) in this session will be able to

• Describe a risk adjustment model for capitation rates for children with special health care needs.
• Articulate the proceedure for assessing the risk adjustment model for children with special health care needs.

Keywords: Children With Special Needs, Financing

Presenting author's disclosure statement:
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.