            CONVERSION OF COUNTY PER CAPITA COSTS INTO RATES


The Adjusted Average Per Capita Cost (AAPCC) is a prospective estimate of 
Medicare cost levels by demographic category, in the fee-for-service sector 
of the geographic area.

The "AAPCC??.CSV" file for year ?? (e.g. 95 for 1995 AAPCC'S) contains the 
standardized per capita rates of payment by county.  For each county there 
will be six rates of payment (i.e. Aged Part A; Aged Part B; 
Disabled Part A; Disabled Part B; ESRD Part A; ESRD Part B).  These 
standardized per capita rates of payment represent 95 percent of the 
standardized fee-for-service county per capita cost (see the AAPCC Record
Description below for the file layout).

The AAPCC methodology adjusts for age, sex, Medicaid status, working status, 
and institutional status of the Medicare beneficiaries in a given county. 
Also below are the tables containing the demographic cost factors used in 
this adjustment.  Each factor relates the Medicare cost for a person in 
that demographic cell to the cost for the average Medicare beneficiary 
(Factor = 1.00).

To calculate the actual per capita rates of payment, the rates in the AAPCC 
file must be multiplied by the demographic cost factors.  The calculation 
of this monthly payment must be computed separately for Part A and Part B 
using the following steps:

1.   Using the State and County of residence, select the appropriate 
     standardized per capita rate (Aged, Disabled, or ESRD from the 
     AAPCC file).

2.   Using the tables of the demographic cost factors with the proper 
     Part (A or B) and age group (10 categories), select the appropriate 
     factor for the specific sex (male or female) and status 
     (Institutionalized, Medicaid, Medicare, and Working Aged).

3.   Multiply the rate (Step 1) by the factor (Step 2) to calculate the 
     monthly payment.

Note:  Demographic adjustments are not made for ESRD enrollees.  For 
       these cases, the rate (Step 1) is the monthly payment.
                            
                            
                            



1994 DEMOGRAPHIC COST FACTORS FOR THE AGED


                                 PART A - Hospital Insurance

Sex and       Institutional             N o n - I n s t i t u t i o n a l
Age Group                                              Non-           Working
                                  Medicaid           Medicaid           Aged

Male:

85 & Over        2.35                2.50                1.30            N/A
80 - 84          2.35                2.35                1.20            N/A
75 - 79          2.35                2.05                1.10            N/A
70 - 74          2.35                1.65                 .85            N/A
65 - 69          1.90                1.25                 .70            N/A

Female:

85 & Over        2.00                1.90                1.10            N/A
80 - 84          2.00                1.65                1.00            N/A
75 - 79          2.00                1.40                 .85            N/A
70 - 74          1.80                1.10                 .70            N/A
65 - 69          1.55                 .85                 .55            N/A




                          PART B - Supplementary Medical Insurance

Sex and       Institutional             N o n - I n s t i t u t i o n a l
Age Group                                              Non-           Working
                                  Medicaid           Medicaid           Aged

Male:

85 & Over        1.95                1.65                1.15            N/A
80 - 84          1.95                1.65                1.15            N/A
75 - 79          1.95                1.60                1.10            N/A
70 - 74          1.85                1.40                1.00            N/A
65 - 69          1.60                1.10                 .75            N/A

Female:

85 & Over        1.70                1.25                 .95            N/A
80 - 84          1.70                1.25                 .95            N/A
75 - 79          1.70                1.25                 .95            N/A
70 - 74          1.65                1.15                 .85            N/A
65 - 69          1.50                1.05                 .70            N/A






                                 
                                 
1994 DEMOGRAPHIC COST FACTORS FOR THE DISABLED


                                 PART A - Hospital Insurance

Sex and       Institutional             N o n - I n s t i t u t i o n a l
Age Group                                              Non-           Working
                                  Medicaid           Medicaid           Aged
 
Male:

60 - 64           .60                1.85                1.00            N/A
55 - 59           .85                1.55                 .80            N/A
45 - 54          1.10                1.30                 .65            N/A
35 - 44          1.35                1.10                 .60            N/A
UNDER 35         1.80                1.10                 .60            N/A

Female:

60 - 64           .70                1.55                1.30            N/A
55 - 59           .95                1.35                 .95            N/A
45 - 54          1.20                1.20                 .75            N/A
35 - 44          1.40                1.20                 .60            N/A
UNDER 35         1.85                1.20                 .55            N/A
                                 
                                 
                          PART B - Supplementary Medical Insurance

Sex and       Institutional             N o n - I n s t i t u t i o n a l
Age Group                                              Non-           Working
                                  Medicaid           Medicaid           Aged
 
Male:

60 - 64           .95                1.50                 .95            N/A
55 - 59          1.10                1.30                 .75            N/A
45 - 54          1.25                1.15                 .60            N/A
35 - 44          1.40                1.05                 .50            N/A
UNDER 35         1.60                1.05                 .45            N/A

Female:

60 - 64          1.25                1.65                1.30            N/A
55 - 59          1.45                1.45                1.15            N/A
45 - 54          1.60                1.25                 .95            N/A
35 - 44          1.75                1.10                 .80            N/A
UNDER 35         1.85                 .95                 .70            N/A
