Adjusted Clinical Groups: Predictive Accuracy for Medicaid Enrollees in Three States

Actuarial split-sample methods were used to assess predictive accuracy of adjusted clinical groups (ACGs) for Medicaid enrollees in Georgia, Mississippi (lagging in managed care penetration), and California. Accuracy for two non-random groups—high-cost and located in urban poor areas—was assessed. Measures for random groups were derived with and without short-term enrollees to assess the effect of turnover on predictive accuracy. ACGs improved predictive accuracy for high-cost conditions in all States, but did so only for those in Georgia's poorest urban areas. Higher and more unpredictable expenses of short-term enrollees moderated the predictive power of ACGs. This limitation was significant in Mississippi due in part, to that State's very high proportion of short-term enrollees.