AHIP seeks broad definitions in medical-loss ratio regs

The chief lobbying group for health insurers is asking HHS to include multiple programs and activities when the agency decides in forthcoming regulations how health plans can spend premium dollars.

The so-called medical-loss ratio provision in the new health reform law requires that insurers spend at least 85% of subscriber premiums on medical costs in group-coverage plans, and at least 80% in individual plans, starting next year. The goal is to prevent insurers from spending too many premium dollars on administrative costs, such as salaries and overhead.

America's Health Insurance Plans, the trade group for 1,300 insurers, said that bundled payments to providers should be included in the medical-loss ratio as reimbursement for clinical services provided. Some provider groups have urged HHS to only include direct patient services by licensed providers as part of this calculation.

In a public comment letter to HHS, AHIP wrote that all disease-management, wellness and care-coordination programs; nurse call lines; patient-safety efforts; education; and value-based purchasing programs such as pay-for-performance and gainsharing be classified in the ratio as quality-improvement activities.

The Federation of American Hospitals has argued that only programs that directly improve individual patient quality be allowed in this category.

When issuing guidance on what constitutes a quality-improvement activity, the definition “should recognize the full range of health plan activities--both directly and indirectly related to patient care--that have the primary purpose of improving patient outcomes,” according to the AHIP letter.

HHS has requested definitions and guidance on the medical-loss ratio provision from the National Association of Insurance Commissioners by June 1.