HHS issued final regulations requiring insurance plans to spend minimum percentages of premium dollars on paying for healthcare services this year or refund the difference to their customers next year.
Late News: HHS finalizes medical-loss ratio regs, rejects insurer requests
Under the medical-loss ratio prescribed by the Patient Protection and Affordable Care Act, new individual and small group plans must spend 80% of premium dollars on medical care and healthcare quality improvement, with the remainder allowed for administrative costs. The ratio for large-group plans is 85%. Karen Ignagni, president and CEO of America's Health Insurance Plans, hailed changes to the proposed rule issued in December 2010 for recognizing some of the costs associated with modernizing the medical claims coding system “as activities that improve healthcare quality.”
The final rule, however, rejected insurer requests that the health expenditures side of the equation include all costs associated with implementing ICD-10 codes, as well as anti-fraud efforts. The rule also will wind down a “special circumstances adjustment for mini-med plans,” giving the catastrophic insurance plans some leeway in calculating their ratio until 2014. Consumers Union praised several components of the rule but blasted that compromise.
“Today's announcement by HHS recognizes the need for mini-med plans to start increasing value for policyholders by requiring them to phase-in the new MLR standard,” Sondra Roberto, staff attorney for the consumer advocacy group, said in a statement. “But as long as these plans continue, policyholders may be left with unexpected medical debt in the event of a major illness.”
Send us a letter
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.