PPACA: Agent Groups Fear Effects Of Medical Loss Ratio Rules

The Texas Department of Insurance “held a stakeholders meeting consisting of issuer, provider and consumer representatives,” Geeslin writes.

Geeslin suggests in his comment that a minimum MLR standard could cause smaller carriers to flee from the individual market, especially if they believe the minimums could threaten their solvency.

The Texas Medical Association, Austin, Texas, has submitted a comment letter objecting to the idea that insurers might include cost-control efforts in medical expense totals.

A medical loss ratio should “measure the insurer’s performance in providing insurance — not value-added or cost-containment services,” Dr. Christopher Crow, chair of a TMA council, writes. “Neither value-added nor cost-containment services are losses or expenses that would be ‘suffered’ by the patient/insured person nor are they items for which the insurer has agreed to indemnify.”

The California Hospital Association, Sacramento, Calif., also is calling for a narrow MLR definition.

“CHA believes that MLR should not include payer activities or functions such as marketing, enrollee education, quality programs, information technology, claims or eligibility activities, administration, provider relations, preparation or distribution of materials or information to providers or others, underwriting or actuarial expenses, regulatory compliance costs, provider or enrollee appeals expenses, litigation costs, contracting or negotiating expenses, electronic records or enrollee interactions, provider instruction/education or other costs incurred that are not directly attributable to actual health care services rendered to enrollees by health care providers,” John Rigg, a CHA vice president, writes.

Advocacy for Patients with Chronic Illness Inc., Farmington, Conn., a nonprofit group that represents patients with chronic illnesses, says regulators should require insurers to show how much of the money spend on administration is going to pay for utilization review and the processing and defense of claim denial appeals.

“We understand and appreciate the role that utilization review plays in controlling costs…,” Jennifer Jaff, the group’s executive director, writes. “If we are to control health care costs in the United States, frivolous, expensive treatments that do not hold great promise for positive health outcomes can and should be prohibited by insurers. However, in our experience, not all insurers limit denials of coverage to circumstances in which the treatment truly is experimental or investigational, or not medically necessary.”

America‘s Health Insurance Plans, Washington, is asking CMS to work quickly to come up with permanent rules, rather than relying on makeshift interim rules.

“This is a very technical and complex area that has a significant impact on consumers, employers, and ‘health insurance health plans’ for the group and individual markets,” Jeffrey Gabardi, an AHIP senior vice president writes. “As a result, it is critical that the public receive as much advance notice as possible of the [HHS] secretary’s proposed rulemaking to establish and implement the process and rules under which the MLRs will be calculated. This, in turn, will ensure that the secretary has sufficient time to fully digest and consider comments. If the less deliberative interim final rulemaking with a comment period is utilized, then the secretary should include some time period endpoints so that there is review by the relevant agencies of the filed comments and subsequent final rulemaking. Any interim final rules should be considered a temporary gap measure toward final rulemaking and not remain as interim final for any extended period of time.”

The Council for Affordable Health Insurance, Alexandria, Va., is asking HHS to give small insurers special consideration.

“Smaller insurers should be exempted from the tighter MLR rules,” CAHI Acting Executive Director J.P. Wieske writes.

If smaller insurers are subject to the rules, they “should be given more flexibility in MLR calculations between blocks of business, and in combining blocks of business for MLR purposes,” Wieske writes. “Reinsurance expenses should be considered as a medical expense and not an administrative expense.”

American General Life Companies, Houston, a unit of American International Group Inc., New York (NYSE:AIG), notes that health insurers may be out of luck of regulators make inaccurate rate rulings.

“Appeals are generally made highly visible to the public and are structured so that companies are discouraged from appealing,” American General says in its comment. “Companies that believe they are ‘in the right’ may not appeal because of fear of retaliation, such as in the form of future product disapprovals.”

For earlier coverage of the MLR provision, please see ACA: Ohio Regulators Weigh In On Quality Improvement Definition and ACA: Commenters Parse Medical Cost.