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PPACA: NAIC Adds Medical Loss Ratio Changes to Blanks

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Members of the National Association of Insurance Commissioners today voted to approve a medical loss ratio blanks proposal.

The NAIC, Kansas City, Mo., will post the approved blank form Wednesday, officials say.

A blank is the form an insurer uses to submit financial data to state insurance regulators.

The federal Affordable Care Act, the legislative package that includes the Patient Protection and Affordable Care Act (PPACA), will require the minimum medical loss ratio (MLR), or percentage of premium revenue spent on health care and quality improvement efforts, to be 80% for individual and small group health coverage and 85% for large group coverage.

The NAIC is creating a supplemental health care exhibit that insurers can use to supply the MLR information needed to verify compliance with the minimum MLR requirements.

Insurers that fail to meet the MLR requirements are supposed to compensate customers by sending them rebates.

Insurers will have to report spending on categories such as “expenses for health improvements other than health information technology,” “health information technology expenses related to health improvement,” and “deductible fraud and abuse detection recovery expenses” for individual business, small group business, large group business, government business, “other health business,” and “other business (excluded by statute).”

Some categories of expenses will be included in the MLR calculations, and others will be reported separately but left out of the official calculations.

The revised blanks form was approved at the NAIC summer meeting in Seattle both by the NAIC’s Executive Committee and by the plenary, the body that includes all voting members of the NAIC.

The vote tally was not immediately available.

Health Care for America Now (HCAN), Washington, a group that wants regulators to make the minimum MLR requirements as tight as possible, is calling the adoption of the blanks proposal “a step toward ending the health insurance companies’ stranglehold on our health care.”

“The top state insurance regulators from across the nation voted to put patient care above insurance company profits,” HCAN Executive Director Ethan Rome says in a statement.

Rome says the blanks vote has not settled how regulators will classify health insurer expenditures on federal taxes and producer compensation.

America’s Health Insurance Plans (AHIP), Washington, has put out a statement praising the openness of the process the NAIC has used to develop the MLR blanks but expressing concerns about the blanks.

The version approved today “could have the unintended consequence of turning-back-the-clock on efforts to improve patient safety, enhance the quality of care, and fight fraud,” AHIP President Karen Ignagni says in a statement.

AHIP sent a letter to the NAIC contending that regulators should let insurers include fraud prevention and detection expenses, utilization review costs, individual policy wellness expenses, and other expenses in MLR calculations.


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