PPACA MLR Rules: What If the Insurer Paid Enough Claims?

Health insurers and an employer group noted that the PPACA MLR rules only started to take effect in 2011, that comparisons with the 2010 MLR figures could be misleading, and that another part of PPACA already will require HHS to publish issuers’ MLR data on the Web.

“Expanding the notice of MLR information to all issuers would further the goals of improving transparency of health insurance markets, supporting more informed purchase decisions, and promoting competition and efficiency,” CMS officials say in a response to the comments. “At the same time, we appreciate the concerns about administrative costs.”

CMS officials ended up siding mainly with the health insurers and employer group.

Most coverage issuers that owe no rebates will have to send MLR notices, but only general notices explaining that the plans met the PPACA MLR targets, and only for 2011, officials say.

The notices “will not include the issuer’s MLR for the current or prior reporting year or other specific measures of issuer performance,” officials say. “Instead, the notice will help educate consumers about the MLR measures and direct them to the HHS Web site, HealthCare.gov, for information about issuers’ actual MLRs.”

Having all issuers send MLR notices for 2011 will help consumers learn how the rebate system works, and sending notices to consumers who are not getting the rebates may help those consumers understand why some people are getting the rebates and others are not, officials say.

The notice can be sent electronically, and the procedure described in the final rule does not apply to student health plans, limited-benefit medical plans or plans that cover expatriates, officials say.

Other disclosure rules already apply to the expat plans and the limited-benefit plans, or “mini-med” plans, officials say.

CMS also is exempting issuers without credible experience, such as an issuer with fewer than 1,000 covered lives. Regulators are classifying small, non-credible issuers as issuers without an MLR to report and are presuming that those plans meet or exceed the applicable MLR standard.

Officials are estimating the final rule procedure will apply to about 300 issuers, and that those issuers will spend about $10,000 each on sending out the general MLR notices.