The Center for Consumer Information & Insurance Oversight (CCIIO) has started posting the results of its examinations of health insurers’ medical loss ratio (MLR) data on the Web.
CCIIO is the arm of the Centers for Medicare & Medicaid Services (CMS) that runs Patient Protection and Affordable Care Act (PPACA) commercial health insurance market programs for the U.S. Department of Health and Human Services (HHS).
Health insurers send CCIIO the MLR data to prove that they’re complying with the PPACA requirement that they are spending at least 85 percent of large-group revenue, and 80 percent of individual and small-group revenue, on health care and quality improvement efforts. Insurers that fail to meet the MLR standards are supposed to send rebates to the enrollees.
See also: PPACA auditors are out there
For the federal government, looking at these reports is a way to see if insurers have been honest about their MLR numbers.
For health insurance agents and brokers, looking at the MLR exam reports may be another way to see what’s going on inside health insurance companies.
The CCIIO has posted only four exam reports so far, but it seems likely that more may be coming.
For a peek at some of the interesting bits in the first batch of reports, read on.
1. The MLR exam reports may be a good general indicator of how well a health insurer handles recordkeeping.
One of the first four insurers, Wellmark Inc., had no MLR problems.
Two had a couple of problems.
One had five “key findings.” The company did not owe any rebates, before or after it dealt with the data issues, but CCIIO examiners said the insurer should work on its internal controls.
2. The MLR reports show how a health insurer is related to other health insurers and plan administrators.
Corporate mergers, acquisitions and re-brandings sometimes make it difficult to identify how one insurer is related to its parent company.
In the new MLR exam reports, the CCIIO examiners include organizational charts showing how an insurer is connected to its ultimate corporate parent and other important corporate relatives. A list of pertinent inter-company agreements shows which administration companies the insurer works with.
3. The MLR exam reports shows where a health insurer gets its reinsurance.
Producers who are curious about reinsurance, or who want to try to sell reinsurance to health insurers, may enjoy the MLR exam section that shows where a health insurer gets its reinsurance, if it has reinsurance.
Wellmark, for example, did not have any reinsurance in effect in 2011, 2012 or 2013, according to CCIIO.
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