What You Need to Know
- The researchers used ACA medical loss ratio data from 2011 through 2015.
- The magnitude of the claim exaggerating was less than what the researchers had expected.
- The researchers like the idea of regulators using more cash clawbacks.
About 14% of U.S. health insurers suppressed their Affordable Care Act medical loss ratio rebate bills before 2016 by exaggerating how much they spent on health care, according to a new accounting research paper.
But this fudging the numbers problem was smaller than health insurance companies had estimated, and insurance regulators have good tools they could use to control any data fudging, the researchers say in the new paper.
In 2013, it was estimated that 20% of health insurers were fudging health spending numbers to cut rebates.
The researchers — Evan Eastman of Florida State University, David Eckles of the University of Georgia and Andrew Van Buskirk of Ohio State University — are on track to have their paper appear in The Accounting Review.
MLR Rebate System
Former President Barack Obama signed the two bills in the Affordable Care Act package in 2010.
Some of the ACA provisions that people think of as “Obamacare,” such as the provisions that created the ACA public health insurance exchange system, took effect in 2014.
Other provisions, such as the one that created the ACA medical loss ratio (MLR) program, took effect quickly.
The MLR provision requires health insurers spend a minimum amount of their revenue on health care, fraud detection and quality improvement efforts or else send cash back to the customers. The minimum MLR ratios are 85% for large group plans and 80% for individual and family policies and small group plans.