The NAIC is expected to tell the House Energy & Commerce Committee “No” on all questions asked with respect to NAIC leadership interactions with the Department of Health and Human Services on developing the NAIC’s model law on medical loss ratios (MLR).
The Patient Protection and Affordable Care Act (PPACA) requires the NAIC to establish uniform definitions of activities which improve health care quality. These definitions were to serve as the basis for the Act’s MLR requirements. Beginning in 2011, insurance companies have been required to comply with new MLR requirements that mandate at least $0.80 of every health insurance premium dollar to go toward the cost of actual medical care, leaving only the remaining $0.20 to cover administrative costs–where insurers derive any profit.
The MLR has been a deeply contentious issue, with insurance industry advocates noting that it could lead to carriers cutting commissions paid to agents in order to make up the difference for constrained profit margins. National Underwriter has received numerous letters and comments from health agents themselves stating that the MLR alone could force many of their practices to close.
The House Energy and Commerce Committee sent a letter on Dec. 7 to Iowa Insurance Commissioner and NAIC President Susan Voss, former NAIC president Jane Cline (now in private practice as a lawyer in West Virginia), and Kansas Insurance Commissioner Sandy Praeger (who works extensively on NAIC health insurance committee work), asking four questions.
The questions asked Voss, Cline and Praeger if HHS officials interacted with the NAIC staff or influenced the NAIC on its MLR model regulations with requests, provisions or pressure. A letter is due to Congress Dec. 19th.
“The bottom letter on this letter from Energy & Commerce is … basically on all these questions, no, no, no, no, no,” Voss said to National Underwriter recently. “We had no communications (with regard to the specific questions). Did they provide us interpretations? No. Did they offer legal interpretations? No. Basically, we were left alone to do the MLR.”
“The bottom line is, we had no real interaction with HHS on these issues and we will be issuing a letter (to that effect,)” Voss stated.
It follows the decision by HHS on Dec. 2 to include agents in the MLR calculations in a final regulation despite a resolution adopted by the NAIC the prior week asking that agents be removed from the calculation.
The letter was signed by Rep. Fred Upton (R-Mich), chairman of the Energy and Commerce Committee; Joseph Pitts (R-Pa.) and Michael Burgess (R-Texas), chairman and vice chairman of E&C’s Health Subcommittee; and Cliff Stearns (R-Fla.), chairman of the committee’s Subcommittee on Oversight and Investigations.
Specifically, the letter asked if HHS officials had discussed the MLR regulation with commissioners or staff, and wanted to know which staffers and commissioners participated in such discussions.