Insurance groups seek to limit health law damage with medical-loss ratio definitions

Insurance groups are wrangling with regulators on defining a few key terms that will significantly alter how they do business under the new health reform law.

Kaiser Health News: "[S]tate and federal officials are wrestling with how to define 'unreasonable' premium increases, a thorny issue Congress has handed regulators. The definition is critical because the law requires review and justification for premium increases deemed unreasonable, starting this year. Federal regulators do not have authority to outright deny rate increases, although the provision could help them pressure insurers hold down premiums." But it is unclear what defines "unreasonable."  "Even the National Association of Insurance Commissioners, representing appointed and elected state regulators, could not reach consensus on a single definition. Instead, the NAIC sent a letter this week to the Department of Health and Human Services suggesting 11 options for defining a 'potentially unreasonable' premium increase." States will retain authority to oversee health insurance premium pricing, but insurers are pushing for a definition to be tied to factors such as an insurer's ability to pay estimated claims costs (Appleby, 5/17).

America's Health Insurance Plans, the lead insurer lobbying group, is leading the charge for inclusions of things like the fraud and appeal investigations in the medical-loss ratios, Modern Healthcare reports. "America's Health Insurance Plans, the trade group for 1,300 insurers, said that bundled payments to providers should be included in the medical-loss ratio as reimbursement for clinical services provided. Some provider groups have urged HHS to only include direct patient services by licensed providers as part of this calculation. ... In a public comment letter to HHS, AHIP wrote that all disease-management, wellness and care-coordination programs; nurse call lines; patient-safety efforts; education; and value-based purchasing programs such as pay-for-performance and gainsharing be classified in the ratio as quality-improvement activities." Others, such as the Federation of American Hospitals, argue that only programs that improve patient quality should be allowed (Vesely, 5/16).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.