Rule on medical loss ratios has some worried
Similar to a health insurance policy, it’s what isn’t covered by HHS’ interim final rule on medical loss ratios that has some healthcare and consumer groups worried about their benefits.
The 308-page set of regulations, which were issued Nov. 22 and are expected to be published Dec. 1 in the Federal Register, detail rules for how much premium revenue health insurers must spend on covering direct patient care. What they don’t do is strengthen fraud-prevention efforts or offer financial assistance for the conversion to new disease classification codes used for billing insurance companies.
Hospital groups said they were generally pleased with the rule—which has a 60-day, public comment period from the time it is published in the register—that goes into effect on Jan. 1, 2011. Patient advocacy groups Families USA and Consumers Union said the regulations will give patients more power to demand quality. And America’s Health Insurance Plans said the regulations acknowledged the potential for disruptions in the individual insurance market and make attempts to minimize those disruptions.
Under the regulations, unveiled last week at a news conference by HHS Secretary Kathleen Sebelius, insurance companies in the individual and small-group markets will be required to spend at least 80% of the premium dollars they collect on medical care and quality-improvement activities.
Insurance companies in the large group market will have to spend at least 85% on direct patient care and quality efforts. If they don’t, these companies will be required to provide rebates to consumers in 2012. HHS estimates that the new rules will protect up to