Missing ben­e­fits?

Rule on med­i­cal loss ra­tios has some wor­ried

Modern Healthcare - - The Week In Healthcare - Jes­sica Zig­mond

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

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