Some insurers have a potential MLR rebate exposure in excess of $300 million.
Summary: Insurers need to take steps now to understand their Medical Loss Ratio (MLR) rebate exposure, and then take action soon to improve their MLR position and avoid or minimize rebate payouts, which will begin in 2012.
A global approach to reducing utilization management costs
One of the limiting factors in reducing utilization management (UM) costs is the ongoing shortage of clinical reviewers and the associated higher labor costs. Other industries faced with a limited and (or) costly skilled labor force have effectively addressed this challenge by finding these resources globally.
Take the example of MediCall.
MediCall is a specialized clinical services provider that currently processes more than 90,000 UM claims per month for more than 20 million US patients. US- and Philippine-licensed nurse teams, located in URAC-accredited operational centers, work as remote users within a client's own UM platforms.
This approach has proven effective at significantly reducing UM costs while improving quality, consistency and productivity. MediCall's US-licensed registered nurses transparently provide services in a variety of UM aspects, such as:
- UM intake
- Inpatient precertification or predetermination
- Concurrent, outpatient or retrospective utilization review
- Network direction
Our new series, 5: insights for executives, explores five questions regarding Medical Loss Ratio rebate exposure:
The Patient Protection and Affordable Care Act (PPACA) establishes MLRs as the mechanism to make sure that insurers with health business spend a minimum level of premium revenue on clinical services and activities to improve health care quality.
If an insurer fails to reach the minimum level, it is required to provide a rebate to plan enrollees. Rebates are calculated using calendar-year activity, based on a formula developed by the National Association of Insurance Commissioners (NAIC).
The rebate calculation is required to be filed with the Secretary of Health and Human Services (HHS) by 1 June of the following year, with any rebates paid by 1 August of that year.