Medical Loss Ratio rebate exposure
The bottom line
The introduction of the MLR reporting and rebate provisions in PPACA drives the need for health plans to develop new management disciplines to help minimize the effects of MLR on profitability:
- Developing and monitoring MLR estimates continually during the course of the year to evaluate and quantify their exposure to rebates
- Evaluating and applying multiple approaches to managing the impacts of MLR:
- Reducing administrative costs
- Reassessing the classification of certain administrative costs
- Reinvesting savings into membership's wellness
- Reducing premiums
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