AHA calls for changes to MLR rules

The American Hospital Association has asked the U.S. Department of Health and Human Services for a change in the final rules associated with new minimum medical-loss ratios required under the Patient Protection and Affordable Care Act.

The AHA wants all capitated payments classified as medical claims, therefore including the entire cost of providing delivery, plus administrative overhead, within the payment.

In a letter submitted to HHS Secretary Kathleen Sebelius on Jan. 31, AHA Senior Vice President Linda E. Fishman said such a change would be consistent with the National Association of Insurance Commissioners position that capitated payments should be categorized as medical claims.

"One of the unresolved issues that the AHA and other stakeholders raised during the NAIC's deliberations regarding the treatment of capitated payments arose from a concern that insurers would attempt to shift significant administrative costs to the medical claims portion of the MLR equation by entering into capitated payment arrangements with intermediate risk-bearing organizations that are not part of a provider organization," Fishman noted. Making such a change would avoid that practice, she added.

The AHA has also requested clarifications of a rule that would allow initiatives to improve healthcare quality count toward the MLR. It raised concerns that the rule does not permit the participation in community-wide collaborative initiatives, yet counts the use of prospective utilization review toward the MLR, even if it might be used to cut costs rather than improve quality.

For more:
- read the AHA News article
- read the AHA's letter to HHS (.pdf)