Insurers lobby to amend MLR rule

Fighting fraud shouldn't count as administrative costs under the reform law's medical-loss ratio (MLR) provision, insurers told the U.S. Department of Health & Human Services last week, according to Bloomberg.

Several private payers, including UnitedHealth, the Blue Cross Blue Shield Association (BCBSA) and WellPoint, last week announced a public-private initiative to share claims data to help combat fraud.

After HHS announced the initiative, several insurance executives lobbied to amend the MLR rule, which requires insurers spend 80 percent of revenue on medical care to classify anti-fraud efforts as medical costs.

Changing the rule "would make it easier for the industry to do the most that they can," Richard Migliori, executive vice president of health services at UnitedHealth Group, told Bloomberg. "Anything we do to prevent fraud counts as administrative costs."

The Blue Cross Blue Shield Association (BCBS) agrees, claiming that the MLR rule currently discourages insurers from investing in fraud prevention and detection. "You don't want to have a disincentive for people to allocate appropriate resources on fraud," Alissa Fox, who oversees BCBS lobbying and policy, said in an interview with Bloomberg. "You don't know how much you're going to recover until you recover it."

But not everyone thinks changing the MLR rule is a good idea. "There's lots of things that insurance companies can do to improve the delivery of care and to reduce the cost of care," said Ethan Rome, executive director of political coalition Health Care for America Now!. "But those things should not be counted as medical care."

To learn more:
- read the Bloomberg article

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