Insurers beginning in January will have to spend 80-85 percent of collected premiums on medical services and quality improvements, and there's an enormous looming question (subscription) about what should count toward meeting the requirement.
Should disease management or nurse hotlines count, for example, even though there are administrative costs involved? How much proof must there be of a direct connection between activity and quality improvement?
Exactly how much leeway should insurers have? And are the new medical loss ratio levels fair and achievable, especially in the individual insurance market, where carriers have to pay brokers?
Sen. Jay Rockefeller, D-W.Va., last week warned that some insurers already are gaming the system to get around the rules. A recent Commerce Committee report found that the insurer WellPoint has announced it has started reclassifying such expenses as nurse hotlines, disease management, and clinical health policy as medical rather than administrative expenses.
Rockefeller wants to require insurers to demonstrate that expenses improve health care quality based on the definition of quality-improving activities in the "existing research on health care quality that the Agency for Healthcare Research and Quality has performed in consultation with non-governmental entities."