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By Sara Hansard
Sept. 23 — Some health insurers will have until Oct. 30 to distribute medical loss ratio (MLR) rebates for 2014, the Centers for Medicare & Medicare Services said in guidance posted Sept. 18.
Issuers that had to revise MLR and risk corridors data may not be able to distribute the MLR rebates by the Sept. 30 deadline, the CMS said in the guidance. Issuers won't be out of compliance with the MLR deadline for 2014 if the rebates are disbursed by Oct. 30, it said. Citing “discrepancies” in data submitted for the MLR and the ACA's risk corridors program, the CMS required some insurers to resubmit the data in August and September.
Under the Affordable Care Act's MLR requirement, health insurers must spend a minimum amount of premiums on medical claims or quality improvements; if they don't meet the ratio, they must refund the difference to consumers. The risk corridors program is one of three risk adjustment programs set up under the ACA to help protect some insurers that attracted sicker-than-average enrollees. The risk corridors calculation and the MLR use the same formula.
The CMS said in an Aug. 7 notice that while conducting quality assurance of the risk corridors data it identified a “significant number of discrepancies in the data, which makes it necessary to conduct additional data validation”.
Health insurers submitted data for the first time July 31 in connection with the ACA's temporary risk corridors program, which is in effect from 2014 through 2016.
The CMS released a report June 30 on payments made for the transitional reinsurance program and the permanent risk adjustment program for 2014, which didn't include the risk corridors program. The CMS released an updated version of the report Sept. 17.
New consumer-directed “co-op” health insurers created under the ACA and small, low-cost insurers with narrow provider networks are among the plans hardest hit by the risk adjustment program, which was set up under the law to stabilize premiums and ensure that plans that cover a high share of sick people aren't put at a disadvantage.
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