Insurers gearing up to challenge CMS' Medicaid managed care overhaul

CMS unveiled a regulatory package containing the first major update to Medicaid managed care regulations in more than 10 years this week, and health insurers opposing some of the provisions are planning to challenge the proposed rule before it is finalized, according to a report from The Hill.

The proposed rule incorporates the medical loss ratio — a financial measurement that sets the minimum amount of premium dollars health plans must spend on actual healthcare costs. The goal of the measurement is to cut overhead spending by insurers. The proposed rule would set the MLR at 85 percent, meaning 85 cents out of every premium dollar would be used to on actual healthcare costs.

Regarding the ratio, Jeff Meyers, president and CEO of Medicaid Health Plans, told The Hill he "strongly encouraged CMS not to go down this route" because every state already uses some form of the MLR, and the proposed rule could "destabilize the programs that are developed on a state level." Mr. Meyers said his trade group would be attempting to convince the administration to change the proposal before it is finalized, according to the report.

America's Health Insurance Plans CEO Dan Durham also disagrees with the MLR. "An arbitrary cap on health plans' administrative costs could undermine many of the critical services — beyond medical care — that make a difference in improving health outcomes for beneficiaries, such as transportation to an from appointments, social services, and more," he told The Hill.

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