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CMS issues proposed MLR rule, payment changes for MA plans

February 19, 2013

The Centers for Medicare & Medicaid Services Friday issued a proposed rule implementing medical loss ratio requirements for Medicare Advantage and Medicare prescription drug plans under the Patient Protection and Affordable Care Act. Beginning in 2014, the law requires Medicare health and drug plans to spend at least 85% of revenue on clinical services, prescription drugs, quality improvements or direct benefits or face financial and other penalties. CMS will accept comments on the proposed rule for 60 days. The agency also issued for public comment through March 1 an advance notice of proposed MA payment and policy updates for 2014.