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AHA shares views with NAIC on PPACA medical loss ratio provision

June 2, 2010

The AHA today shared with the National Association of Insurance Commissioners its views on the Patient Protection and Affordable Care Act's medical loss ratio provision, which requires that a minimum percentage of health insurance premiums be used to pay for health care services or activities that improve health care quality for enrollees. In a letter to the NAIC, the AHA said regulations implementing the provision should ensure that: only payments to licensed professionals and entities are classified as health care services; costs and expenses classified as quality improvement activities meet specific criteria; and loss adjustment activities are counted as administrative costs. In addition, the regulations "must clearly define which activities do and do not improve health care quality and restrict the ability of health insurers to subjectively make such a determination," the letter states. The AHA is working with its state hospital association partners to ensure that the hospital field's views are considered as the NAIC drafts its recommendations to the Department of Health and Human Services, and encourages hospital leaders to quickly contact their state association to find out how to best weigh in with their state insurance commissioner. The NAIC yesterday notified HHS that it would not meet the agency's request for the recommendations by June 1. It is expected to submit the recommendations this summer.