Today, NAHU testified at the National Association of Insurance Commissioners (NAIC) Fall 2015 National Meeting. During the summer meeting, the commissioners announced that they would revive the Medical Loss Ratio (MLR) Quality Improvements Subgroup, the same subgroup that years ago worked on recommendations to the Department of Health and Human Services (HHS) regarding the MLR calculations and requirements, including what should be considered in the MLR calculations. After five years and significant changes to the health insurance environment, the NAIC believes it is time for a complete review. Commissioners have been named to the working group, an inaugural call for the group was held last month followed by the in-person meeting today, calls will continue through the coming year, and NAHU will be monitoring the revived group every step of the way. NAHU was one of just seven organizations testifying at the committee meeting, joining America’s Health Insurance Plans (AHIP), the American Medical Association (AMA), National Committee for Quality Assurance (NCQA), the Consumer Reports Consumers Union, the Association for Community Affiliated Plans (ACAP), and an NAIC consumer representative. Our testimony is below.
Also at the NAIC meeting, the commissioners are considering the much anticipated model state law on network adequacy, and will formally vote on it on Sunday. The draft Health Benefit Plan Network Access and Adequacy Act was released last week after more than a year of extensive meetings with stakeholder groups, including NAHU, on how to address network adequacy issues particularly with narrow networks. Already, 27 states have network rules that are stricter than federal guidelines, including quantitative, measurable standards such as provider-to-enrollee ratios, and maximum travel times or distances to a certain provider. The NAIC model law includes a process for balance billing and tiered-network justification, recommending that patients be held harmless for certain unexpected bills, and that providers and insurers arbitrate on these claims. This will be the first major revision to the model law in nearly two decades, after it was originally adopted in 1996. Following adoption of the updated model law, the Centers for Medicare and Medicaid Services (CMS) is expected to follow the framework for its 2017 proposed health plan benefit rule, expected later this month, and we anticipate many state legislatures to consider it when they convene next year.
NAHU Testimony on the MLR:
NAHU represents approximately 100,000 health insurance agents and brokers nationally, and the organization is very pleased that the NAIC is undertaking this review of issuer quality improvement (QI) initiatives, as reported annually on the Supplemental Health Care Exhibit Allocation Report and your plans to make updated recommendations to the secretary of the U.S. Department of Health and Human Services on certifiable QI initiatives relative to an issuer’s medical loss ratio reporting.
Health insurance agents and brokers work directly every day with individual and business consumers of healthcare. Ensuring that their clients’ health coverage is high quality and affordable is a top priority of all agents. NAHU members believe that it is critically important that health insurance issuers be encouraged to innovate with regard to quality initiatives so that consumers always see improvements to the health insurance products they purchase and the quality of care they receive. We also believe that a wide range of services and initiatives can help improve the quality of an individual’s or business’s health insurance coverage, including not only initiatives that directly improve health outcomes, but also measures that can help individuals maximize the benefits of their policies, ensure consumer protections and continuous coverage, and access to the most appropriate care. Finally, we believe that investing in and encouraging a wide range of healthcare quality initiatives will help reduce overall medical care costs, which are the primary driver of health insurance premiums. Given that the actual title of the section of the Patient Protection and Affordable Care Act containing the medical loss ratio provisions is titled “Bringing down the Cost of Health Care Coverage,” NAHU members believe that ensuring cost containment should be a key component of certified QI initiatives.
In the five years since the NAIC first made recommendations to HHS on what should constitute a QI initiative with regard to the ACA’s medical loss ratio requirements, the healthcare world and related health insurance coverage options have substantially changed. Not only have we seen the implementation of most of the ACA, but we have also seen advancements in outcomes-based medicine and means of containing healthcare costs through improved patient care and value-based insurance design. Unfortunately, time has also brought us an increased need to protect health insurance consumers against fraud, particularly cyber-fraud, as well as an increased need for consumer service support throughout the plan year as millions of new individuals have entered into the private coverage system for the first time. NAHU believes that when health insurance quality improvement initiatives are being certified, that the criteria used should reflect the current state of the health insurance marketplace.
The current definition being used for QI initiatives, and thus current quality-improvement expenses being submitted by health insurance issuers for medical loss ratio purposes, is based on Section 1311(g) of the ACA, titled “Rewarding Quality through Market-Based Incentives,” which involves incenting quality-based care through qualified health plans and the health insurance exchange marketplace, not the medical loss ratio provisions in Section 2718. There are several reasons why the NAIC and HHS chose to base the definition of quality initiatives on this section of law, not the least of which was that the medical loss ratio provisions of the ACA do not include a definition of an acceptable expense that may be attributed to quality initiatives. Another key consideration was that the elements of the definition used are measurable and targeted at reducing health insurance claims and improving medical care outcomes.
NAHU understands and supports the initial rationale behind the decision to base the current definition on Section 1311(g) of the ACA more than five years ago. However, NAHU also believes that there are many elements that improve the quality of health insurance products, help contain costs and bring value that do not fall within the bounds of the current definition. Furthermore, we want to encourage insurers to innovate and improve on quality initiatives and invest in them initially before it is always clear that they will yield a specific outcome-based result. Insurance is inherently a financial-protection product designed to safeguard the consumer in case of emergency. Consumers place extreme value on the backbone of policies and the essential services that greatly enhance a consumer’s quality experience but yet may not be readily measurable or outcome-driven. Varied examples of these types of quality-improving services include a nurse’s hotline that reduces the number of emergency room visits, enhanced customer service support that allows newly insured and subsidy-eligible consumers to maintain continuous coverage maximize their new benefits, and new protections to medical and financial data to protect consumers from security breaches and other crimes. Given the passage of time and changes to technology, consumer needs and the insurance marketplace, NAHU would support expanding the list of quality initiatives to allow a specific portion of quality expenses attributable to endeavors like these that would improve the strength of an individual or business consumer’s policy but are not as readily measurable. As this committee continues its important work over the next few months, we hope that you will consider including a recommendation of this type to HHS.