Within the Medical Loss Ratio (MLR) Division, ER has accumulated some of the leading experts from across the country in the examination and analysis of MLR filings. Our sole focus is providing first class MLR-related services to state and Federal regulators. Since 2017, our MLR Team continues to be contracted with The Center for Consumer Information and Insurance Oversight (CCIIO) to perform all MLR examinations conducted on behalf of the Federal government. Our MLR Team has also assisted numerous states in the performance of MLR examinations, largely assessing MLR filings in compliance with the same federally mandated rules and requirements.

As part of the Affordable Care Act (ACA), the MLR regulation (45 CFR Part 158), requires insurance companies who write healthcare coverage to submit annual reports on the proportion of premium earned that is spent on clinical and quality improvement services, and must pay rebates to enrollees if the MLR does not meet minimum standards (most commonly 80% or 85%). The regulation and filing requirements for MLR are complex and filled with complex requirements and nuances that are often interpreted by insurers in ways not intended by CCIIO.

Through our extensive experience in conducting MLR examinations, the MLR Division’s team has developed the expertise and skills necessary to understand the regulation and other requirements, allowing us to provide assistance to regulators in the continual interpretation of rules, technical guidance and other requirements.

In addition, senior leadership of the MLR Division’s team played an instrumental role in the early implementation of the MLR rules, including leading the establishment and continued maintenance of the standard MLR examination procedures and overall project expectations. This depth of experience allows ER to provide expert assistance to states or other regulators in the establishment of their own MLR examination procedures, or in the interpretation of questions that arise regarding companies’ MLR filings.

MLR Services to Regulators:

• Performance of MLR examinations in accordance with 45 CFR Part 158, including compliance with the NAIC MLR Examination Reporting Instructions or other state specific MLR rules and requirements
• Development of specific MLR examination programs for state examiners
• Training of examiners on the nuances of performing MLR examinations
• Assisting in the design and execution of MLR examinations performed by states in a manner that ensures acceptance by CCIIO
• Assessment of the ability to rely on internal controls to reduce substantive testing of MLR processes and balances
• Identification of companies exhibiting a high risk of inaccurate MLR calculations and/or underpayment of MLR rebates
• Identification of high-risk components within a company’s MLR calculation
• Assessment of market classification in accordance with the Federal definition of group size, which in most cases can differ significantly from state definitions
• Assessment of quality improving activities (QIA), including determination of reasonableness of intercompany cost sharing transactions
• Assessment of Interpretation of MLR regulations, CCIIO technical guidance and MLR Filing Instructions
• Assessment of Pharmacy Benefit Manager (PBM) agreements and determination of spread pricing for prescription drug transactions that may be inappropriate be categorized as incurred claims
• Integration of Medicare Advantage or Medicaid MLR examination procedures

Craig Moore, CFE, CPA (inactive)Director

Craig has 28+ years of experience in audit and insurance company examination services. In addition to…

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