Regulators Analyze Quality Expenses

The medical loss ratio recommendations recently sent to HHS by the National Association of Insurance Commissioners (NAIC) spell out the quality improvement expenses regulators believe ought to be recognized as direct care rather than administrative expenses to health plans. Under health reform, the Secretary of HHS is tasked with promulgating uniform cost definitions for health plans beginning in 2011, based on the recommendations of NAIC. The Commissioners propose that quality improvement expenses be limited to the broad goals of improving outcomes and reducing disparities, preventing hospital readmissions, improving safety and reducing medical errors, increasing wellness and enhancing the use of data to improve quality, transparency and outcomes. For each of these goals, NAIC outlines the specific strategies it would approve. These range from medical homes and self-management programs to personalized post-discharge counseling, quality reporting and health information technology expenses. The managed care industry trade association America’s Health Insurance Plans says it is disappointed that the NAIC recommendations don’t recognize fraud prevention and ICD-10 coding implementation as quality initiatives. For their part, consumers are asking HHS to avoid tinkering with NAIC’s recommendations. For a copy of the NAIC recommendations, visit