THE MEDICAL LOSS RATIO (MLR) LAW AND HOW ASH IS DOOMED
The Medical Loss Ratio (MLR) Law was passed as part of national health care reform and went into effect January 1, 2011. It prohibits health plans from spending more than 15% of revenues on administration, overhead and profit. If they do so, they will be penalized and fined, and they will be ordered to issue refunds.
According to the most recent financial reports filed with the California Department of Managed Health Care, ASH spends close to 50% of revenues on administration, overhead and profit. This is illegal under the MLR. The federal government is just beginning to create its department to receive complaints. However, states are empowered to investigate potential violations of the MLR and report to the federal government.
ACS contacted the Arizona Department of Insurance (ADOI) and requested they investigate the ASH medical loss ratio. They declined and deferred to the federal government. Therefore, ACS has filed complaints with the California Department of Managed Care requesting an investigation into ASH since Anthem BCBS in California uses ASH as its agent just as Arizona BCBS uses ASH. ACS will report the response from California which is far more active in protecting consumers than ADOI. ACS will pursue enforcement of the MLR in regard to ASH until it is fully enforced including filing complaints directly with the federal government. This itself may unravel the operations of ASH.
To learn about the MLR, here are some resources. Click here http://www.hhs.gov/ociio/regulations/medical_loss_ratio.html for general information for the U.S. Department of Health and Human Services about the MLR. Click here and here for two general articles about the MLR that explain the law in clear and easy to understand language. ASH may be unable to operate with the MLR enforced.
Note: All web links above are active in this online article at http://www.azchiropractors.org/pages/HEALTH-INSURANCE-LAWS,-ISSUES-AND-LITIGATION.php.