CALIFORNIA DEPARTMENT OF MANAGED CARE RELEASES ASH INVESTIGATION LETTER REGARDING MEDICAL LOSS RATIO (MLR) LAW
INVESTIGATION TRIGGERED BY ACS COMPLAINTS
The California Department of Managed Health Care has just released a formal letter documenting that it has initiated a "non-routine" investigation into American Specialty Health (ASH) regarding possible violations of the state Medical Loss Ratio (MLR) law. To read the letter, go to www.AZChiropractors.org and scroll down to the section on Breaking News.
ASH is a subsidiary of ASHN which is a licensee of the California Department of Managed Care and so subject to the state MLR. This law requires plans including ASH to spend at least 85% (in special circumstances 75%) of revenues on patient care, and no more than 15% (special cases 25%) on overhead and profit.
According to ASH financial statements which are posted on the ACS webpage next to the California letter, the ASH MLR is approximately 50% which appears to be a clear violation of the California MLR. It is for this reason that a "non-routine" investigation was launched immediately upon receipt of complaints from ACS.
The outcome of the investigation will be reported by ACS as soon as it becomes available. It appears inevitable that ASH will be found in serious violation and ordered to pay fines and refunds.
To inform you about the MLR, ACS has written an article entitled: The Medical Loss Ratio (MLR) Law and How ASH is Doomed. This report is posted on the ACS webpage at http://www.azchiropractors.org/pages/HEALTH-INSURANCE-LAWS,-ISSUES-AND-LITIGATION.php, #3.
When ASH is forced to spend no more than 15% to 25% on overhead and profit instead of the current 50%, much more money will be available to pay to doctors for their services rather than to the many "babysitters" hired to oversee the treatment of every chiropractic patient. This is as it should be.
It is wrong that 50% of premium dollars is being spent on overhead and profit and not patient care, and this is why laws were passed to ban such outrageous percentages. Much more of this money must and will be spent on patient care thanks to the complaints filed by ACS and the upcoming enforcement action by the California Department of Managed Care. ASH will be unrecognizable when it can only spend 15% rather than 50% on overhead and profit. Prepare for major change, brought to you by ACS. If you are not a member, please join or donate to continue to make this work possible.