Academy Activities

The Academy’s Health Practice Council recently released a new issue brief, Risk Assessment and Risk Adjustment. The issue brief provides an overview of risk adjustment, outlines how it is currently used in the health care industry, and discusses general issues to consider when determining how to implement risk adjustment under the Patient Protection and Affordable Care Act (PPACA).

The Academy’s Joint Committee on Retiree Health provided comments on June 3 to the Department of Health and Human Services on the interim final rule implementing a temporary reinsurance program for early retirees under Section 1102 of PPACA. The letter provides comments on the data requirements to file a reinsurance program, the requirement to project expected reimbursements for the first two years of the program, and the allocation of funding on a first-come, first-served basis.

The Academy’s Medical Loss Ratio Regulation (MLR) Work Group provided comments on June 7 to the National Association of Insurance Commissioners (NAIC) regarding the potential inclusion of a change in contract reserves in the numerator of the MLR rebate calculation. The letter discusses the need to consider contract reserves as a component of MLR to account for durational MLR variation in a market in which pricing is often based on lifetime MLR rather than annual MLR.

Legislative Updates

Health and Human Services (HHS) Secretary Kathleen Sebelius announced on Monday the availability of $51 million in Health Insurance Premium Review Grants through the Patient Protection and Affordable Care Act (P.L. 111-48). In order to receive a grant, a state must submit a plan for how it will use grant money to develop or improve its method of reviewing and approving, disapproving, or modifying health insurance premium requests. During the first year of the five-year grant program, states with successful applications will receive a $1 million grant.

The Senate resumed consideration on Tuesday of a revised version of the tax extenders bill (H.R. 4213) that the House passed on May 21. The bill delays until the end of 2011 the Medicare physician reimbursement rate reductions and also would reverse the 21 percent cut to Medicare physician payments that took effect on June 1. The Senate is expected to vote on the bill early next week.

In the News

Academy Senior Health Fellow Cori Uccello discussed medical loss ratio (MLR) requirements in an article in the June 4 New York Times. Also cited in the article was the Academy MLR Work Group’s April 28 letter to the NAIC regarding the potential disruption to the individual health insurance market resulting from new MLR requirements.

The Academy’s critical issues paper on the Community Living Assistance Services and Supports (CLASS) Act was cited in a column in the June 1 edition of Kiplinger’s Personal Finance. The actuaries wrote that actuarially sound premiums for the new long-term care program could range from $125 to $160 per month.

Robert Parke of the Academy’s Disease Management Work Group was quoted in the June 8 New York Times. Parke said that savings from disease management programs are offset by the costs of managing the programs — but are still worthwhile because they enhance the quality of care.

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