OIG Files: A Little Silver Lining

August 26, 2022

A phrase that does not often come up is “medical loss ratio,” or MLR.  As an OIG Agent, I spent very little time looking at the OIG Workplan (I’ve blogged and spoken about how OIG Agents follow the current frauds, and how the plan is very much used to direct the work of the Office of Audit Services and the Office of Evaluations and Inspections).  So to, I also spent very little time learning and reading about the financial aspects of healthcare fraud.

In career 2.0, also now known as my employment encore, I am exploring a variety of new areas, MLR being one of them.  Under the Affordable Care Act, payers have to work to ensure that as much as 85% of the monies paid in premiums go towards the costs of care; percentages vary based on plan type.  

This actually intersects with FWA in a very important way, as recoveries of FWA monies can then be used (in theory) to provide better, or expanded benefits for the membership of the plan.  As this article reflects, individuals can hope to see a small rebate based upon various calculations on the MLR, and overpayments made by plan members. Of course, as an FWA person, it did make me wonder how this has no applicability to Medicare. 

The program is in horrible financial condition, and will be insolvent in the coming few years. There does not appear to be any real plan on what will transpire when that happens.  

The new legislation that will allow drug pricing negotiations for Medicare does not immediately take effect, and does not cover all drugs reimbursed under Part D.  While it’s good news during these stressful financial times to see these rebates, it is also very important to have a driven focus on curbing the unprecedented volume of FWA that seems to be in the news on a daily basis.  The data is there, and we are continuously looking to enhance the FWA efforts out there, yet we always see another fraud scheme where we say, “but why?”

My hope in the near future is that metrics aren’t predicated upon a calculation of how much should be devoted to plan benefits, and more about how we can ensure that proper payment is made to keep those benefits intact.

By Eric Rubenstein

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