Medical Loss Ratio

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Executive Summary

The healthcare industry is undergoing a significant transformation, moving away from volume-based care towards value-based models that prioritize patient outcomes and cost efficiency. This issue brief delves into delta MLR contracting, a type of value-based contracting that measures and rewards improved performance based upon incremental improvements in medical loss ratio. 

Delta MLR contracting is the next chapter on the way to full risk delegation, aiming to improve medical loss ratios by reducing unnecessary utilization through innovative tech-enabled care delivery transformations and offering the potential for future revenue increases for providers who achieve improved quality and appropriately document and code clinical conditions for accurate risk adjustment.

Medical Loss Ratio (MLR) refers to the percentage of premiums payers spend on medical claims and healthcare quality improvement, as opposed to administrative costs and profits. Delta MLR contracting presents an innovative framework for population health providers and virtual care organizations to align to the clinical and operational value created for risk bearing entities. Below we discuss the necessary emphasis in delta MLR contracting on the integration of documentation and coding practices, data, actuarial analytics, quality initiatives, and medical management. We also focus on the need for full financial alignment of virtual care solutions and risk bearing entities in achieving the Quintuple Aim.

By focusing on these elements, innovative providers can enhance patient outcomes, optimize financial performance, and navigate the complexities of value-based care more effectively. Continue Reading Delta MLR Contracting: Integrating Risk, Quality and Affordability

Federal agencies are signaling closer oversight of Medicaid managed care organizations (“MCOs”). On August 21, 2018, the U.S. Comptroller General Gene Dodaro and Centers for Medicare and Medicaid Services (“CMS”) Administrator Seema Verma testified to the Senate Homeland Security and Governmental Affairs Committee about combating Medicaid fraud and urged additional oversight of Medicaid MCOs and a larger restructuring of the Medicaid program. This testimony follows other steps taken by the Governmental Accountability Office (“GAO”) and CMS earlier this year to encourage increased scrutiny of Medicaid managed care programs.
Continue Reading GAO and CMS Seek Increased Scrutiny on Medicaid Managed Care Organizations