Code of Maryland Regulations › Title 10 - MARYLAND DEPARTMENT OF HEALTH › Part 5 › Subtitle 67 - MARYLAND HEALTHCHOICE PROGRAM › Chapter 10.67.04 - Maryland Medicaid Managed Care Program: Managed Care Organizations › Section 10.67.04.19-4 - MCO Medical Loss Ratio

Current through Register Vol. 51, No. 14, July 12, 2024
A. By September
				  1 of the second calendar year following the MLR reporting year, each MCO shall
				  provide to the Department a completed MLR Reporting Template, including the MCO
				  attestation and any additional documentation supporting the MLR reporting
				  template.
B. The MLR experienced
				  for each MCO in an MLR reporting year is the ratio of the numerator, as defined
				  in §D of this regulation, to the denominator, as defined in §E of
				  this regulation.
C. An MLR may be
				  increased by a credibility adjustment, in accordance with §G of this
				  regulation.
D. Components of MLR -
				  Numerator.
(1) The numerator of an MCO's MLR
				  for an MLR reporting year is the sum of the MCO's incurred claims, the MCO's
				  expenditures for activities that improve health care quality, and fraud
				  prevention activities.
(2) Incurred
				  Claims. Incurred claims include the following:
(a) Direct claims that the MCO paid to
				  providers, including under capitated contracts with network providers, for
				  services or supplies covered under the contract and services meeting the
				  requirements of 42 CFR
				  §
													438.3(e) provided to
				  enrollees;
(b) Unpaid claims
				  liabilities for the MLR reporting year, including claims reported that are in
				  the process of being adjusted or claims incurred but not reported;
(c) Withholds from payments made to network
				  providers;
(d) Claims that are
				  recoverable for anticipated coordination of benefits;
(e) Claims payments recoveries received
				  because of subrogation;
(f)
				  Incurred but not reported claims based on past experience, and modified to
				  reflect current conditions, such as changes in exposure or claim frequency or
				  severity;
(g) Changes in other
				  claims-related reserves; and
(h)
				  Reserves for contingent benefits and the medical claim portion of lawsuits.
(3) An MCO shall deduct
				  the following amounts from incurred claims:
(a) Overpayment recoveries received from
				  network providers; and
(b)
				  Prescription drug rebates received and accrued.
(4) An MCO shall include the following
				  expenditures in incurred claims:
(a) The
				  amount of incentive and bonus payments made, or expected to be made, to network
				  providers; and
(b) The amount of
				  claims payments recovered through fraud reduction efforts, not to exceed the
				  amount of fraud reduction expenses, and excluding activities specified in
				  §D(3) of this regulation;
(5) An MCO may include or deduct the
				  following amounts from incurred claims:
(a)
				  Net payments; or
(b) Receipts
				  related to State-mandated solvency funds;
(6) An MCO shall exclude the following
				  amounts from incurred claims:
(a) Non-claims
				  costs;
(b) Amounts paid to the
				  State as remittance under §I of this regulation; and
(c) Amounts paid to network providers under to
				  42 CFR §
													438.6(d).
(7) Non-claims costs as described
				  in §D(6)(a) of this regulation include the following:
(a) Amounts paid to third-party vendors for
				  secondary network savings;
(b)
				  Amounts paid to third-party vendors for network development, administrative
				  fees, claims processing, and utilization management;
(c) Amounts paid, including amounts paid to a
				  provider, for professional or administrative services that do not represent
				  compensation or reimbursement for State plan services or services meeting the
				  definition in 42 CFR §
													438.3(e) and provided to an
				  enrollee; and
(d) Fines and
				  penalties assessed by regulatory authorities.
(8) Incurred claims paid by one MCO that are
				  later assumed by another MCO shall be reported by the assuming MCO for the
				  entire MLR reporting year, and no incurred claims for that MLR reporting year
				  may be reported by the ceding MCO.
(9) An MCO shall include activities that
				  improve health care quality in one of the following categories:
(a) An MCO activity that meets the
				  requirements of 45 CFR
				  §
													158.150(b) and is not
				  excluded under 45 CFR §
													158.150(c);
(b) An MCO activity related to any
				  EQR-related activity as described in
				  42 CFR §
													438.358(b) and (c);
				  and
(c) Any MCO expenditure that is
				  related to Health Information Technology and meaningful use, meets the
				  requirements placed on issuers found in
				  45 CFR §
													158.151, and is not considered incurred
				  claims.
(10) Excluding
				  expenses for fraud reduction efforts in §D(4)(b) of this regulation, an
				  MCO shall include expenditures on activities related to fraud prevention as
				  adopted for the private market at 45 CFR part 158.