OIG: Proposed Medicaid MLR standard would save Oregon $10.1 million

The Oregon Medicaid program could have saved $10.1 million in 2014 by requiring all Medicaid managed care organizations to meet a minimum medical loss ratio of 85%, the standard for large group insurers and Medicare Advantage plans under the Affordable Care Act, according to a report released last week by the Department of Health and Human Services’ Office of Inspector General. While Oregon did apply MLR standards to its managed care contracts for Medicaid expansion enrollees and required insurers to issue rebates to the state if the MLR wasn't met, it did not apply MLR standards to its managed care contracts for enrollees eligible under the traditional Medicaid program. In addition, three of 11 managed care plans required to meet an MLR standard had MLR levels of less than 85%, OIG found. The Centers for Medicare & Medicaid Services last June issued a proposed rule that would require a minimum MLR of 85% for Medicaid managed care organizations. The MLR is the percentage of premium dollars an insurer spends to provide medical services and health care quality improvement activities for members.