Insurers Scrambling To Get Expenses Defined As Patient Care

The New York Times looks at current efforts by state insurance officials to set regulations requried under the new health overhaul about insurance company spending. "The legislative battle over the health care overhaul ended months ago, but it is hard to tell from the intense effort now under way by insurance companies to retool a critical provision. The law requires health insurers to spend at least 80 cents out of every dollar they collect in premiums on the welfare of patients, a critical issue for the companies' bottom lines. But state regulators are only now deciding what precisely that means, as they draft the rules to enact the law. WellPoint, which operates Blue Cross plans in more than a dozen states, wants to include the cost of verifying the credentials of doctors in its networks. Insurance companies like Aetna argue that ferreting out fraud by identifying doctors performing unnecessary operations should count the same way as programs that keep people who have diabetes out of emergency rooms. ... The calculation of what is called the medical-loss ratio is crucial to insurance companies, because the law requires them to refund money to consumers if they spend too much on administrative costs. ... The debate has escalated in recent weeks as the National Association of Insurance Commissioners, which represents the state regulators, is expected to submit a final draft of its work as soon as next month to Kathleen Sebelius, the secretary of health and human services, for certification" (Abelson, 7/24).