Feb. 18—A proposed rule from the Centers for Medicare & Medicaid Services (CMS) implements the Affordable Care Act’s medical loss ratio (MLR) for Medicare Advantage (Parts A and B) and Medicare prescription drug plans (Parts C and D).
The proposed rule limits how much Medicare health and drug plans can spend on marketing, overhead, and profit. Previously, CMS issued a final rule on the MLR for commercial plans.
Under healthcare reform, Medicare health and drug plans must meet a minimum MLR, beginning in 2014. Plans must spend at least 85 percent of revenue on clinical services, prescription drugs, quality improvements, and/or direct benefits to beneficiaries in the form of reduced Medicare premiums.
Publication Date: Monday, February 18, 2013