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As part of the Administration’s efforts to lower prescription drug costs in Medicaid, the Center for Medicare and Medicaid today issued an Informational Bulletin for states regarding the calculation of Medicaid Managed Care plan’s Medical Loss Ratio (MLR), which represents the percent of premium revenue that goes toward claims and activities that improve healthcare quality.
CMS is concerned that some managed care plans are not accurately reporting pharmacy benefit spread pricing when they calculate and report MLRs. The bulletin will provide additional clarification and specific examples of the regulatory requirements for determining the amounts that can be included as incurred claims in the MLR, particularly when a Medicaid or CHIP managed care plan uses a third-party vendor in a subcontracted arrangement.
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