CMS seeks public comment on ICD-10 conversion costs

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The Centers for Medicare & Medicaid Services (CMS) has issued a final rule revising the regulations implementing medical loss ratio (MLR) requirements for health insurance issuers under the Public Health Service Act.

Effective Jan. 1, 2012, the revisions are to address the treatment of “mini-med” and expatriate policies under regulations for years after 2011, modify the way regulations treat ICD-10 conversion costs, change the rules deducting community benefit expenditures and revise the rules governing the distribution of rebates by issuers in group markets.

Regarding mini-med policies, CMS stated, “A graduated allowance for an adjustment…will incentivize issuers to reduce their administrative expenses and operate more efficiently to ensure that they meet the MLR standard while minimizing issuer market withdrawal, maintaining access to coverage for consumers and ensuring that they receive greater value from these policies until 2014.”

The agency plans on publishing the data used in their analysis in the spring of 2012.

“We request further comment on the treatment of ICD-10 conversion costs adopted in this final rule,” the agency continued. “Specifically, we are soliciting comments on whether including as QIA ICD-10 conversion costs as a QIA is appropriate, and if the cap set at up to 0.3 percent of an issuer’s earned premium is an appropriate amount based on past and future ICD-10 conversion expenses.”

Comments will be considered regarding the treatment of ICD-10 conversion costs and the process for providing rebates to group enrollees and reporting of rebates through Jan. 6, 2012.