MGMA, In Conflict With Clinical Care

To ensure reduction of excessive administrative costs, the health reform law orders that insurers spend a minimum amount of revenue from premiums on payment for clinical care.

The American Hospital Association wrote that only expenses to licensed medical professionals or entities for healthcare services should be classified as "reimbursement for medical services," under the forthcoming rules, and that what qualifies as quality-improvement activities should be determined using a "decision-tree analysis."

Insurers now are negotiating with federal regulators on what activities will be counted as administrative and which of those actions could be measured as clinical functions beyond treatment, such as defensive and disease management programs.

The Medical Group Management Association is recommending that calculations of insurers' medical loss ratio include, as an element of the insurer's administrative cost, claims payment administrative expenses incurred by providers.

"Insurers' failure to adopt simplified, standardized, automated processes for administrative transactions involved in claims payments results in significant unnecessary administrative costs to all categories of providers. Failure to include these costs in the medical loss ratio definition deprives practices and ultimately their patients of resources that should be allocated towards patient care".