Commercial Payers → Contracting → Medical Loss Ratio
Medical Loss Ratio
It is anticipated that the National Diabetes Prevention Program (National DPP) lifestyle change program can be accounted for in the numerator of the Medical Loss Ratio (MLR).
The Medical Loss Ratio is the percentage of an insurer’s premium dollars that is spent on medical care and quality improvement activities. For example, if an insurer spends 85 cents of every premium dollar on medical care and quality improvement activities, its MLR is 85%. It is anticipated that the National DPP lifestyle change program can be accounted for in the medical care and quality improvement activity component of that calculation.
Self-funded insurance products do not have a minimum MLR requirement. Self-funded products administered by an insurance company are also excluded from a minimum MLR requirement. However, under the Affordable Care Act, the Centers for Medicare & Medicaid Services (CMS) requires commercial individual and small group products to have at least 80% MLR and large group products to have at least 85% MLR.