MAOs Hope for More Clarity on Quota Share Reinsurance

Under Medicare law, Medicare Advantage organizations must assume full financial risk on a prospective basis for the provision of basic benefits provided to enrollees. But certain exceptions exist that allow MAOs to purchase reinsurance, such as excess of loss reinsurance limiting the primary carrier’s liability in excess of a specified dollar “attachment point.” As MAOs seek permissible reinsurance arrangements to manage new risk associated with the coronavirus (see story, above), plans and their actuaries are hopeful that CMS will provide much-needed clarity around the use of quota share reinsurance in a soon-to-be finalized rule, one industry expert tells AIS Health.

Through a proposed rule issued in February (85 Fed. Reg. 9002, Feb. 18, 2020), CMS sought to codify previous policy changes, extend new flexibilities to MAOs and make some major changes to the MA star quality ratings (RMA 2/20/20, p. 1). The rule also included a provision that would define the purchase of reinsurance in a way that CMS hasn’t before. To remove some legal ambiguity mentioned in previous stakeholder comments, CMS said it planned to implement a new exception and “establish in regulation options to use reinsurance for costs beyond a specified threshold.”

© 2021 MMIT

AIS Health Staff

Related Posts

https://www.mmitnetwork.com/wp-content/uploads/2021/10/WordPress-Featured-Image-radar-on-medicare-advantage-Major-Expansions-Rich-Benefits-Will-Drive-Competitive-AEP.jpg
October 7

Major Expansions, Rich Benefits Will Drive Competitive AEP

Read More
https://www.mmitnetwork.com/wp-content/uploads/2021/10/WordPress-Featured-Image-radar-on-medicare-advantage-MCOs-Seek-Individual-Level-Data-to-Pinpoint-Disparities.jpg
October 7

MCOs Seek Individual-Level Data to Pinpoint Disparities

Read More
https://www.mmitnetwork.com/wp-content/uploads/2021/10/WordPress-Featured-Image-radar-on-medicare-advantage-States-Increase-MCO-Demands-Around-Health-Equity-SDOH.jpg
October 7

States Increase MCO Demands Around Health Equity, SDOH

Read More

GAIN THERAPEUTIC AREA-SPECIFIC INTEL TO DRIVE ACCESS FOR YOUR BRAND

Sign up for publications to get unmatched business intelligence delivered to your inbox.

subscribe today