Medical loss ratio (MLR) in the “Mega Reg”

Medical loss ratios (MLRs) will become a required part of financial reporting for Medicaid managed care programs in every state, effective for managed care contracts beginning on or after July 1, 2017. While the Medicaid MLR formula itself largely follows the commercial and Medicare Advantage (MA) MLR formula, by including quality improvement expenses in the numerator and excluding most fees and taxes from the denominator of the calculation, there are key differences between the Medicaid minimum MLR standards and those currently established for the commercial and MA markets. Unique features of Medicaid managed care programs will necessitate state Medicaid agencies and Medicaid managed care organizations to consider several issues in the development and completion of MLR reporting.