New
Mexico Register / Volume XXXI, Issue 14 / July 28, 2020
This
is an amendment to 13.10.27 NMAC, Sections 1, 3, 7, 8, and 9, effective
8/1/2020.
13.10.27.1 ISSUING AGENCY: [New
Mexico Public Regulation Commission, Insurance Division] New Mexico Office
of Superintendent of Insurance.
[13.10.27.1 NMAC
- N, 11/30/2012; A, 8/1/2020]
13.10.27.3 STATUTORY AUTHORITY: Sections [8-8-4,] 59A-2-9,
59A-22-50, 59A-23C-10, 59A-46-51 and 59A-47-46 NMSA 1978.
[13.10.27.3 NMAC
- N, 11/30/2012; A, 8/1/2020]
13.10.27.7 DEFINITIONS: As used in this [definition]
rule:
A. "health
insurer" means a person duly authorized to transact the business of
health insurance in the state pursuant to the Insurance Code but does not
include a person that only issues [a limited-benefit] an excepted
benefit policy intended to supplement major medical coverage, including
Medicare supplement, vision, dental, disease-specific, accident-only or
hospital indemnity-only insurance policies, or that only issues policies for
long-term care or disability income;
B. "direct
services" means services rendered to an individual by a health insurer
or a health care practitioner, facility or other provider, including case
management, disease management, health education and promotion, preventive services,
quality incentive payments to providers and any portion of an assessment that
covers services rather than administration and for which an insurer does not
receive a tax credit pursuant to the Medical Insurance Pool Act or the Health
Insurance Alliance Act; provided, however, that "direct services"
does not include care coordination, utilization review or management or any
other activity designed to manage utilization or services;
C. "health care
plan" [means a nonprofit corporation authorized by the
superintendent of the insurance division to enter into contracts with
subscribers and to make health care expense payments but does not include a
person that only issues a limited-benefit policy intended to supplement major
medical coverage, including Medicare supplement, vision, dental,
disease-specific, accident-only or hospital indemnity-only insurance policies,
or that only issues policies for long-term care or disability income] has
the definition found in Subsection J of Section 59A-47-3 NMSA 1978;
D. "health
maintenance organization" [means any person who undertakes to
provide or arrange for the delivery of basic health care services to enrollees
on a prepaid basis, except for enrollee responsibility for copayments or
deductibles, but does not include a person that only issues a limited-benefit
policy or contract intended to supplement major medical coverage, including
Medicare supplement, vision, dental, disease-specific, accident-only or
hospital indemnity-only insurance policies, or that only issues policies for
long-term care or disability income] has the definition found in
Subsection O of Section 59A-46-2 NMSA 1978;
E. "premium"
[means all income received from individuals and private and public payers or
sources for the procurement of health coverage, including capitated payments,
self-funded administrative fees, self-funded claim reimbursements, and
interests less any premium tax paid pursuant to Section 59A-6-2 NMSA 1978 and
fees associated with participating in a health insurance exchange that serves
as a clearinghouse for insurance; these premiums shall be gross of any
reinsurance] has the definition found in Paragraph (3) of Subsection E
of Section 59A-22-50 NMSA 1978;
F. "individually
underwritten" means any health care policy, plan or contract issued to
an individual or family reflecting the characteristics of the family members
covered; these characteristics include, but are not limited to, place of
residence, age, gender, and health status;
G. "carrier"
[shall mean collectively,] means health maintenance organization,
health care plan, and health insurer;
H. "minimum
medical loss ratio" means the percentage determined in accordance with
section [13.10.27.8 NMAC] 8 of this rule;
I. "health product lines" [mean]
means:
(1) all programs utilized by a health insurer for the offering
of products, including but not limited to:
(a) all private programs, including individual, small group and
large group;
(b) all public
programs, including all Medicaid and Medicare and any related or future
programs or products;
(c) all other arrangements for the procurement of health
coverage, including capitated arrangements, self-funded arrangements; and
(d) such other
programs or arrangements that the superintendent [of the insurance division]
may designate by order or bulletin; but not
(2) programs
of [HIPPA] HIPAA-excepted benefits intended to supplement major
medical coverage, including Medicare supplement, vision, dental,
disease-specific, accident-only or hospital indemnity-only insurance policies,
or policies for long-term care or disability income;
J. "product"
[shall] means any policy, plan or contract related to the
provision of health care services offered, arranged or facilitated by an
insurer, including blanket health insurance; and
K. “blanket health
insurance” has the definition found in Subsection A
of Section 59A-23-2 NMSA 1978.
[13.10.27.7 NMAC
- N, 11/30/2012; A, 8/1/2020]
13.10.27.8 MINIMUM MEDICAL LOSS RATIOS FOR ALL
HEALTH PRODUCT LINES [EXCEPT INDIVIDUALLY UNDERWRITTEN HEALTH PRODUCT LINES]:
A. General requirement. Carriers shall meet the minimum medical loss
ratio established, and in the manner calculated, under this rule.
B. Measurement period. Compliance with the minimum medical loss
ratio shall be measured over a rolling three-year period. The initial measurement period shall be the
years, 2010, 2011 and 2012. Each year
thereafter, the subsequent year shall be added to the rolling three-year period
and the oldest year shall be removed.
For example, the second measurement [year] period shall be
2011, 2012 and 2013.
C. Aggregation. [Loss] Medical loss ratios
shall be calculated on a consolidated level within a state, with experience
allocated to state based upon the situs of the contract. Experience of all affiliates shall be
accumulated to the following levels:
(1) individually underwritten health policies; [and]
(2) [all other] small group policies;
(3) large group policies and all other policies; and
(4) total of all group policies combined.
D. Frequency. [Loss] Medical loss ratios
shall be calculated annually by carriers that issue products through health
product lines, beginning in 2013 covering the period 2010 through 2012.
E. Timeline. [Loss] Medical loss ratios
shall be calculated using claim data incurred during the three-year measurement
period and paid before [April 1] June 30 of the year following
the that period. No adjustment may be
made for incurred but not reported (IBNR) claims. The compliance requirement form set forth in
[13.10.27.9 NMAC] Section 9 of this rule shall be the basis for
the medical loss ratio calculation and will be filed with the [insurance
division] superintendent by [April 15] July 31 of the
year following the measurement period. [This form is first due on April 15,
2013.]
F. Calculation. The numerator of the loss ratio calculation
shall be direct services, as defined by this rule less pharmacy rebates and
incurred or paid claims associated with self-funded plans and capitated
contracts. The denominator of the
calculation shall be premium, as defined by this rule less capitated
contract premiums, self-funded administrative fees, self-funded claim
reimbursements, any premium tax paid pursuant to the Insurance Premium Tax Act,
and fees associated with participating in a health insurance exchange that
serves as a clearinghouse for insurance.
This calculation is deemed to be fully credible due to the three-year
time period used and the aggregation levels required. The New Mexico reimbursements and medical
loss ratios for small group, large group, and all other policies shall be
calculated collectively across all health product lines. The federal reimbursements paid or due
pursuant to 45 CFR Part 158 shall be subtracted from the New Mexico
reimbursement to calculate the final New Mexico reimbursement, which cannot be
lower than zero.
G. Minimum medical
loss ratio levels. [The minimum
loss ratio for individually underwritten health policies shall be 80%. The minimum loss ratio for other policies,
calculated collectively, shall be 85%.] The minimum medical loss ratio
levels applicable to the policy aggregation in Subsection C of this section
shall be as follows:
(1)
the minimum medical loss ratio level for individually
underwritten policies shall be eighty percent;
(2)
the minimum medical loss ratio level for small group
policies shall be eighty percent;
(3) the minimum medical loss ratio level for large group
policies and all other policies shall be eighty-five percent; and
(4)
the minimum medical loss ratio level for the total of
all group policies shall be eighty-five percent.
H. Compliance with minimum medical
loss ratio. With compliance requirement form set forth in
section 9 of this rule, each carrier shall submit to the [insurance
division] superintendent either:
(1) a statement
signed by a qualified actuary that the minimum medical loss ratio
requirements have been met; or
(2) a plan to return excess premium charged make the
required reimbursements to policyholders.
I. Actions required
upon noncompliance with requirements.
[The plan to return excess premiums shall provide prospective premium
credits to each policyholder in the affected segment (i.e., individually
underwritten health policies or all other policies. The premium credits shall cover July through
December of the year following the measurement period. At the end of this period,
and no later than March 31 of the year following the premium credits, the
carrier shall demonstrate that refunds in the required amount have been
made. The prospective refund shall be
made on a per subscriber basis, unless an alternative basis is approved by the
superintendent of the insurance division, and shown separately on the policyholder’s
monthly (or other frequency) bill. This
credit may reflect the family composition of the rating structure used for each
policyholder.] The plan to make
the required reimbursements to policyholders shall provide either prospective
premium credits or refunds to each policyholder who was enrolled in the
affected segment (i.e., individually underwritten health policies, small group,
or all other policies) during the last year of the measurement period and
provide that any such refund for a policyholder be reduced by the amount of any
rebate owing to the policyholder for a medical loss ratio reporting year
pursuant to 45 CFR Part 158 that coincides with such measurement period. The
premium credits or refunds shall be reflected in either a one-time payment or
premium credit or in multiple payments or premium credits. Any such credits or
refunds must be provided no later than the end of December of the year
following the applicable measurement period.
The deadline for reimbursement may be extended if the premium credits
exceed the monthly premiums due by the end of December of the year following
the applicable measurement period. Any
overage may be applied to succeeding premium payments until the full amount of
any refund has been credited. No later
than March 31st of the second year following the applicable measurement period
the carrier shall demonstrate that the refunds in the required amounts have
been made or that premium credits are being applied until such time as the full
amount on the refund has been credited.
The prospective premium credits or refunds shall be made on a per
subscriber basis, unless an alternative basis is approved by the superintendent
of insurance and shown separately on the policyholder's monthly (or other
frequency) bill. This credit may reflect
the family composition of the rating structure used for each policyholder. Any
premium credit or refund to policyholders shall be based only upon the medical
loss ratios calculated for individually underwritten policies and for the total
of all group policies calculated collectively across all group health product
lines.
[13.10.27.8 NMAC
- N, 11/30/2012; A, 8/1/2020]
13.10.27.9 COMPLIANCE
REQUIREMENT FORM:
[Measurement
Period Submitting
Entity: _________________________
January
1, 20xx - December 31, 20xx Covered
Affiliates: _________________________
[Individually
Underwritten Policies All
Other Policies
A Premium $ __________ $
__________
B Self-Funded Claim
Administrative Fees $ __________ $
__________
C Self-Funded
Administrative Fees $ __________ $
__________
D Premium Tax $ __________ $
__________
E Fees Associated with Health
Insurance Exchanges $ __________ $
__________
F Subtotal (A+B+C-D-E) 80.0% $ 85.0%
G Minimum Allowed Loss Ratio $ __________ $ __________
H G x F $ __________ $
__________
I Incurred and Paid Claims* $ __________ $
__________
J Case Management Fees Paid
To Providers $
__________ $.__________
K Disease Management
Fees Paid to Providers $.__________ $
__________
L Health Education/Promotion
Fees Paid to Providers $ __________ $.__________
M Preventive Services $ __________ $.__________
N Quality Incentive Payments
to
Providers $
__________ $.__________
O Assessments** $
__________ $
__________
P Pharmacy Rebates $ ___________ $
__________
Q Subtotal (I+J+L+M+N+O-P) $
___________ $
__________
REFUND DUE (H-Q),
if greater than zero $
__________ $
__________
CALCULATED
LOSS RATIO
(Q
divided byF) __________
% __________ %]
* Includes capitation payments.
** Portion that covers claim costs
rather than administration for which the insurer did not receive a tax credit.]
A. An
Insurer shall use an OSI approved form to submit minimum loss ratios.
B. The form shall
be posted to the OSI website.
[13.10.27.9 NMAC
- N, 11/30/2012; A, 8/1/2020]
HISTORY
OF 13.10.27 NMAC: [RESERVED]