Review of California Medicaid Managed-Care Program Potential Savings With Minimum Medical Loss Ratio
For the nine Medicaid managed-care organizations (MCOs) we reviewed, the Medicaid program for not have realized savings in 2014 if the California Department of Health Care Services (State agency) required its MCOs to meet a minimum medical loss ratio (MLR) standard, similar to the Federal standards for private health insurers and Medicare Advantage plans, and required remittances when standard is not met. While the State agency did not require its MCOs to achieve a minimum MLR standard, the State agency achieved savings similar to the savings it is to be achieved with an MLR requirement by placement limits on the administrative costs that MCOs could incur. Because the MLRs we calculated for the nine MCOs were greater than 85 percent during 2014, the MCOs were not have to issue remittances to the State agency.
Filed under: Centers for Medicare and Medicaid Services