By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    healthcare cybersecurity
    4 Helpful Tips on How to Protect Your Medical Practice Against Cyber Attacks
    October 24, 2021
    Health Check Diagnosis Medical Condition Analysis Concept
    6 Health Woes With Online Remedies
    January 19, 2022
    Eight Things Men Should Know About the Male Menopause
    Eight Things Men Should Know About the Male Menopause
    April 24, 2022
    Latest News
    5 Self-Care Habits to Help You Live an A+ Life
    September 21, 2023
    Keep Employees Safe & Healthy By Reducing Warehouse Injuries
    September 20, 2023
    What is Pneumonia? Causes, Treatment, and Care
    September 19, 2023
    Navigating Through the Essentials: Medical Billing Training for Beginners
    September 12, 2023
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    BHM Healthcare Solutions can help you improve your measures - call 1-888-831-1171 today or email results@bhmpc.com
    Why the U.S. Healthcare System Ranks Worst in the Developed World
    July 15, 2014
    Just One NAFTA Country Lacks Universal Health Care
    August 18, 2012
    hospital and community
    Making the Hospital Part of the Community
    October 6, 2014
    Latest News
    Job Seekers with Disabilities Should at Health Insurance Benefits
    September 12, 2023
    Reasons That Drug Prices Are Rising to Unsustainable Levels
    September 12, 2023
    How Revenue Lifecycle Management Helps Healthcare Providers to Optimize Business Operations
    September 6, 2023
    The Hidden Benefits of Practice Exams for Medical Professionals
    September 6, 2023
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: Cutting Costs Through the Medical Loss Ratio & Independent Review Organizations
Share
Sign In
Notification Show More
Aa
Health Works CollectiveHealth Works Collective
Aa
Search
Have an existing account? Sign In
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Business > Cutting Costs Through the Medical Loss Ratio & Independent Review Organizations
Business

Cutting Costs Through the Medical Loss Ratio & Independent Review Organizations

DanyellJones
Last updated: 2015/09/10 at 2:53 PM
DanyellJones
Share
7 Min Read
Cutting Costs through IROs, medical loss ratio, healthcare
SHARE

Cutting Costs through IROs, medical loss ratio, healthcareHealthcare spending is on the rise. The federal government has begun several initiatives to control costs, increase efficiency, and increase quality. A couple of these initiatives as outlined in the ACA are the Medical Loss Ratio and the increased prominence of Independent Review Organizations.

Contents
Cutting Costs Through MLRsCutting Costs Through IROs The Benefits of External an IROAre you in need of an IRO?

Cutting Costs through IROs, medical loss ratio, healthcareHealthcare spending is on the rise. The federal government has begun several initiatives to control costs, increase efficiency, and increase quality. A couple of these initiatives as outlined in the ACA are the Medical Loss Ratio and the increased prominence of Independent Review Organizations.

As we all know, healthcare costs are skyrocketing. The US government is trying to look at healthcare spending from all angles in an effort to control costs while increasing quality. It has become a balancing act. One such measure, be drastic as it may, is the Affordable Care Act (ACA), a.k.a. Obamacare. This monumental legislation was enacted in 2010 with provisions becoming effective through 2015 and beyond. The provisions of the ACA were designed with these 2 goals in mind: reduce costs and increase quality. Two provisions of particular interest are: the Medical Loss Ratio and the enhanced presence of Independent Review Organizations (IROs). Both are designed to add efficiency, reduce waste, and control administrative costs for a currently broken healthcare system.

Cutting Costs Through MLRs

Untitled designOne such initiative is to reduce the percentage of premiums collected as they relate to the administrative portion of costs, which includes marketing and profits. This is referred to as the Medical Loss Ratio (MLR). The basic concept is to set a threshold percentage to insurance companies for their proportion of expenses applied to administrative duties. If these percentages are exceeded, the insurance company is required to issue rebates to its members/employers for the amount which was exceeded. The amount designated to each individual is in direct proportion to the amount of premiums paid as they relate to the total premiums received by the insurance company. The old saying “check is in the mail” certainly rings true. You have probably been one of these recipients. You may have even received a refund that was less than the postage to mail. It is interesting to note, that the total premium received includes premiums from grand-fathered plans which are exempted from many provisions of the ACA. The total also includes both individual and group plans. Insurers are required to notify enrollees generally in June that a rebate will be issued with an issue deadline of August. The MLR may or may not be taxable depending upon many factors. The current MLRs are 85% for large plans and 80% for small plans meaning the administrative costs cannot exceed 15% or 20% respectively. Currently, plans have MLRs as high as 70% or 75%, so there is a lot of rebating occurring. MLRs began being issued in 2012 and we would expect the ratios to be adjusted over the next several years based upon national averages and amounts being rebated.

More Read

get a career in medical device sales

What Are the Benefits of Attending Medical Sales College?

Subscription Management Solutions Are Crucial for Telemedicine
Comfort And Safety: 7 Ways Healthcare Organizations Can Create A Better Environment For Their Patients
4 Points to Remember Before You Start Off Your Next Medical Presentation
Best Practices for Healthcare Call Centers Should Follow in 2023

Cutting Costs Through IROs

costs signIROs are designed to provide unbiased physician reviews to insurance companies for claim appeals basing decisions on medical necessity criteria. Companies spend a considerable amount of money on claim appeals annually. Many companies try to save money by performing these reviews in-house. The reality is that cost savings can be gained by outsourcing the IRO function. IROs are intermediaries that serve to benefit both insurance payers and patients – a delicate balancing act to be sure.

 

starThe Benefits of External an IRO

  • Can handle large volumes of claims in a timely manner
  • Decisions are based upon  a standard set of medical necessity criteria
  • Access to a larger array of physician specialties, especially for complex cases
  • Reviews are provided by a neutral 3rd party with no affiliation or bias
  • Access to a reviewers covering most or all of the United States
  • Reduced cost due to standardization and quick turn-around times
  • Medical Directors and Physicians can concentrate on patient care rather than claim reviews
  • Medical necessity as it relates to new procedures such as cancer treatments, spine surgeries, and ICD implementations
  • Deeming procedures which used to be considered cosmetic surgery and therefore not medically necessary as perhaps medically necessary in certain circumstances. One such example is bariatric surgery for obesity. Can be deemed medically necessary as it threatens patient’s health, shortens lifespan, and can cause additional health issues such as high blood pressure and heart problems.
  • Access to experts who are on the cutting edge of new information/research/findings as it relates to their specialty
  • Peace of mind in regard to compliance at both federal and state levels
  • Peace of mind in regard to URAC accreditation
  • Documentation from and IRO can be admitted into the medical record

The benefits of IROs are becoming more prominent. Why not outsource to the experts and concentrate on providing excellent customer service and clinical patient care? The efficiency which can be gained will severely reduce the administrative costs attributed to healthcare, which lends itself to the MLR as indicated above. These 2 provisions go hand in hand. When used in conjunction, you can start to see a dramatic increase in your bottom line.

Are you in need of an IRO?

BHM Healthcare Solutions is a URAC-accredited IRO, with designations for both internal and external IRO services. BHM has a state of the art physician portal which automates the process to provide efficient, accurate decisions based upon medical necessity criteria. BHM has licensed physicians in just about all specialties as well as licensed in every state. Contact us today for a free consultation to see how our IRO services can benefit you or download our free white paper to explore the benefits of external IRO services for the provision of Peer Reviews.

 

The post Cutting Costs Through the Medical Loss Ratio & Independent Review Organizations appeared first on BHM Healthcare Solutions.

Sign Up For Daily Newsletter

Be keep up! Get the latest breaking news delivered straight to your inbox.
By signing up, you agree to our Terms of Use and acknowledge the data practices in our Privacy Policy. You may unsubscribe at any time.
DanyellJones September 10, 2015
Share This Article
Facebook Twitter Copy Link Print
Share
Previous Article DocResponse Healthcare Technology and the DocResponse Revolution – Meet Your New Best Friend in Healthcare
Next Article Remembering 9/11. How a Cardboard Box Pays Tribute to 9/11

Stay Connected

1.5k Followers Like
4.5k Followers Follow
2.8k Followers Pin
136k Subscribers Subscribe

Latest News

abdominal pain
The Impact of Abdominal Pain on Female Health
Women Health September 20, 2023
5 Self-Care Habits to Help You Live an A+ Life
Health September 20, 2023
warehouse worker health and safety
Keep Employees Safe & Healthy By Reducing Warehouse Injuries
Health September 20, 2023
self-care tips for nurses
Self-Care is Critical for NICU Nurses, Here’s Why
Nursing September 19, 2023

You Might also Like

medical billing training
Medicare

Navigating Through the Essentials: Medical Billing Training for Beginners

September 12, 2023
healthcare providers
Hospital Administration

How Revenue Lifecycle Management Helps Healthcare Providers to Optimize Business Operations

September 6, 2023
optimize healthcare business
News

Top Tips To Optimize Operations In Your Healthcare Office

June 30, 2023
Endocrinology
Hospital Administration

Improving Endocrinology Revenue Recovery is Crucial

June 14, 2023
Subscribe

Subscribe to our newsletter to get our newest articles instantly!

Follow US
© 2008-2023 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Lost your password?