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Q&A: MA Lawmaker on Cost Containment

Margaret Dick Tocknell, for HealthLeaders Media, August 22, 2012

Q. Health plans are removed from the actual delivery of care, so what can they do to affect the cost of care?
A. Look at Blue Cross Blue Shield of Massachusetts, which is half of the insurance market in the state. It provides quality contracts that set standards for providers. The providers only receive higher payments if they improve the quality of care without increasing the cost of care.

We created a standard for the medical loss ratio (MLR) that's higher than the federal standard in the Affordable Care Act .It's 90% now and will be reduced to 88%. Most insurers have reduced their administrative costs to meet the MLR although some have paid rebates. They have substantial incentive to be part of the solution.

Q. Are you concerned that health plans could adopt gatekeeper models and require a lot of pre-authorizations for care?
A. We've done several things to try and minimize that potential. In our 2008 amendments to the reform law we went to uniform billing and coding. With this latest bill, we provide penalties so some stragglers will complete those tasks.

Now we require standardized preauthorization procedures. Plus, we have an established internal and external appeals process so a plan can't deny a procedure just to save money. They have to follow best practices.

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