Epstein Becker Green Introduces Comprehensive “Scorecard” to Analyze the Federal and State Health Insurance Rate Review Landscape

New York (September 14, 2011) — As the federal Department of Health and Human Services (HHS) and state regulators begin mandated reviews of health insurance rate increases, the nationally recognized health care law firm Epstein Becker Green has created a unique interactive scorecard to track federal and state administration of these rate review programs.

Epstein Becker Green National Health Insurance Rate Review ScorecardEBG's comprehensive National Health Insurance Rate Review Scorecard provides easy to use, up-to-date information on the applicable rate increase thresholds, the agencies responsible for rate review, standards for determining an "unreasonable" rate increase, authority to disapprove rates, and required minimum medical loss ratios under federal law and for each state and territory. The Scorecard offers insurance carriers, lawyers, and other stakeholders an essential resource on federal and state health insurance rate review programs.

As part of its review of individual state processes, EBG's Rate Review Scorecard demonstrates that:

  • While regulation of what is considered unreasonable rate increase is mandated by the Patient Protection and Affordable Care Act (PPACA), in a vast majority of cases, responsibility for this oversight falls to the individual states.
  • The standards and regulatory authority currently in place vary considerably from state to state -- insurers are likely to find that proposed increases at the current federally-imposed minimum threshold level of 10-percent will be deemed "unreasonable" and even rejected in some jurisdictions, while much larger proposed rate increases are deemed acceptable in other jurisdictions.
  • The rate increase thresholds requiring review under the new federal regulation will soon be set on a state-by-state basis, with the likelihood of even greater inconsistency between jurisdictions. Some states have, or will soon have, their own rate review thresholds independent of the federal standard.

Currently, rates impacting 44 states (as well as the District of Columbia and one U.S. territory) will be reviewed by the regulators in those states, while rates assessed in the remaining states currently are to be reviewed by the Center for Consumer Information & Insurance Oversight (CCIIO), which is part of the Centers for Medicare and Medicaid Services (CMS). Proposed increases subject to review, and the data underlying them, will be publicly disclosed and require public justification by the issuer.

"This analysis of each state and the individual oversight each brings to the issue of whether a rate increase is not "unreasonable" comes at a critical juncture in the implementation of federal health reform on a state level," said Lynn Shapiro Snyder, a Senior Member of the Firm in the Health Care and Life Sciences and Litigation practices.

Jesse M. Caplan, a Member of the Firm in the Health Care and Life Sciences practice, who with Snyder developed the innovative Scorecard, added that, "Insurers and other stakeholders are likely to find the segmented and inconsistent rate review regulatory landscape a challenge to navigate successfully. We believe that our interactive Rate Review Scorecard is an invaluable tool to assist in achieving compliance with this process."

The Scorecard is a natural outgrowth of federal efforts to take a more aggressive approach in monitoring health insurance rate increases. In May, CMS published its Final Rule on this subject. PPACA required HHS to establish a process for the review of "unreasonable" health insurance premium rate increases in the individual and small group health insurance markets.

The Final Rule requires health insurance issuers serving these markets with premium rate increases meeting or exceeding certain thresholds (10 percent for 2011-2012) to submit justification for, and information about, those rate increases to both CMS and the applicable state for an examination and determination as to whether those rate increases are reasonable.

In addition, CCIIO released its list of states with effective rate review programs. Increases that impact states with effective rate review programs will be reviewed by those states, while those increases in states determined not to have effective rate review programs will be reviewed by CMS. With the publication of the agency's list, health insurance issuers can better determine which government agencies are responsible for reviewing their individual and small group health insurance rate increases and what standards will be applied when determining whether such increases are unreasonable. The Final Rule applies to any new rate increases filed or effective on or after September 1, 2011.

About Epstein Becker Green:

Epstein Becker & Green, P.C., founded in 1973, is a national law firm with approximately 300 lawyers practicing in 10 offices, in Atlanta, Boston, Chicago, Houston, Los Angeles, New York, Newark, San Francisco, Stamford, and Washington, D.C. The Firm is uncompromising in its pursuit of legal excellence and client service in its areas of practice: Health Care and Life Sciences, Labor and Employment, Litigation, Corporate Services, and Employee Benefits. Epstein Becker Green was founded to serve the health care industry and has been at the forefront of health care legal developments since 1973. The Firm is also proud to be a trusted advisor to clients in the financial services and hospitality industries, among others, representing entities from Fortune 100 companies to startups. Our commitment to these practices and industries reflects the founders' belief in focused proficiency paired with seasoned experience. For more information, visit www.ebglaw.com.