Tuesday, June 18th, 2024 

Health Insurance the Next Two Years

Financial Reporting “How will the Patient Protection and Affordable Care Act affect insurance companies?”

Over the next two years, the Patient Protection and Affordable Care Act (“PPACA”) will negatively impact all insurance companies. The impact, with planning, is manageable.

The near term critical concerns are the impact of new medical loss ratio requirements; the extent that Medicare Advantage (“MA”) reimbursement rates are reduced; and, compliance with the “Health IT Superhighway” infrastructure and data requirements. The concerns can be reduced to a series of questions:

  • Are your information systems being converted to ICD-10 diagnostic coding?
  • Have your information systems transmission standards been converted to HIPAA-5010 standards?
  • Have you adopted the amended HIPAA Privacy and Security mandates?
  • Are your systems prepared for the increased regulation and reporting on benefit design and premium rate setting?
  • Have you calculated the impact of mandated medical loss ratios on your net income?
  • Have you modified your operating and financial processes for the reduction in Medicare Advantage reimbursement?
  • Have you developed your strategy to obtain incentives for bonus payments based on performance-based criteria?
  • What technology and process changes do you need to make to ensure compliance with new reporting requirements and HIPAA standards, and a commitment to quality and care management to providers and customers?

Depending on your answers, the next step is to perform a strategic and technical assessment of the changes. Creating both the value of the change compared to the cost is crucial. A cost /benefit analysis will be an important tool to creating your Health Care Reform roadmap. It also will help management to determine the level of compliance the insurer is willing to adopt.

There will be rich rewards for insurers that control costs, maintain quality, and provide highly coordinated services across care continuum.

Contact HRMSI to discuss the impact of Health Care Reform Act on your entity. We have a multi-disciplinary network of senior-level accounting, actuary, medical, IT, and tax professionals who have insurance and health care experience. Our professionals can assist you in making the prompt assessments to transform your business. Let HRMSI assist you in evaluating your PPACA needs and providing innovative and effective solutions to keep your company growing and prospering. Contact us at (630) 243-0117 or MFischer@riskinc.net.

© 2006-2024 HRMSI - Health Insurance the Next Two Years