Under the Affordable Care Act (ACA), and implementing regulations at 42 CFR, Medicare Advantage (MA) organizations and Prescription Drug Plan (PDP) sponsors are required to submit annual medical loss ratio (MLR) reports (at the contract level) to the Secretary of HHS concerning the amount spent on claims, quality improvement expenses, non-claims costs, Federal and State taxes, licensing and regulatory fees, and revenue. Plan sponsors must provide a remittance to the Secretary if the amount spent in a reporting year on certain costs compared to its revenue (excluding Federal and States taxes and licensing and regulatory fees) is below a certain ratio, referred to as the medical loss ratio (MLR).
MA organizations and Part D sponsors are required to report their MLR to CMS, and are subject to financial and other penalties for a failure to meet a statutory requirement that they have an MLR of at least 85 percent. The Affordable Care Act requires several levels of sanctions for failure to meet the 85 percent minimum MLR requirement, including remittance of funds to CMS, a prohibition on enrolling new members, and ultimately contract termination.
Plan sponsors will use the MLR Reporting Tool to provide contract-level MLR information to CMS. The information provided in this MLR Report is the basis for computing the contract's MLR percentage and remittance amount, if any, for a contract year.
PL: Pub.L. 111 - 148 1103 Name of Law: Patient Protection and Affordable Care Act
PL: Pub.L. 111 - 152 1857(e) Name of Law: Health Care and Education Reconciliation Act
We expect that 587 contracts will be subject to the MLR requirements, which is 29 fewer contracts our previous estimate of 616. The table below also indicates that the reduction in the amount of MLR data that is submitted to CMS on an annual basis will result in MA organizations and Part D spending on average 36 hours per MA or Part D contract on administrative work, compared to 47 hours per contract under the currently approved collection. We estimate that, as a result of the reduction in the number of contracts subject to the MLR requirements, and the reduction in the number of hours spent on administrative work, the total burden of the MLR reporting requirements across all MA organizations and Part D sponsors will decrease by 7,820 hours, from 28,952 hours under the currently approved collection to 21,132 hours under the revised collection. The table also indicates that the estimated average cost per contract will decrease from $6,372 under the currently approved collection to $5,045 under the revised collection (-$1,542 per contract).
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
CMS-10476 - Supporting Statement A (rev 04-27-2018 by OSORA PRA).docx
508_CMS-10476_Attachment_D_Data Form Crosswalk.pdf
CMS-10476_Attachment_E_Response_to_Comments 2-20-18.doc
Annual Reporting and Recordkeeping Requirements