What is the Medicaid Loss Ratio?

Medical Loss Ratio is the proportion of premium revenues spent on clinical services and quality improvement. It is commonly referred to as MLR.

How is it used in Medicaid?

In recent years as with many things, CMS has brought new regulations for Medicaid Managed care related to MLR. These new regulations require states to monitor the MLR for MCOs and establish criteria from this data for setting future MLR. The minimum MLR has also been set by CMS at 85% and establishes that noncompliant MCOs can have rates lowered in the future.

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