The Treasury Department and IRS today released for publication in the Federal Register final regulations (T.D. 9772) that provide guidance to Blue Cross and Blue Shield organizations and other entities that qualify under section 833 on the computation of the medical loss ratio (MLR) and the consequences of not satisfying the MLR requirement.
Today’s final regulations [PDF 206 KB] amend the existing regulations under section 833, which were adopted in January 2014 (T.D. 9651), to reflect technical corrections made to the statute by the Appropriations Act on December 16, 2014.
The technical corrections provide that in calculating its MLR, an organization includes in the numerator both the cost of reimbursement for clinical services and amounts expended for activities that improve health care quality. The technical corrections further provide that the consequences for not satisfying the MLR requirement are that section 833(a)(2) and (3) do not apply to the organization, but the organization continues to be treated as a stock insurance company under section 833(a)(1).
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