|May 1, 2012 | www.fisherphillips.com|
One of the provisions in the recent healthcare reform law is the medical loss ratio (MLR) that requires insurance companies to spend a certain proportion of their income on healthcare benefits for their customers. If an insurance company does not meet its MLR standard, it is required to issue a rebate to its policyholders. (The MLR standards do not apply to self-insured medical plans.) In 2011, the Labor Department issued a Technical Release, which provided guidance on how sponsors of group health plans covered by ERISA should handle such rebates.
As you may recall, the HITECH Act required Health and Human Services (HHS), the federal agency in charge of administering HIPAA, to affirmatively conduct periodic audits to ensure that covered entities and business associates are complying with HIPAA's privacy and security rules. Before HITECH, HHS was mostly responding to complaints and not conducting random audits of HIPAA compliance.