Reduce Costs by Addressing Medical Loss Ratio

Nearly all sectors of public healthcare have projected increased spend in the next decade. The U.S. population is rising, which will result in more enrollments in government programs. The Center for Medicare and Medicaid Services (CMS) projects that nearly half (47.3%) of the U.S. population will be enrolled in Medicare, Medicaid, or CHIP programs by 2026. National healthcare spending will reach $6 trillion by 2027 (a 67% increase from today’s annual expenditure of $3.6T).

Moreover, the Affordable Care Act (ACA) enacted in 2010 included a medical loss ratio (MLR) provision known as the 80/20 rule. This stipulation requires that health plans spend 80–85% of their premiums on health care costs and quality improvement activities, while the remaining premiums are reserved for administrative expenses and marketing initiatives.

Under the law, health plans must emphasize medical cost-saving initiatives and better manage their MLR. Many plans struggle to achieve this requirement. Some plans cannot achieve it. Consequently, plans do not have sufficient funds to make much-needed improvements to their infrastructure, undertake modernization efforts, or implement government mandates.

Catalyst minimizes administrative coordination requirements and lowers administrative costs as a prime contractor and does so by leveraging a network of partnerships that deliver a highly customized, best-of-breed approach instead of a one-size-fits-all approach.

Immediate Benefits include:

  • Immediate reduction of PMPM capitation costs of Specialty Services
  • Performance-based service/Risk-based pricing
  • Measurable and reportable results
  • Healthcare plan business process improvement

Long-Term Benefits include:

  • Reduction of overall medical costs
  • Improved quality of care
  • Reduction in risk to the healthcare plan
  • Consistent and predictable outcomes
  • Lower administrative expenses

As health care in the United States progresses into the next decade and beyond, health plans must be ready to face the ever-changing landscape of regulatory requirements and rising medical costs. Catalyst is prepared to help health plans reduce medical costs and improve revenue accuracy by leveraging Catalyst’s intelligent data-driven design process. Catalyst will identify potential targets of improvements, design, and manage a unique, integrated, and coordinated portfolio of services specific to the health plan that will drive substantial and measurable annual cost savings. Catalyst will also help the plan reduce admin costs, freeing internal staff resources to focus on other value-add services.