Nevada Administrative Code

PPACA: The Collateral Damage

The Patient Protection and Affordable Care Act of 2010 (PPACA) is costing some health insurance agents their jobs, interfering with the shift to the ICD-10 diagnostic coding system, and encouraging many employers to think about dropping group health coverage.

Witnesses talked about those observations today during a hearing on the effects of PPACA on efforts to maintain health coverage and jobs.

Rep. Joe Pitts, R-Pa., chairman of the health subcommittee at the House Energy and Commerce Committee, organized the hearing.

Pitts, a critic of PPACA, federal agencies have issued about 3,500 pages of PPACA-related rules, notices and corrections, with many of the rules published through an interim final rule process that bypasses the usual public comment period system.

President Obama said in July 2009 that, “If you like your plan, you’ll be able to keep it,” and PPACA includes a “grandfathering” system that is supposed to help individuals and employers keep their coverage, Pitts said, according to a written version of his remarks.

But the Obama administration itself estimated in June 2010 that about half of all employers will lose grandfather status in the next 2 years, Pitts said.

Another provision, the minimum medical loss ratio (MLR) provision, is supposed to require insurers to spend at least 85% of large group revenue and 80% of individual and small group revenue on health care or quality improvement, but HHS already has granted waivers to Maine, Nevada and New Hampshire, and nine other states have applied for MLR waivers, Pitts said.

Ethan Rome of the Health Care Action Network, Washington, argued that the real problem is health insurer efforts to boost profits.

States require health insurers to have about $14 billion in risk-based capital, but the biggest publicly traded and nonprofit health insurers now have about $97 billion in risk-based capital, Rome said.

Health insurers complain that they have an overall average profit margin of 4.4%, but, because their revenue is so high, that transplants into a total of $347 billion in profits during the 10-year period that will end in 2019, Rome said.

From 2003 to 2010, publicly traded health insurers used $64 billion in cash to buy back their own shares, rather than pay for care or lower premiums, Rome said.

MUST AN INSURANCE COMPANY IMMEDIATELY PAY THE “UNDISPUTED AMOUNT ...

Our insurance company clients have asked the following question: “Where a first-party claim is involved, does the carrier have to immediately pay the claimant the amount at which the carrier values the claim?  Or can it in good faith refuse payment until the parties reach a resolution of the dispute as to value?”  The answer to that question always starts with a review of the regulations. 

Nevada Administrative Code 686A.675 reads as follows: However, if you interpret the regulation in that fashion your interpretation would be different than that held at the Nevada Division of Insurance.  In 2003, a consumer (Walter Jourdan) filed a complaint with the Division of Insurance against his insurance company (Progressive Halcyon Insurance Company Claim No. 028122836).  That dispute involved an underinsured motorist claim.  The carrier offered its insured a certain amount to settle the claim.  However the payment was conditioned upon the insured signing a release.  Mr. Jourdan apparently valued the claim higher than the amount offered by Progressive.  When he refused to sign a release for the amount Progressive offered and Progressive did not pay that amount immediately, he filed his complaint with the Division arguing the insurance company had violated the above regulation.  The insured argued that the carrier was obliged to immediately pay him the amount at which it had valued the claim.  The insured apparently planned to pursue the difference via arbitration or some other dispute resolution process after he had received the insurance company’s payment.  for a copy of the letter.  The Division found that the regulation applies across coverages and not within the same coverage.  As an example, an auto carrier could not withhold payment on a medical payments claim in order to leverage its negotiating position on a UIM claim.  However, the regulation was not applicable to a value dispute that exists exclusively within the UIM portion of the coverage.  Therefore, according to the Insurance Division, an insurance company is not obligated to immediately pay its insured the amount at which it values the claim so long as the dispute is within the same portion of the policy coverage.

Nevada administrative code, containing all permanent regulations of state agencies adopted under chapter 233B of NRS

Nevada administrative code, containing all permanent regulations of state agencies adopted under chapter 233B of NRS

Code of Federal Regulations, Title 40, Protection of Environment, Pt. 52 (Sec. 52.1018-End of Pt. 52), Revised as of July 1, 2010

Administrative codes and registers, state/federal survey

A study of administrative law, administrative rule making : the conduct of administrative hearings and the judicial review thereof