Bill introduced to regulate healthcare costs in NMI

Sen. Sixto Igisomar (R-Saipan) has authored a bill to establish a claims and clinical data warehouse in the CNMI, comparable to other states in the U.S. mainland.

S.B. 19-61 aims to assess the total cost of healthcare in the CNMI by establishing this claims data warehouse. The bill aims to “improve accountability for how health insurance premiums are spent by requiring health insurance insurers and health care providers to submit reports on Medical Loss Ratio and claims and clinical data to the CNMI Insurance Commissioner.”

Medical loss ratio, or MLR, is the percent of premium an insurer spends on claims and expenses that improve health care quality. If an insurer uses 80 cents out of every premium dollar to pay its customers’ medical claims and activities that improve the quality of care, then the company has an MLR of 80 percent, for example.

The bill would direct the Commonwealth Healthcare Corp. to establish this claims and clinical data warehouse. CHCC would establish a definition for plan year and calendar year, require insurers and providers to provide claims and clinical data, and to conduct and report studies on the cost and quality of care, population health conditions, healthcare disparities, and other health matters.

The bill further requires health insurance issuers to report to the insurance commission on MLR and medical claims to “enable oversight over how health insurance companies spend premium dollars,” the bill states.

CHCC, the insurance commissioner, and the local Medicaid program would cooperate in governance of the claims database, the bill states.

“…The regulation of health insurance cost, coverage, and medical loss ratios are important to ensure that consumers receive value for premiums paid; health insurance and healthcare is affordable and accessible in the CNMI; and, that transparency exists in health insurance and health care,” the bill states.

“Without reporting MLR and claims by insurers and establishing the authority of the insurance commissioner to establish acceptable MLR ratios, the CNMI will not be able to effectively review rates and ensure that consumers receive value for premiums paid.

“Information regarding the cost and quality of healthcare services and health insurance programs must be available to consumers so that the best healthcare decisions can be made for themselves and their families. The Legislature finds that a lack of cost transparency may obscure price variations for medical services and health insurance premiums within the Commonwealth, thus obstructing access to healthcare for CNMI residents,” the bill states.