Health Law

The United States health care industry is in the midst of a major transformation. It is estimated that health reform initiatives underway will transform more than 90% of a payers’ information technology (IT) architecture. Providers are realizing these reforms and mandates are not just IT projects, as the initiatives require major changes in the way they provide care. The reforms and mandates issued by the federal government are not independent of one another. They are designed to be complementary and enhance the broad goal of creating a more efficient, cost-effective, modern health care delivery system to counteract the skyrocketing cost of health care. International Classification of Diseases, 10th revision (ICD-10) is at the core of that system because it provides the standard and high-quality data future systems will require.

One of the most significant and impactful changes contained in the 2010 Patient Protection and Affordable Care Act (PPACA), requires health insurance companies to meet minimum medical loss ratio (MLR) targets of 80% for small group and individual plans and 85% for large group plans.  Pre-PPACA, the average, large health plan spent between 18 and 21 cents on administrative costs. Post-PPACA, spending 85 cents of every dollar on medical and quality leaves 15 cents for administrative costs.