Common use of Medical Loss Ratio Guarantee Clause in Contracts

Medical Loss Ratio Guarantee. (a) For each calendar quarter that this contract is in effect, effective with the quarter beginning April 1, 2005, if the Contractor's Medical Loss Ratio (MLR) is less than 82%, the Department will recover by deduction from future payments a percentage of the quarter's premium revenue equal to the difference between the reported MLR and 82%. (b) Medical Loss Ratio shall be calculated by dividing total hospital and medical expenses incurred in Illinois by premium revenue paid by the Department. Premium revenue for a quarter shall be the premium revenue accrued, including Hospital Delivery Case Rate Payments. Expenses reported as Incurred But Not Reported (IBNR) shall be subject to review by the Department for actuarial soundness. All elements of reports used to calculate MLR are subject to audit by the Department. Audits may be ordered by the Department within 30 days of Departmental receipt of each quarterly report, and audits shall encompass the total subject matter of that report. (c) Hospital and medical expenses are the incurred costs of providing direct care to Enrollees for Covered Services. Outreach and general education are not included in medical expenses. (d) At the end of the four quarters ending March 31, 2006, the Department will review the Contractor's MLR for the full four quarters and recover or reconcile previous recoveries so that the Department has recovered the percentage of the total premium revenue for the four quarters equal to the difference between the cumulative MLR below 82% and 82%. Reconciliation shall consist of payment by the Contractor of any difference below the annualized 82% MLR not previously deducted, or repayment to the Contractor of deductions over the annualized 82% MLR previously made by the Department. A similar reconciliation will be performed at the end of each four quarters or the termination of any contractual relationship between the parties. Notwithstanding the provisions of section 7.12(b), the Department may order an audit of the reporting for the full four quarters within 45 days of Departmental receipt of a cumulative report of the four quarters. (e) The Contractor shall report all information necessary to effectuate this section in a format and on a schedule consistent with NAIC guidelines. The Department may request additional supporting information necessary to effectuate this section, and the Contractor shall report this information to the Department in a timely manner. (f) For purposes of calculating the Contractor's MLR, for the quarter beginning April 1, 2005, and for the month of July 2005, premium revenue will be adjusted to remove premium revenue for pharmacy services in excess of Contractor's costs for pharmacy services. 4. First Amended Attachment I shall be deleted and replaced by the attached Second Amended Attachment I. Each reference to Attachment I or First Amended Attachment I in the Contract shall be replaced with a reference to Second Amended Attachment I. All other terms and conditions of the CONTRACT shall remain in full force and effect.

Medical Loss Ratio Guarantee. (a) For each calendar quarter that this contract is in effect, effective with the quarter beginning April July 1, 20052009 during which the Contractor was under contract to the Department, if the Contractor's ’s Medical Loss Ratio (MLR) is less than 8280%, the Department will may recover by deduction from future payments a percentage of the quarter's ’s premium revenue equal to the difference between the reported MLR and 82%.80%.‌ (b) Medical Loss Ratio shall be calculated by dividing total hospital and medical expenses incurred in Illinois by premium revenue paid by the Department. Premium revenue for a quarter shall be the premium revenue accrued, including Hospital Delivery Case Rate Payments. Expenses reported as Incurred But Not Reported (IBNR) shall be subject to review by the Department for actuarial soundness. All elements of reports used to calculate MLR are subject to audit by the Department. Audits may be ordered by the Department within 30 days of Departmental receipt of each quarterly report, and audits shall encompass the total subject matter of that report. (c) Hospital and medical expenses are the incurred costs of providing direct care to Enrollees for Covered Services. Outreach and general education are not included in medical expenses. (d) At the end of the four eight quarters ending March 31, 2006June 2011, the Department will review the Contractor's ’s MLR for the full four eight quarters and may recover or reconcile previous recoveries so that the Department has recovered the percentage of the total premium revenue for the four eight quarters equal to the difference between the cumulative MLR below 8280% and 8280%. Reconciliation shall consist of payment by the Contractor of any difference below the annualized 8280% MLR not previously deducted, or repayment to the Contractor of deductions over the annualized 8280% MLR previously made by the Department. A similar reconciliation will may be performed at the end of each the four quarters ending June 2012 or the termination of any contractual relationship between the parties. Notwithstanding the provisions of section 7.12(b7.13(b), the Department may order an audit of the reporting for the full four quarters within 45 days of Departmental receipt of a cumulative report the reporting for the two-year reconciliation and within 45 days of Departmental receipt of reporting of the third year or last four quarters. (e) The Contractor shall report all information necessary to effectuate this section pursuant to NAIC quidelines in a format and on a schedule consistent with NAIC guidelines. The Department may request additional supporting information necessary to effectuate this section, and the Contractor shall report this information to the Department in a timely manner. (f) For purposes of calculating the Contractor's MLR, for the quarter beginning April 1, 2005, and for the month of July 2005, premium revenue will be adjusted to remove premium revenue for pharmacy services in excess of Contractor's costs for pharmacy services. 4. First Amended Attachment I shall be deleted and replaced by the attached Second Amended Attachment I. Each reference to Attachment I or First Amended Attachment I in the Contract shall be replaced with a reference to Second Amended Attachment I. All other terms and conditions of the CONTRACT shall remain in full force and effect.

Medical Loss Ratio Guarantee. (a) For each calendar quarter that this contract is in effect, effective with the quarter beginning April July 1, 20052006 during which the Contractor was under contract to the Department, if the Contractor's Medical Loss Ratio (MLR) is less than 82%, the Department will may recover by deduction from future payments a percentage of the quarter's premium revenue equal to the difference between the reported MLR and 82%. (b) Medical Loss Ratio shall be calculated by dividing total hospital and medical expenses incurred in Illinois by premium revenue paid by the Department. Premium revenue for a quarter shall be the premium revenue accrued, including Hospital Delivery Case Rate Payments. Expenses reported as Incurred But Not Reported (IBNR) shall be subject to review by the Department for actuarial soundness. All elements of reports used to calculate MLR are subject to audit by the Department. Audits may be ordered by the Department within 30 days of Departmental receipt of each quarterly report, and audits shall encompass the total subject matter of that report. (c) Hospital and medical expenses are the incurred costs of providing direct care to Enrollees for Covered Services. Outreach and general education are not included in medical expenses. (d) At the end of the four twelve quarters ending March 31, 2006June 2009, the Department will review the Contractor's MLR for the full four twelve quarters and may recover or reconcile previous recoveries so that the Department has recovered the percentage of the total premium revenue for the four twelve quarters equal to the difference between the cumulative MLR below 82% 82%o and 82%. Reconciliation shall consist of payment by the Contractor of any difference below the annualized 82% %> MLR not previously deducted, or repayment to the Contractor of deductions over the annualized 82% MLR previously made by the Department. A similar reconciliation will may be performed at in the end event of each four quarters or the termination of any contractual relationship between the parties. Notwithstanding the provisions of section 7.12(b), the Department may order an audit of the reporting for the full four twelve quarters within 45 days of Departmental receipt of a cumulative report of the four twelve quarters. (e) The Contractor shall report all information necessary to effectuate this section pursuant to NAIC guidelines in a format and on a schedule consistent with NAIC guidelines. The Department may request additional supporting information necessary to effectuate this section, and the Contractor shall report this information to the Department in a timely manner. (f) For purposes of calculating the Contractor's MLR17. Article IX, for the quarter beginning April 1, 2005, and for the month of July 2005, premium revenue will be adjusted to remove premium revenue for pharmacy services in excess of Contractor's costs for pharmacy services. 4. First Amended Attachment I shall be deleted and replaced by the attached Second Amended Attachment I. Each reference to Attachment I or First Amended Attachment I in the Contract shall be replaced with a reference to Second Amended Attachment I. All other terms and conditions Section 9.4 of the CONTRACT shall remain in full force and effect.contract is amended to read as follows:

Medical Loss Ratio Guarantee. (a) For each calendar quarter that this contract is in effect, effective with the quarter beginning April July 1, 20052006 during which the Contractor was under contract to the Department, if the Contractor's Medical Loss Eoss Ratio (MLRMER) is less than 82%, the Department will may recover by deduction from future payments a percentage of the quarter's premium revenue equal to the difference between the reported MLR MER and 82%. (b) Medical Loss Eoss Ratio shall be calculated by dividing total hospital and medical expenses incurred in Illinois by premium revenue paid by the Department. Premium revenue for a quarter shall be the premium revenue accrued, including Hospital Delivery Case Rate Payments. Expenses reported as Incurred But Not Reported (IBNR) shall be subject to review by the Department for actuarial soundness. All elements of reports used to calculate MLR MER are subject to audit by the Department. Audits may be ordered by the Department within 30 days of Departmental receipt of each quarterly report, and audits shall encompass the total subject matter of that report. (c) Hospital and medical expenses are the incurred costs of providing direct care to Enrollees for Covered Services. Outreach and general education are not included in medical expenses. (d) At the end of the four eight quarters ending March 31, 2006each June 2008, the Department will review the Contractor's MLR for the full four eight quarters and may recover or reconcile previous recoveries so that the Department has recovered the percentage of the total premium revenue for the four eight quarters equal to the difference between the cumulative MLR below 82% and 82%. Reconciliation shall consist of payment by the Contractor of any difference below the annualized 82% MLR not previously deducted, or repayment to the Contractor of deductions over the annualized 82% MLR previously made by the Department. A similar reconciliation will may be performed at the end of each the four quarters ending June 2009 or the termination of any contractual relationship between betv/ccn the parties. Notwithstanding the provisions of section 7.12(b), the Department may order an audit of the reporting for the full four eight quarters within 45 days of Departmental receipt of a cumulative report of the four eight quarters. (e) The Contractor shall report all information necessary to effectuate this section in a format and on a schedule consistent with NAIC guidelines. The Department may request additional supporting information necessary to effectuate this section, and the Contractor shall report this information to the Department in a timely manner. (f) For purposes of calculating the Contractor's MLR, for the quarter beginning April 1, 2005, and for the month of July 2005, premium revenue will be adjusted to remove premium revenue for pharmacy services in excess of Contractor's costs for pharmacy services. 4. First Amended Attachment I shall be deleted and replaced by the attached Second Amended Attachment I. Each reference to Attachment I or First Amended Attachment I in the Contract shall be replaced with a reference to Second Amended Attachment I. All other terms and conditions of the CONTRACT shall remain in full force and effect.

Medical Loss Ratio Guarantee. (a) For each calendar quarter that this contract is in effect, effective with the quarter beginning April 1, 2005, if the Contractor's Medical Loss Ratio (MLR) is less than 82%, the Department will recover by deduction from future payments a percentage of the quarter's premium revenue equal to the difference between the reported MLR and 82%. (b) Medical Loss Ratio shall be calculated by dividing total hospital and medical expenses incurred in Illinois by premium revenue paid by the Department. Premium revenue for a quarter shall be the premium revenue accrued, including Hospital Delivery Case Rate Payments. Expenses reported as Incurred But Not Reported (IBNR) shall be subject to review by the Department for actuarial soundness. All elements of reports used to calculate MLR are subject to audit by the Department. Audits may be ordered by the Department within 30 days of Departmental receipt of each quarterly report, and audits shall encompass the total subject matter of that report.within (c) Hospital and medical expenses are the incurred costs of providing direct care to Enrollees for Covered Services. Outreach and general education are not included in medical expenses. (d) At the end of the four quarters ending March 31, 2006, the Department will review the Contractor's MLR for the full four quarters and recover or reconcile previous recoveries so that the Department has recovered the percentage of the total premium revenue for the four quarters equal to the difference between the cumulative MLR below 82% and 82%. Reconciliation shall consist of payment by the Contractor of any difference below the annualized 82% MLR not previously deducted, or repayment to the Contractor of deductions over the annualized 82% MLR previously made by the Department. A similar reconciliation will be performed at the end of each four quarters or the termination of any contractual relationship between the parties. Notwithstanding the provisions of section 7.12(b), the Department may order an audit of the reporting for the full four quarters within 45 days of Departmental receipt of a cumulative report of the four quarters. (e) The Contractor shall report all information necessary to effectuate this section in a format and on a schedule consistent with NAIC guidelines. The Department may request additional supporting information necessary to effectuate this section, and the Contractor shall report this information to the Department in a timely manner. (f) For purposes of calculating the Contractor's MLR, for the quarter beginning April 1, 2005, and for the month of July 2005, premium revenue will be adjusted to remove premium revenue for pharmacy services in excess of Contractor's costs for pharmacy services. 4. First Amended Attachment I shall be deleted and replaced by the attached Second First Amended Attachment I. Each reference to Attachment I or First Amended Attachment I in the Contract shall be replaced with a reference to Second First Amended Attachment I. All other terms and conditions of the CONTRACT shall remain in full force and effect.