Novu Health Engagement Blog

Investing in Quality Improvement Expenditures benefits your Medical Loss Ratio

Novu Health

The Medical Loss Ratio (MLR) rule plays an integral part in the profitability of Medicare Advantage (MA) plans. It requires MA plans to spend at least 85 percent of their revenue on health care services, covered benefits, and quality improvement efforts. With the deadline for submitting MLR data recently passed, plans are realizing that they might not be on track to meet the MLR standard.




For plans that do not meet this 85 percent MLR standard, there are two negative effects. First, the plan must issue rebates to members. The second, and more overlooked, impact is the negative “perception” this gives existing and potential members. Not meeting the MLR standard tells the story that perhaps the plan is more interested in turning a profit than investing in better care quality for its members.


Consumerism has arrived in health care and health plans must pull out all the stops to elevate the member experience and increase brand loyalty and perception. With the competitive landscape constantly changing, members expect more from their health plans and may be more likely to choose a plan that demonstrates it has members’ best interests in mind.


Marilyn Tavenner, the former Administrator of the Centers for Medicare and Medicaid Service, noted in an interview with Modern Healthcare, “…Medicare Advantage members are now probably over 30 percent of the overall Medicare population, and consumers like that plan. So we'll continue to work on quality and cost and growing the Medicare Advantage membership.” 


At NovuHealth, we’ve worked with several plans at risk for missing the MLR standard at this point in the year. For plans seeking to invest in value for members, a member engagement program focused on quality and member satisfaction fits solidly within the umbrella of Quality Improvement Expenditures (QIE) and can achieve multiple goals.


If you’ve identified your plan is at risk following the latest MLR results (released July 31), now is the perfect time to consider such a program for your plan. A member engagement program launched in late 2017 can not only boost quality scores, member satisfaction, acquisition rates, and cost utilization, but also get plans back into the ideal MLR zone (at 85 percent). Plus, a 2017 program lays the groundwork for an even more robust member engagement program in 2018—and beyond.


With a solid foundation for member engagement and an optimized MLR, plans can further convey their commitment to improving member health and experience while positioning themselves for long-term success and improved member retention. 



About NovuHealth

NovuHealth is the health care industry’s leading consumer engagement company. Combining performance analytics, behavior science and comprehensive technology solutions, our rewards and engagement programs enable health plans to increase high-value member activities—improving member health and driving plan performance. Visit us at