Minnesota Administrative Rules

4685.0815 INCURRED BUT NOT REPORTED LIABILITIES.

Subpart 1.

Written records of claims.

A health maintenance organization shall keep written records of claims, according to items A to C.

A.

A health maintenance organization shall establish and maintain files and records that accurately document its process for calculating claim liabilities, including incurred but not reported claims, that are submitted in annual and quarterly reports to the commissioner.

B.

Written records pertaining to claims incurred but not reported shall be maintained separately from other records pertaining to claims payable.

C.

The health maintenance organization must have complete and accurate claim data available for the commissioner to audit as required under Minnesota Statutes, section 62D.14.

Subp. 2.

Calculation of incurred but not reported claims.

The liability for incurred but not reported claims shall be calculated in conformity with generally accepted accounting principals and actuarial standards. The health maintenance organization shall calculate its incurred but not reported claims by taking past actual claims experience and then adjusting this base figure for changing trends. Factors that shall be considered reasonable adjustments to the base figure include the following:

A.

changes in enrollment mix, provider mix, and product mix;

B.

changes in claims or billing procedures;

C.

changes in utilization;

D.

organizational changes;

E.

medical advancements and new procedures; and

F.

any other factors the health maintenance organization can demonstrate have an effect on incurred but not reported claims experience.

Statutory Authority:

MS s 62D.08; 62D.182; 62D.20

History:

14 SR 901

Published Electronically:

October 11, 2007