Enter the paid medical service claims, QIA, premium revenue, and allowable deductions into the calculator to determine the medical loss ratio.
Medical Loss Ratio Formula
The following formula is used to calculate the medical loss ratio, MLR.
MLR = PMSC + QIA / PR – AD
- Where MLR is the medical loss ratio
- PMSC is the paid medical services claims ($)
- QIA is the expenses for activities that improve health care quality
- PR is the premium revene
- AD are the allowable deductibles
Medical Loss Ratio Definition
The medical loss ratio, or MLR for short, is defined as the proportion of premium revenues spent on clinical services and quality improvement programs.
How to calculate medical loss ratio? (MLR)
- First, determine the paid medical service claims and QIA.
Calculate the total money spent on medical services and quality improvement programs.
- Next, determine the premium revenue.
Calculate the total premium revenue earned.
- Next, determine the deductibles.
Calculate the total value of any allowable deductions.
- Finally, calculate the MLR.
Calculate the MLR using the formula above.
MLR stands for medical loss ratio and is a measure of the ratio of medical service claims and quality improvement programs to the total premium revenue.