SAVINGS FROM LIMITS ON MA PLAN ADMINISTRATIVE COSTS.

SEC. 1103. SAVINGS FROM LIMITS ON MA PLAN ADMINISTRATIVE COSTS. Section 1857(e) of the Social Security Act (42 U.S.C. 1395w–27(e)) is amended by adding at the end the following new paragraph:“(4) Requirement for minimum medical loss ratio.—If the Secretary determines for a contract year (beginning with 2014) that an MA plan has failed to have a medical loss ratio of at least .85—“(A) the MA plan shall remit to the Secretary an amount equal to the product of—“(i) the total revenue of the MA plan under this part for the contract year; and“(ii) the difference between .85 and the medical loss ratio;“(B) for 3 consecutive contract years, the Secretary shall not permit the enrollment of new enrollees under the plan for coverage during the second succeeding contract year; and“(C) the Secretary shall terminate the plan contract if the plan fails to have such a medical loss ratio for 5 consecutive contract years.”.