PPO health insurance companies along with many other types of health insurers, are changing their accounting practices to make administration costs medical costs to avoid industry reforms according to the US Sentate’s report released recently.  This is found in the article “Health Insurers Shifting Costs Ahead of Law: Report” by Susan Heavy on Yahoo News.

The new health care bill passed in March stated that health insurance companies must adjust their spending habits to adhere to new requirements.  One example is that large group plans must spend 85 cents of every dollar collected from premiums on medical care instead of administrative costs.

Cigna Health Insurance spokesperson Chris Curran says it’s too early to tell how the new rules would affect insurers.  New methods of calculating costs are constantly being developed ahead of the new requirements.  Senator John Rockefeller says that even though the new rule does not go into effect until January 1st, 2011, companies are still far below the laws requirements which may cause issues with enforcement.