WASHINGTON — For Aetna and other insurers, the battle over health-care reform is not over. It has just shifted to new decision-makers, a more obscure process, and a series of questions that are narrower, yet still significant.

Exhibit A in the ongoing lobbying fray is an effort to shape one of the most important regulations in the health-care overhaul law: a provision designed to ensure that most of consumers’ premiums pay for actual medical care, not administrative costs or profits.

To that end, Congress mandated in the new law, the Patient Protection and Affordable Care Act, that at least 80 to 85 percent of premiums must be used to pay for clinical care or activities that improve health care quality. If insurers fail to meet these thresholds, they will have to pay rebates to their customers-potentially costing them millions of dollars.

But lawmakers did not define “clinical care” or “health care quality,” leaving that task to regulators who are being bombarded with suggestions about what to include and exclude as they seek to turn the legislative provision into a workable regulation.

“The insurance industry is very engaged, but so are the consumer advocacy groups,” said Kim Holland, Oklahoma’s top insurance regulator and an officer with the National Association of Insurance Commissioners, which Congress charged with drafting this regulation.

Interest groups spent more than $500 million lobbying on health-related issues in 2009 and another $100 million-plus in the first quarter of 2010, according to an analysis by the Center for Responsive Politics, a nonpartisan group that tracks money in politics. That total covers far more than just health care reform, but that issue has been the top focus for a gamut of interests, from doctors to hospitals to insurance companies and consumer groups.

Of the $19 million doled out by insurers and other health service interests so far this year, Aetna is the top spender, with a $1.6 million tab for its Washington lobbying activities from January through March, according to the CRP tally. Blue Cross Blue Shield is not far behind, having spent $1.4 million so far in 2010.

Now that the law has passed, these and other insurance firms have turned their firepower towards implementation. And the battle over the premium issue is a fresh target.

The percentage of premium dollars an insurance company spends on medical care, as opposed to administrative costs or profits, is known in health care jargon as the “medical loss ratio.”

Consumer groups want the definitions of what can be counted toward patient care to be narrowly written, while insurance companies are pushing for them to be as expansive as possible. About the only thing they agree on is that there is a lot of wiggle room for the regulators writing these definitions, and that the stakes are very high for both sides.

“No other aspect of PPACA will be as influential in shaping the future of the health care marketplace in the United States,” Steven B. Kelmar, a top Aetna lobbyist, wrote in a 36-page letter to the federal Department of Health and Human Services, outlining the company’s priorities in shaping the new premium regulation.

Carmen Balber, director of the Washington office for Consumer Watchdog, an advocacy group that has been highly critical of the insurance industry and is closely tracking implementation of the health reform law, concurred.

“This regulation was one of the most concrete steps that Congress took to rein in costs for consumers,” she said. “The idea here was to ensure that insurers spend more on patient care and less on overhead and profit.”

Balber and others fear that the insurers are now trying to manipulate the rule, so they can categorize administrative or cost-containment expenses as medical care or quality improvement.

For example, she said, Aetna and other insurers have urged regulators to include health-information technology costs under the umbrella of “quality improvement” measures, making them count towards a firm’s patient care expenses.

She said including some of those costs, such as creating electronic medical records for patients, makes perfect sense. But she’s concerned that other information technology systems that insurers used to increase profits and or squeeze customers will also get lumped in. She cited, for example, an upgraded information system that Aetna used in the early 2000s, according to a Wall Street Journal article, to “identify and dump unprofitable corporate accounts,” while also increasing premiums and boosting profitability.

“That’s not patient care,” Balber said.

An Aetna spokesman, Mohit Ghose, said Aetna would not comment beyond the letter it submitted to HHS on this issue. That letter does not make any mention of the IT system cited by Balmer.

Kelmar, the company’s lobbyist, wrote that health plans “routinely gather, analyze and report health care quality information,” as part of their basic operations, and he says these tools are vital to improving patient care. He cited the use of information technology programs to help improve disease management, to educate customers, and provide clinical advice or counseling.

“Health information tools allow clinical information to be shared in real time among patients and providers, reducing the risk of medical errors and unnecessary/duplicative services,” Kelmar wrote.

But he also cited other items, such as upgrading to a new coding system for health care expenses and “utilization review,” which Aetna says helps reduce unnecessary or inappropriate services but which critics say is used to cut costs and restrict treatments.

Another major point of contention in this mostly behind-the-scenes fight is how much detail insurance giants have to provide in reporting the percentage of premiums they spend on medical care. For example, there’s a question over whether companies can average those percentages at the parent-company level or whether they have to break it out by subsidiaries. Additionally, some insurers do not want to provide that data at the state level.

“This is really an issue of scale and size,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, an insurance lobby group. He said a company might insure thousands of customers in one state, and only a few in another, so calculating the latter figure separately “might not provide statistically relevant data.”

But others say that allowing companies to provide only top-line numbers will obscure significant variations in the insurance market and make it easier for large insurers to meet the new targets by averaging disparate numbers.

“Since insurers are regulated at the state level and register their companies by state, allowing broader aggregation across states or even nationally just creates opportunities for companies to game the new law,” said Judy Dugan, research director of Consumer Watchdog. “If patient care ratios are reported by state, and by each corporate subsidiary, a few insurers may end up too small to measure. But the larger companies would all be kept honest.”

As these narrow questions are hashed out, some in Congress are worried that too much flexibility in the definitions of the new rule will allow insurers to “cook their books,” as Sen. John D. Rockefeller, D-West Va., put it, rather than encouraging the industry to improve patient care.

“I am extremely concerned that the health insurance industry is mounting an all-out effort to weaken this important consumer protection provision,” Rockefeller wrote in his own letter to HHS.

Zirkelbach, of America’s Health Insurance Plans, said the industry is not trying to weaken the provision, but to make it effective. “If the MLR definition is too restrictive, it will inhibit plans’ ability to continue to offer the types of quality services that patients want and rely on today,” he said.

He said, for example, that insurers have pioneered new health programs, such as disease management and prevention and wellness initiatives, “to ensure that patients are getting the right health care treatments, at the right place, at the right time,” and they are now seeking a good definition of health quality improvement to preserve and foster those efforts.

Holland, the Oklahoma insurance regulator helping to craft these new rules, said she and her colleagues have to strike a careful balance.

“The definitions of clinical care and medical quality have a lot of moving parts,” she said.

The National Association of Insurance Commissioners is trying to make sure they leave enough room for companies to innovate and develop new tools that genuinely improve the health care system, without giving them so much leeway that they can pass off expenses that are not valid.

The process is all the more complicated because Congress charged the NAIC, a trade association of state insurance commissioners, with crafting these new rules, instead of a federal government agency, such as HHS. Balber said that having a private entity, albeit one made up of public servants, handle this issue has made the already murky process of federal regulation-writing even more indecipherable.

But the NAIC’s Holland said the debate over this new rule has been open, with all the stakeholders at the table offering their views. The process is so complex, she noted, that NAIC missed its first deadline of getting a rule to HHS for review and certification.

“We really have to think through each and every one of these items,” she said. “Consumers are spending a lot of money on health insurance, and they want to make sure most of that money is spent on their care.”

She expects the association to finish its work sometime in August. Insurers have to comply with the new 80 to 85 percent thresholds by the time they start their next plan year, which for many will be between September and January. The customer rebate provision goes into effect on Jan. 1, 2011.