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DOJ appeals Moda Health risk corridor decision

May 13, 2017
  • The U.S. Justice Department appealed a $214 million decision from February to pay Moda Health over money owed to the risk corridor program, reported Portland Business Journal.
  • The Affordable Care Act (ACA) created the risk corridor program to pay insurers for losses incurred on ACA exchanges. CMS hasn’t paid the full amount and still owes Moda and other payers money.
  • Meanwhile, Health Affairs reported that the House of Representatives recently asked permission from the Federal Circuit Court of Appeals to file an amicus brief in support of the government in a different risk corridor case. That case involves Land of Lincoln Health Insurance. It is the first of risk corridor case to reach the appellate level, reported Health Affairs..

In announcing its opinion in February, the U.S. Court of Claims said the federal government “made a promise” to payers.

“Today, the Court directs the Government to fulfill that promise. After all, to say to [Moda], ‘The joke is on you. You shouldn’t have trusted us,’ is hardly worthy of our great government,” Judge Thomas Wheeler wrote then.

Moda Health, which offers health insurance in three states: Oregon, Washington and Alaska, is one of at least seven other insurers that have sued the government because of the risk corridor program. Other payers include Highmark, Health Republic Insurance and Blue Cross and Blue Shield of North Carolina.

Insurers are looking for the full amount owed to them under the ACA’s risk corridor formula — not a pro rata share. Moda Health sought “hundreds of millions of dollars” after the CMS paid the plan slightly more than $11 million in 2014 and no payments in 2015 and 2016.

In the amicus brief request for the Land of Lincoln case, the House of Representatives wrote that it has “repeatedly passed legislation” that the risk corridors are budget-neutral and self-funded. The ACA did not appropriate funds for the risk corridor payments, they wrote. “No appropriated funds are — or ever have been — available for that purpose,” they said.

The CMS has not been able to make full payments because far more payers were owed from having higher ACA exchange costs than those that had lower costs were able to make up for. Congress declined to appropriate funds to cover the difference in 2015 and 2016. That action was led by ACA opponents, who are now seeing some progress in their efforts to repeal the act.

While the risk corridor payments are a big concern for insurers, a more timely problem is no clear word from President Donald Trump’s administration or Congress on whether they will receive cost-sharing reductions payments.

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