Currently Viewing:
Currently Reading
Suspension of a Rural Syringe Service Program Increased Risks of HIV and HCV Acquisition
May 23, 2019 – Wallace Stephens
LifeScan Finds Partner to Move Into CGM Market
May 23, 2019 – Mary Caffrey
Lenalidomide Beats Standard of Care in Smoldering MM
May 23, 2019 – Samantha DiGrande
What We're Reading: Addressing Maternal Care Disparities; Eggs and Stroke Risk; CBD for Opioid Addiction
May 23, 2019 – AJMC Staff
High-Deductible Insurance Plans Create Barriers to COPD Care
May 22, 2019 – Wallace Stephens
Patients With Ovarian Cancer Could Benefit From More Genetic Testing
May 22, 2019 – Laura Joszt
What We're Reading: Vermont AG Sues Sackler Family; Half-Price Insulin; Asthma Rates Fall in LA
May 22, 2019 – AJMC Staff
Increasing Use of Primary Care May Lower Rates of Respiratory Failure
May 22, 2019 – Wallace Stephens
African American COPD Patients Underutilize Pulmonary Rehabilitation
May 21, 2019 – Wallace Stephens

Maine Insurer Sues HHS Over CSR Payments

Jaime Rosenberg
Maine Community Health Options is seeking $5.6 million from HHS, claiming the department failed to reimburse marketplace insurers for cost-sharing reductions for 2017. Under section 1402 of the Affordable Care Act, an insurer participating in the marketplace is required to offer CSR plans, and in return will be guaranteed reimbursement by the government.
With days left in 2017, Maine Community Health Options (MCHO) filed a lawsuit against HHS, alleging the department failed to reimburse marketplace insurers for cost-sharing reductions (CSRs) for the year, according to an article in Health Affairs.

The nonprofit insurer in Maine is seeking an estimated $5.6 million in CSR payments for the 2017 plan year. As an insurer participating in the marketplace, the insurer required to offer CSR plans, and in return will be guaranteed reimbursement by the government under section 1402 of the Affordable Care Act (ACA). The CSR plans help to decrease out-of-pocket healthcare costs for eligible low-income marketplace consumers.

The complaint has 2 counts. The first count argues that HHS’ failure to make the CSR payments violates the statutory and regulatory mandate: “As part of its obligations under Section 1402 of the ACA and/or its obligations under Section 156.430, the Government is required to pay any eligible quality health plan (QHP) the applicable cost-sharing reductions mandated by the ACA.” The count continues, stating that MCHO is an eligible QHP issuer under the ACA, and based on its adherence, it satisfied the requirements to receive payment from the government; the government’s failure to pay has resulted in $5,651,672.49 in damages.

The second count states that MCHO entered into an implied-in-fact contract with the government regarding the government’s obligation to make full and timely CSR payments in exchange for MCHO’s agreement to become a quality health plan issuer. The count claims that the government’s agreement to these payments was a significant factor in their decision to participate in health care exchange.

According to the article in Health Affairs, although much of the damage of CSR nonpayment has been mitigated for 2018 through higher rates, it is unclear whether MCHO will be successful and whether other insurers will follow suit and sue HHS for outstanding CSR payments.

In October 2017, President Donald Trump ended the CSR payments after months of voicing his intent to do so. Soon after, a federal judge ruled in favor of the administration. While acknowledging that CSRs helped achieve a core goal of the ACA, the judge stated that the states seeking to keep the subsidies intact failed to meet the bar needed for a preliminary injunction, and suggested that the administration had a stronger argument; House Republicans had sued and won a lower court hearing, claiming that Congress had not, in fact, appropriated funds for CSRs.

Shortly after the ruling, and ahead of open enrollment for the 2018 marketplace, an analysis found that premiums for silver plans would rise substantially more than bronze and gold plans due to many states’ insurers loading the cost from the eradication of CSRs in the tier.

Several attempts were made by senators to keep the subsidiaries intact prior to the Republican tax bill's passage in December 2017. Senators Lamar Alexander, R-Tennessee, and Patty Murray, D-Washington, put forward a bipartisan plan that would seek to retain subsidiaries for insurers. Senator Collins, R-Maine, voted in favor of the GOP tax bill in exchange for funding for CSRs; however, the deal fell apart after House Speaker Paul Ryan refused to allow the funding to be included in the year’s spending package.

Copyright AJMC 2006-2018 Clinical Care Targeted Communications Group, LLC. All Rights Reserved.
Welcome the the new and improved, the premier managed market network. Tell us about yourself so that we can serve you better.
Sign Up