Pause in Risk Adjustment Payments Announced, CMS Blames District Court's Decision
Blaming a recent decision by the US District Court for the District of New Mexico, CMS has announced that it has halted collections or payments under the risk adjustment program, including amounts for the 2017 benefit year, established by the Affordable Care Act for the 2014-2018 benefit period.
Blaming a recent decision by the US District Court for the District of New Mexico, CMS has announced that it has halted collections or payments under the risk adjustment program, including amounts for the 2017 benefit year, established by the Affordable Care Act (ACA) for the 2014-2018 benefit period.
The risk adjustment program, finalized by CMS in 2013, included the use of a statewide average premium in order to maintain a budget neutral program. The provision resulted in the creation of a “risk pool” by participating health insurers to help balance the costs of insurers who have high-risk enrollees. However, the program
According to CMS, the
“We were disappointed by the court’s recent ruling. As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold. CMS has asked the court to reconsider its ruling, and hopes for a prompt resolution that allows CMS to prevent more adverse impacts on Americans who receive their insurance in the individual and small group markets,” CMS Administrator Seema Verma said in a statement.
Reacting to the decision, America’s Health Insurance Plans (AHIP), which represents a significant portion of the US health insurance community (except UnitedHealthcare, Aetna, and Humana), said that the risk adjustment pool helps ensure that patients who have a high need for health services receive their care by sharing the cost of covering them. Plans that cover more low-risk patients transfer their funds to the plans with high-risk patients, minus taxpayer money.
“We are very discouraged by the new market disruption brought about by the decision to freeze risk adjustment payments,” the
The Blue Cross Blue Shield Association (BCBSA)
A timeline of the events leading to this weekend’s decision
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