July 20, 2018
Dive
Brief:
- An interim
final rule from CMS that could reinstate the suspended $10.4 billion in
risk-adjusted payments to insurers is awaiting approval from the Office of
Management and Budget.
- The
payments were designed to stabilize the nascent Affordable Care Act market
by redistributing money to insurers with higher-cost members. A Trump
administration official told Bloomberg that
the rule is being considered to resolve the legal dispute that caused CMS
to freeze the payments.
- The decision to halt the payments
during a period where payers are finalizing offerings for open enrollment
in November put the insurance industry in a tizzy. Many warned that the
decision to halt the payments would hike up premiums for 2019.
Dive
Insight:
Large
insurers, many of which are owed millions of dollars in risk-adjusted payments
for 2017, called for CMS to quickly devise an alternative. The details of the
interim final rule and how it will address risk-adjusted payments, however,
remain unknown.
The
legal dispute that triggered the freeze was U.S. District Judge James Browning's
ruling in February that the payment's methodology was based on flawed
calculations. Browning determined CMS would need to justify its math through a
rule that's subject to public comment.
The
title of the interim rule pending review, "Ratification and Reissuance of
the Methodology for the HHS-operated Permanent Risk Adjustment Program under
the Patient Protection and Affordable Care Act," suggests it will address
exactly that.
That
should please large players in the insurance industry like Blue Cross Blue
Shield Association, whose CEO Scott Serota called the CMS decision to
freeze the payments a recipe for "turmoil" for insurers and small
businesses in the small group market and predicted it would "undermine
Americans' access to affordable coverage."
For
smaller insurers like Molina and Centene, each of which would have avoided
$1 billion in payments into the risk-adjustment pool for 2017, that respite
might be coming to an end.
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