Earlier this week, the Trump administration announced it would be suspending more than $10 billion in risk adjustment payments to issuers. Since then, several issuers and analysts have come out against the decision, saying CMS had several other options it could have taken.
According to the Centers for Medicare & Medicaid Services (CMS), the hold is due to a March court ruling and pending litigation. The case involved New Mexico Connections, a consumer operated and oriented plan (CO-OP), which sued the Department of Health and Human Services (HHS) over an alleged flaw in the calculation that favored larger issuers. The presiding judge, James Browning, ruled that HHS’ formula was not illegal but should be re-examined. A previous court ruling in Massachusetts upheld the federal program.