CMS restores Affordable Care Act risk-adjustment transfers for 2017 benefit year

CMS restores Affordable Care Act risk-adjustment transfers for 2017 benefit year

Yesterday, the Centers for Medicare and Medicaid Services (CMS) released a final rule designed to allow and reissue payments under the Affordable Act risk-adjustment program to balance the insurance market. According to CMS Administrator Seema Verma, “This rule will restore operation of the risk adjustment program and mitigate some of the uncertainty caused by the New Mexico litigation.”  

Prior to this, on July 19, CMS released an interim final rule, titled the Ratification and Reissuance of the Methodology for the HHS-operated Permanent Risk Adjustment Program under the Patient Protection and Affordable Care Act, as an option to restore the program to allow the continuation of risk-adjustment (RA) transfer payments.  

Earlier this month, CMS halted the program, freezing billions of dollars. Effectively reversing the decision announced on July 8, when the program was suspended after a court ruling that halted payments under the risk adjustment program. In 2017, risk-adjustment payments totaled $10.4 billion paid to Affordable Care Act exchange insurers with lower-risk members to ACA insurers with higher-risk members.    

According to CMS’ announcement, reinstating the program is “…an important step that fills a void created by a federal district court’s vacating of the previously issued methodology, and enables the agency to resume the CMS-operated risk adjustment program in the individual and small group markets.”   

A copy of the final rule can be viewed here.

Sources:

  1. https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2018-Press-releases-items/2018-07-24-2.html
  2. https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2018-Press-releases-items/2018-07-07.html#
  3. https://www.reginfo.gov/public/do/eoDetails?rrid=128291

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