Dive Brief:
- A case brought by Iowa Insurance Commissioner Nick Gerhart, liquidator of the state's failed ACA co-op CoOpportunity Health, took a blow in an August 12 decision by Judge Rebecca Ebinger of the U.S. District Court for the Southern District of Iowa, according to a new Health Affairs blog.
- Gerhart is attempting to recover reinsurance and risk corridor money owed to CoOpportunity Health by the federal government, while the government is withholding the money to offset what the insurer owes for its startup and solvency loans and risk adjustment.
- Ebinger decided not to grant Gerhart's requested motion for a preliminary injunction against the HHS that would have required it to comply with Iowa's court handling of the liquidation proceedings.
Dive Insight:
The CoOpportunity case has some unique aspects compared to other related cases being brought by insurers against the federal government over risk corridor and risk adjustment funds. However, if it stands as an early example of how such cases are going to play out "litigation challenging the risk adjustment program, at least, could face an uphill battle," Jost suggested.
The preliminary injunction decision was particularly interesting, Jost suggested, because of how the judge balanced the questions of harm and public interest, focusing on how any funds lost to HHS would disrupt the risk adjustment program because they wouldn't then be available to be paid out to other insurers.
Illinois' failed co-op Land of Lincoln Health also recently made waves with its case against the federal government following its failed last-ditch attempt to stay afloat by getting the government to consider taking the $32 million the insurer was being asked to pay into the risk-adjustment program from the more than $70 million it said the government still owed it under risk corridors.
Related lawsuits have been launched this year by Health Republic Insurance, Highmark, as well as Blue Cross and Blue Shield of North Carolina and Moda Health Plans.