Dive Brief:
- A controversy is brewing in Massachusetts over risk adjustment provisions in the Affordable Care Act. The law applies to every state, but only Massachusetts is using its own methodology rather than the federal model.
- According to the Massachusetts Association of Health Plans, the state is using inappropriate data and methodology, that benefits the dominant market insurer, Blue Cross Blue Shield of Massachusetts, at the expense of smaller insurers. Specifically, the association suggests that the data contains duplications and errors.
- Now that data simulations have given insurers insight into potential penalties, the association has pushing the state to ask the federal government to allow the state a one-year delay in the risk-adjustment program.
Dive Insight:
The latest data simulations suggest the nine members of the Massachusetts Association of Health Plans affected by the risk adjustment program will all be required to make payouts, estimated at a total of $82.5 million this year, according to association spokesman Eric Linzer. The majority of that money is expected to go to Blue Cross Blue Shield.
Andreana Santangelo, Blue Cross senior vice president and chief actuary, says the company covers a disproportionate share of the sickest, most expensive patients, and expects to receive compensatory payment.
Critics suggest the data doesn't appear make sense and that it's penalizing the health plans that are most innovative and have done the most to help members get healthy and stay healthy. Stay tuned—this debate likely isn't over yet.