Risk corridor case certified as class action

Dive Brief:

  • A lawsuit filed against the federal government by the Health Republic Insurance Company over money that is allegedly owed through the risk corridor program has been certified as a class action.

  • The class action certification allows all payers who were supposed to receive risk corridor payments for the 2014 or 2015 benefit years to join the lawsuit.

  • In 2015, the government only paid out about 12.6% ($96 million out of nearly $6 billion) of the money owed to payers under the risk corridor program. 

Dive Insight:

The lawsuit brought against the government by the Health Republic Insurance Company is one of more than a dozen filed by payers over money owed through the risk corridor program. In November, CMS quietly revealed that the government would only pay 2% of the $5.9 billion it owed through the program for 2016.

With the Obama administration on its way out and the Trump administration taking over with plans for repealing the ACA on the table, it is unclear how the government will proceed in legal proceedings over the risk corridor program. The government had indicated a willingness to settle these suits, but has been defending them in court, as Timothy Jost reported in Health Affairs.

The legislation puts the Trump administration in an awkward position. Settling with payers over risk corridor payments could be seen as a bailout. However, fighting the lawsuits in court would mean defending a law that President-elect Trump has harshly criticized.

Filed Under: Health Law Policy & Regulation