Dive Brief:
- The U.S. Court of Appeals for the Fourth Circuit filed a brief this week ruling that Maryland health co-op Evergreen Health must make its risk adjustment payment of $24.2 million pending its lawsuit against CMS, which challenges the program's payment methodology.
- The co-op believed it would be placed in a receivership by the Maryland Insurance Administration so it requested to delay its payment until after October 31, Modern Healthcare reported.
- Two other health co-ops -- New Mexico Health Connections and Minuteman Health of Massachusetts -- filed a similar suit last week against HHS arguing the risk adjustment program unfairly rewarded big players in the insurance market, The Wall Street Journal reported.
Dive Insight:
The ACA's risk adjustment program was established with the purposes of preventing insurers from denying coverage or charging higher premiums based on individuals' health status so that competition is centered on the value of the plans they offer. Under this program, money from insurers with lower-risk enrollees is reallocated to those with higher-risk enrollees.
Despite the program's intention to help stabilize health insurance markets, Evergreen contends the formula that CMS currently uses for scoring risk destabilizes them because it benefits "tilts the field against new and growing plans in favor of large, established insurers," CEO Dr. Peter Beilenson said in a prepared statement.
Evergreen is one of the select few co-ops created under the ACA who managed to bring in profits. In March, it reported record financial results. And spokesman Matt Jablow told Modern Healthcare the co-op is optimistic it will be able to make the risk-adjustment payment.
Earlier this year, Beilenson shared the three factors that have led to the co-op's success: a diversified book of business, “appropriately” priced individual plans rather than "aggressively," and a heavy focus on wellness and prevention.