- Health Care Service Corporation, a major operator of multiple Blue Cross Blue Shield plans, has sued the federal government over Affordable Care Act risk corridor payments. The company is alleging it is owed more than $2 billion, according to a lawsuit in the U.S. Court of Federal Claims.
- HCSC said it provided health insurance coverage to more than 1 million people who shopped for exchange plans in five states between 2014 and 2016. But when the risk corridor bill came due, "the Defendant balked," the company said of HHS and CMS.
- HCSC is alleging breach of contract due to the federal government's failure or refusal to pay risk corridor payments in 2014, 2015 and 2016, according to the Friday filing.
Risk corridor payments were designed to keep health insurers whole and to entice them to sell health insurance plans on the newly created exchanges established under the ACA.
Since the law barred insurance companies from selling coverage based on health status of consumers, the government used risk corridor payments as a way to ease insurers concerns about providing coverage to a relatively new group (individuals untethered from employer plans).
Essentially, the idea was to have insurers pay into a pool to help make insurers whole who experienced costs greater than the premiums they collected in a given year.
HCSC "reasonably expected the federal government to live up to its part of the deal," the lawsuit alleges.
However, HCSC's lawsuit comes at an interesting time. It was filed months after the U.S. Supreme Court already heard arguments in a similar case brought by a group of insurers who argued they are owed more than $12 billion.
It's likely a Supreme Court win for this group of insurers would lead to a domino effect for other payers and result in a payout for HCSC or others who filed suit, Katie Keith, a healthcare legal expert at Georgetown University, told Healthcare Dive.
"I assume they expect a positive ruling from the Supreme Court and want to be in line to collect what they are owed. So it seems like a pretty strong indicator that they think the Court will rule for the insurers," Keith said.