Evergreen Health goes into receivership
- A Baltimore judge has placed Evergreen Health into receivership following last week’s sudden collapse of a plan to rescue the struggling insurance company, Washington Business Journal reports.
- Maryland Insurance Commissioner Al Redmer requested the order and Baltimore City Circuit Court Judge Yolanda Tanner agreed, putting Connecticut-based Risk & Regulatory Consulting (RRC) in charge of Evergreen’s operations as it considers next steps. The firm could dissolve or seek new investors to acquire it.
- Under the rehabilitation plan, RRC will continue to provide coverage to Evergreen’s remaining 25,000 policyholders for the remainder of this year. Maryland’s insurance administration has barred Evergreen from participating in the 2017-2018 enrollment period beginning in November.
Evergreen, once a shining star among the 23 co-ops established under the Affordable Care Act, had been trying to switch to for-profit status since October following a financial crisis earlier last year. In August, a U.S. appeals court ruled the firm must pay a $24.2 million bill for the ACA’s controversial risk-adjustment program, despite a pending lawsuit against CMS that challenged the program’s payment methodology.
In June, Redmer signed an administrative order allowing Evergreen to be acquired by JARS Health Investments, Anne Arundel Health System and BH Evergreen Holdings. The decision followed testimony by the investors that keeping the insurer in the individual market would be good for competition and that the insurance business complements their long-term strategic goals.
On July 27, Redmer blocked Evergreen from making future payments or asset transfers after the investors backed out, citing new financial information that raised concerns about the deal.
Before receiving the $24.2 million bill from CMS, Evergreen had been on track to make a profit of $2-$3 million in 2016. Two other co-ops, New Mexico Health Connections and Massachusetts-based Minuteman Health have also filed lawsuits challenging CMS’ payment methodology for the risk-adjustment program.
Evergreen was dropped from Maryland’s 2017 individual insurance market due to its shaky financial status, but had hoped to be in back in business as a for-profit for 2018. One of three prospective investors, JARS Health Investments, is reportedly still considering options.
- Maryland Insurance Administration Court Issues Order Regarding Evergreen Health, Inc.
- Washington Business Journal Evergreen Health put into receivership