- Blue Cross and Blue Shield of North Carolina and Moda Health Plans have filed suits against the federal government over its failure to provide the full level of risk corridor payments as had been originally planned under the Affordable Care Act.
- BCBS says it's owed upwards of $147 million from 2014. Moda is owed $89,426,430 from 2014 and $101,842,405 from 2015, according to its complaint filed in the U.S. Court of Claims.
- Highmark Health filed a similar lawsuit in May, following the first by Health Republic Insurance Co. in February, which is requesting class-action status.
In February, Moda agreed to generate $179 million in order to be removed from under the control of Oregon's Department of Consumer and Business Services. The department had entered the insurer into immediate supervision because its financial condition was hazardous after losing $49.5 million in 2015 and having a shortfall of $170 million in federal risk corridors.
Earlier this month, Moda announced three transactions that raised a total of $115 million in capital.
North Carolina BCBS argues the government violated its contractual obligation to the state and violated the health law itself when it moved to alter the original parameters of the risk corridors program, which were designed to financially protect insurers during the early years of the ACA, by making it budget-neutral, resulting a massive shortfall of funds collected vs. funds owed to marketplace participants.
The program revealed in fall 2015 that it would pay out 12.6% of the money owed for the first year of 2014, saying the rest would be paid in future years, which would be too late for some insurers that have since failed or opted to leave the marketplaces.
North Carolina BCBS argued reduced or delayed payment “is contrary to the nature, purpose, intent and language” of the program as outlined in the ACA. The insurer is asking for the rest of its 2014 funding, as well as interest and legal expenses. It is also asking the government to make payments for later years when they are due.
“The federal government’s failure to honor its legal obligations contributed significantly to our ACA losses in 2014 and 2015 and makes it more challenging for our company to continue selling ACA products to our customers,” BCBSNC President and CEO Brad Wilson said in a statement.