7/24/2023 0 Comments Andy slavitt cms![]() On Saturday, CMS issued a press release indicating that Browning’s February ruling “prevents CMS from making further collections or payments under the risk adjustment program, including amounts for the 2017 benefit year, until the litigation is resolved.” Judge James Browning vacated that portion of the risk adjustment formula for the years 2014 through 2018, and remanded the matter back to HHS and CMS for further proceedings. However, a few weeks later, on February 28, another federal district court in New Mexico granted partial summary judgement in favor of New Mexico Health Connections, ruling that one element of the risk adjustment formula-the use of statewide average premium (discussed further below)-violated the Administrative Procedure Act as arbitrary and capricious. Judge Dennis Saylor ruled that the Department of Health and Human Services (HHS) did not act in an arbitrary and capricious manner when setting the risk adjustment formula. On January 30, a federal district court in Massachusetts ruled in favor of the federal government with respect to Minuteman Health’s case. Two co-ops-Minuteman Health in Massachusetts (now in receivership) and New Mexico Health Connections-sued to challenge the risk adjustment formula. A 2016 House Energy and Commerce Committee oversight report noted that many co-ops faced major losses, because they faced massive (and unexpected) payments in to the risk adjustment program.Ī July 2016 analysis concluded that “for most co-ops, these recently announced risk adjustment payments have made a bad situation worse, and for a subset, they may prove to be the proverbial last straw.” Indeed, most Obamacare co-ops failed, and the risk adjustment methodology proved one reason. Regardless of whether certain insurers had successfully “gamed” the risk adjustment formula, the program led to significant losses for many Obamacare co-ops-non-profit insurers created by the law. The small carriers complain that larger insurers do a better job of documenting their enrollees’ health conditions (e.g., diabetes, etc.), entitling them to larger risk adjustment payments. Since the Obamacare exchanges began operations in 2014, many newer and smaller insurers say that the federal risk adjustment formula unfairly advantages incumbent carriers-in many cases, local Blue Cross Blue Shield plans. Without risk adjustment, plans would have perverse incentives to avoid enrolling sick people, due to the Obamacare regulations that require insurers to accept all applicants, and prohibit them from charging higher premiums due to health status. In general, risk adjustment transfers funds from insurers with healthier-than-average enrollment to insurers with sicker-than-average enrollment. Unlike the risk corridor and reinsurance programs, which lasted only from 2014 through 2016, Obamacare made the risk adjustment program permanent. This legal dispute involves risk adjustment payments, one of the three “Rs” Obamacare created. ![]() If Slavitt wants to denounce the supposed “sabotage” of Obamacare, he need look no further than the nearest mirror. The Trump administration took actions to comply with a federal court order that vacated rules promulgated by the Obama administration-including rules CMS issued when Slavitt ran the agency. Unfortunately for Slavitt, the facts suggest otherwise. This is aggressive and needless sabotage of the ACA. Over the weekend, former Centers for Medicare and Medicaid Services (CMS) acting administrator and Obamacare defender Andy Slavitt took to Twitter to denounce what he viewed as the Trump administration’s “aggressive and needless sabotage” of the health care law:īREAKING: Trump aims severe blow at ACA, says payments for insuring sicker individuals (called risk adjustment) will not be paid for prior years.
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