Week in Washington: Risk Corridors at the Supreme Court

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Week in Washington: Risk Corridors at the Supreme Court


Risk Corridor Case

This week the US Supreme Court heard arguments to help settle the fate of at least $12 billion potentially owed to insurers. The ACA risk corridor program was a three-year program designed to compensate insurers from excessive losses during the initial three years of ACA implementation (2014 to 2016). During these initial years insurers incurred large financial losses but received almost no risk corridor money as Congress never appropriated funding for the program in the ACA. The result is that HHS owes insurers approximately $12 billion in risk corridor payments. As a result, insurers sued HHS for the unpaid amounts.

The Supreme Court oral hearing this week went very well for insurers according to a number of observers. If the Supreme Court would rule in the insurers’ favor (ruling expected in the summer of 2020) insurers would receive the risk corridors owed. Furthermore, a victory in the risk corridor case would be considered a good omen for the pending litigation for unpaid CSR funding (especially for 2017). If insurers are victorious, it is likely that CMS will release guidance on how the risk corridor payments would be included in MLR calculations.


More ACA News

  • CMS released a White Paper on potential options for adjusting its ACA risk adjustment data validation (RADV) program.
  • Open Enrollment ends in the majority of states on December 15. CMS typically releases data on the Exchanges it operates the following week.


Prescription Drug News

The House of Representatives passed HR 3 that would decrease prescription drugs and remodel the Part D benefit this week. The expectation though is the Senate will not pass this legislation. Senate Republicans are considering an alternative option but with only a handful of days left in 2019, passage of anything prescription drug related looks dim.

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