A U.S. Court of Federal Claims judge declined the Justice Department's request to stay Portland, Ore.-based Moda Health Plan's lawsuit that seeks more than $208 million in risk corridor payments under the ACA, The National Law Journal reports.
The risk corridor program is designed to temporarily level the financial playing field for payers by limiting both unexpectedly high gains and losses associated with participating in a new insurance market. Insurers that saw greater profits paid into a pool to compensate insurers with higher losses. The three-year program, which runs through 2016, fell short by more than $2.5 billion in its first year because so many insurers experienced losses in the individual market.
The DOJ hoped to freeze Moda's case because the federal appeals court is set to rule on a similar suit involving Chicago-based Land of Lincoln Health, which seeks $75 million in risk corridor payments. The cases represent two of several lawsuits filed against the government seeking hundreds of million of dollars in risk corridor payments. In Moda's case the insurer said the delayed payments led them to withdraw from ACA exchange markets, according to the report.
Federal Claims Court Judge Thomas Wheeler said Nov. 28 the DOJ failed to show a "pressing need" to freeze Moda's case.