The risk-adjustment program was established under the ACA to encourage insurers to participate in the ACA marketplace and accept all customers without charging more for high-cost patients. It also was put in place to protect insurance companies from major losses. The program collects money from insurers with fewer high-cost members and transfers it to insurers with more high-cost members.
CMS, a department of HHS that oversees the risk-adjustment program, announced it was suspending the program July 7 after a federal court decided the formula to determine risk-adjustment payments was flawed. The decision sparked an immediate outcry from insurers, which rely on the payments. For the 2017 benefit year, these payments amounted to $10.4 billion.
CMS reversed course and released a rule July 24 that offers further explanation of the program’s methodology to prevent turmoil in the insurance market, according to The New York Times.
More articles on payers:
Cigna CEO David Cordani: 3 quotes on Express Scripts deal
UnitedHealth enters Massachusetts’ ACA exchange after nationwide pullback
NovuHealth selects 1st-ever chief product officer
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.