Press release: United States District Court Ruling Puts Risk Adjustment On Hold

“On February 28, 2018, the United States District Court for the District of New Mexico issued a decision invalidating use of the statewide average premium by the Center for Medicare & Medicaid Services (CMS) in the risk adjustment transfer formula established under section 1343 of the Patient Protection and Affordable Care Act for the 2014 – 2018 benefit years, pending further explanation of CMS’s reasons for operating the program in a budget neutral manner in those years. The 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.”

“In light of a contrary decision by the United States District Court for the District of Massachusetts, the government moved the New Mexico district court to reconsider its decision, and CMS is currently awaiting the court’s ruling. CMS is seeking a quick resolution to the legal issues raised and will inform stakeholders of any update to the status of collections or payments at an appropriate future date. The calculated risk adjustment transfer amounts for the 2017 benefit year are $10.4 billion, which includes transfers across catastrophic, small group, and individual non-catastrophic risk pools…”

“Timeline of Key Events

March 23, 2010 – The Patient Protection and Affordable Care Act (PPACA) is signed into law by President Obama.

March 11, 2013 – CMS finalizes a risk adjustment methodology for States where HHS operates the program that includes the use of the statewide average premium in order to maintain a budget neutral program…” Read the full announcement here.

Source: United States District Court Ruling Puts Risk Adjustment On Hold – July 7, 2018. CMS.gov.

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