Sunday, May 22, 2016

ACA/Obamacare: Big Loses, Risk Corridors and Lawsuits

“May 19--Highmark could soon be in good company in suing the federal government over Affordable Care Act reimbursement.

Other insurers have contacted Highmark since the Pittsburgh carrier filed a lawsuit Tuesday over reimbursement for losses incurred in providing coverage under the ACA, president and CEO David Holmberg said Wednesday. The companies are weighing their options to recoup billions of dollars they say are owed, he said.

"The losses were pretty significant," Mr. Holmberg said. "We ended up with the other companies standing here holding the bag. We saw no path forward."

Highmark, the fourth-largest Blues company and dominant provider of ACA coverage in Pennsylvania, Delaware and West Virginia, sued the federal government in the U.S. Court of Federal Claims for $223 million in losses sustained in 2014. In addition, Highmark says it will be owed another $500 million for losses on member claims by July when a government accounting is due.

Through a risk-sharing tool called risk corridors, the government had promised to pick up a share of the losses during the early years of the Affordable Care Act because insurers had little information about setting appropriate rates for a new population.

Instead, insurers received payment for only about 12.6 percent of the amount claimed -- $362 million for $2.87 billion in losses claimed by the carriers, according to Ursula Taylor, partner at the Chicago law firm of Butler Rubin Saltarelli & Boyd LLP.

"It is a holy mess," Ms. Taylor said. "This is a nationwide issue and it affects plans everywhere. Litigators are just beginning to pay attention to this."

Highmark's lawsuit is among a handful that have been filed nationwide over risk corridor reimbursement, but among only a few asserting that the government breached a contract with insurers. Other challenges have focused on the wording of the ACA, which was enacted in 2010.” - Highmark Lawsuit Could Prompt Other Insurers To Recoup ACA Losses, [via Pittsburgh Post-Gazette], 05/19/2016

Link to the entire article appears below:

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