(CNN)The Trump administration announced Saturday that it will temporarily halt billions of dollars in payments under the Affordable Care Act’s risk adjustment program, a move that could shake up insurance markets.
The Centers for Medicare and Medicaid Services (CMS), the agency that oversees the program, cited a recent federal court decision that found the formula for calculating the risk adjustment payments to be flawed. In a March 2018 ruling out of New Mexico, US District Court Judge Thomas Browning that the methodology used by the federal government was “arbitrary and capricious” and remanded it back to the agency, according to Lexis Legal News.
“We were disappointed by the court’s recent ruling,”” CMS Administrator Seema Verma said in a statement. “As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold. CMS has asked the court to reconsider its ruling, and hopes for a prompt resolution that allows CMS to prevent more adverse impacts on Americans who receive their insurance in the individual and small group markets.”
The Wall Street Journal was the first to report the expected suspension of the payments. The payments insurers expected this fall, based on their 2017 business, amounted to $10.4 billion.
America’s Health Insurance Plans (AHIP), the trade organization representing health insurers, decried the suspension of the payments……more here