OR WAIT 15 SECS
Several lawsuits have been filed by qualified health plans offering coverage on the Affordable Care Act health insurance exchanges.
Several lawsuits have been filed by qualified health plans (QHPs) offering coverage on the Affordable Care Act (ACA) health insurance exchanges. The QHPs are seeking risk corridors payments, a risk sharing protection provision established under the ACA to help stabilize the health insurance market.
The risk corridors payments, as designed, are meant to transfer money from QHPs with lower than expected losses to QHPs with losses above certain benchmarks. Because losses have exceeded amounts paid into the program and additional funds have not been appropriated, CMS paid only 12.6% of the $2.87 billion owed QHPs for 2014 and payments for subsequent years are uncertain.
At least six QHPs have filed lawsuits to require CMS to pay the full amounts:
With the exception of the CoOportunity case filed in federal district court, the lawsuits were filed in the U.S. Court of Federal Claims. The court of claims is a special court that can award money damages from the federal government. A standing appropriation provides funds awarded by the court of claims. As a result, if the QHPs prevail, the risk corridors payments can be paid despite the lack of an appropriation funding risk corridors.
The government filed a motion to dismiss the HRIO case, claiming there is no deadline to make risk corridors payments, so the case is premature. Similar motions can be expected in the other cases. Other QHPs are likely following these cases. If the government’s motion fails, more suits can be expected. The federal government may also seek a global solution outside or as part of the court proceedings.
The risk corridors cases are more evidence of the broad scope of the ACA and that issues relating to its implementation remain unsettled.
Deborah Dorman-Rodriguez is a partner at Freeborn & Peters LLP, and serves as leader of the firm’s Healthcare Practice Group.
David Kaufman is a partner at Freeborn & Peters LLP, and serves as a key member of the firm's Healthcare Practice Group.