Insurers air risk-adjustment concerns in meeting with feds

A meeting late last week showed that federal officials and some health plan leaders continue to disagree over the future of the Affordable Care Act's risk adjustment program, which some say is unintentionally harming small insurers, Inside Health Policy reports.

A recent discussion paper issued by the Centers for Medicare & Medicaid Services (CMS) concluded that while the agency is looking into implementing a few changes, the risk adjustment program is "working as intended" to transfer funds from plans with healthier members to those with sicker, more costly ones. But smaller insurers have argued that the program places an unfair financial burden on them relative to larger plans.

Indeed, Martin Hickey, CEO of New Mexico Health Connections--the state's consumer operated and oriented plan--said at the meeting that the risk adjustment program's effect on small plans runs counter to the Affordable Care Act's aim.

"If the nature of the ACA is competition, you are eliminating competition while you're playing with your models," he said, according to Inside Health Policy.

But Jeffrey Grant, director of CMS' Payment Policy and Financial Management Group, pointed out that small plans actually received payments from the risk adjustment program more frequently than large ones, but they did see a greater percent of premium transferred.

Some health plan leaders, including the CEO of Maryland's CO-OP, have therefore asked the agency to limit the percentage of risk adjustment payments that insurers must make to no more than 2 percent of the carrier's premium for the year.

But at the meeting, Grant said that no one has offered a way to make such a proposal work without leading to a financial loss. Ultimately, he added, CMS is looking at how to make the program flexible "without breaking the system."

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