Maine CO-OP adds to growing list of risk corridor payment lawsuits

gavel and books

The list of consumer operated and oriented plans (CO-OPs) suing the federal government just got longer.

Maine Community Health Options (MCHO) is the most recent nonprofit insurer to file a lawsuit against the feds, claiming it's owed $22.9 million in risk corridor payments that never materialized.

According to the complaint, the Centers for Medicare and Medicaid Services has already acknowledged MCHO is owed more than $211,000 in risk corridor payments from 2014. The nonprofit insurer says it’s owed an additional $22.7 million for participating in Affordable Care Act marketplaces in both Maine and New Hampshire.

“We at Health Options have followed the law and helped expand the Maine and New Hampshire markets and make them leaders in terms of individual coverage through the marketplace,” MCHO CEO Kevin Lewis said in a written statement to the Portland Press Herald. “It’s important for the government to make good on its payment obligations.”

Maine’s CO-OP showed promise during the first year of ACA exchanges and was viewed as one of the few success stories among the 23 nonprofit insurers before sustaining heavy losses throughout 2015. MCHO blames its recent struggles on the government’s failure make good on risk corridor payments designed to mitigate losses in the first three years of the state exchanges. In 2014, the feds paid out just $362 million of the $2.87 billion owed to insurers after a GOP spending bill capped risk corridor payments.

MCHO joins a growing list of CO-OPs and for-profit insurers that have taken legal action over risk corridor shortfalls. Just last week, CO-OPs from Massachusetts and New Mexico each filed claims, adding to lawsuits from Evergreen Health in Maryland, Health Republic Insurance of Oregon, Land of Lincoln Health in Illinois, Highmark and Blue Cross Blue Shield of North Carolina.

- read the MCHO compliant
- here’s the Portland Press Herald article