Things have gone from bad to worse for the Affordable Care Act’s health-care co-op experiment.
Maryland’s co-op, Evergreen Health, filed a first-of-its-kind lawsuit in June against the federal government claiming that private insurers have gamed the system to avoid making “risk adjustment payments.” Under the ACA, insurers with healthier members must make these payments to insurers with unhealthier members. But Evergreen CEO Peter Beilenson argues that his co-op was unfairly labeled as healthier because private insurers encouraged their less healthy members to go to the doctor so their patient pools would appear less healthy. Evergreen is now expected to owe between $18 million and $22 million in risk adjustment payments.
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Lawyers well versed in federal health policy are skeptical that a handful of insurers will triumph in their lawsuits against the Obama administration over two separate but similar payment provisions of the Affordable Care Act (ACA).
Six insurers, including several of the ACA-created Consumer Operated and Oriented Plans, or CO-OPs, are suing the administration over money, while a number of others are 23 Comments lawsuits.
The insurers are suing over the ACA’s risk corridor and risk adjustment programs, which make up two of the “three Rs” built into the law to compensate insurers for losses stemming from market volatility in the first few years of ACA implementation.
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Health insurers in New Mexico and other states are gearing up for a legal fight with the Obama administration over millions of dollars the insurers both owe and are owed under separate provisions of the Affordable Care Act (ACA).
New Mexico Health Connections, the state’s Consumer Operated and Oriented Plan, or CO-OP, confirmed to The Hill that it is working with lawyers to frame lawsuits on both ObamaCare’s risk-adjustment and risk-corridor provisions, which make up two of the so-called three Rs of the ACA’s premium stabilization program.
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The battle between congressional Republicans and the White House over the Affordable Care Act is again escalating—in court and on Capitol Hill.
The administration on Wednesday appealed a federal trial judge’s ruling that the government is improperly reimbursing insurers under a program to cover discounts for low-income consumers.
And House Republicans on Thursday began two days of hearings to hammer away at the issue. They released a report that said the administration distributed the funds even though it was aware it needed Congress’s approval.
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The Obama administration suffered a setback in its efforts to strengthen the individual insurance market when a federal appeals court last week struck down an HHS rule barring the sale of certain limited-benefit plans as stand-alone products.
In Central United Life v. Burwell, the U.S. Court of Appeals for the District of Columbia Circuit overturned a 2014 HHS rule restricting the sale of fixed-indemnity insurance plans that pay policyholders fixed dollar amounts to cover medical services regardless of how much the provider bills. These plans, which are cheaper to buy than comprehensive plans but exclude pre-existing conditions, do not comply with Affordable Care Act provisions on minimum essential benefits or guaranteed issue.
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A federal appeals court has ruled that consumers must be allowed to buy certain types of health insurance that do not meet the stringent standards of the Affordable Care Act, deciding that the administration had gone beyond the terms of federal law.
The court struck down a rule issued by the Obama administration that barred the sale of such insurance as a separate stand-alone product. “Disagreeing with Congress’s expressly codified policy choices isn’t a luxury administrative agencies enjoy,” the United States Court of Appeals for the District of Columbia Circuit said on Friday in a decision that criticized “administrative overreach” by the Department of Health and Human Services.
At issue is a type of insurance that pays consumers a fixed dollar amount, such as $500 a day for hospital care or $50 for a doctor’s visit, regardless of how much is actually owed to the provider.
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Last year, healthcare leaders had their eyes trained on one big case – King v. Burwell – and they celebrated when the justices voted to uphold a key provision of the Affordable Care Act.
This year wasn’t nearly so straightforward for healthcare leaders watching the Supreme Court, which wrapped up its latest term last week. At least half a dozen notable cases fragmented healthcare wonks’ attention. The outcomes of those cases left some in the industry cheering and others wringing their hands.
Healthcare-related cases focused on abortion, the ACA’s contraception mandate, patents, unions, claims data and the False Claims Act, among other topics. And the mid-term death of Justice Antonin Scalia looks to have affected the outcomes of some of those cases.
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Friday, the U.S. Court of Appeals for the D.C. Circuit released two opinions in Patient Protection and Affordable Care Act (PPACA) cases. In one case, the federal government prevailed. In the other, it did not.
In the first case, West Virginia v. Department of Health and Human Services, a unanimous panel concluded that the state of West Virginia lacks Article III standing to challenge the Obama administration’s decision to waive some of the PPACA’s requirements governing minimum coverage requirements. This litigation responds to the Obama administration’s response to outrage over insurance plan cancellations — cancellations that were politically problematic because they revealed that the president’s promise that “if you like your health insurance plan, you can keep it” was a lie. (Indeed, it was Politifact’s “Lie of the Year” for 2013.)
In a second case decided Friday, the administration did not fare so well. In Central United Life Insurance, Co. v. Burwell, another unanimous panel invalidated an HHS regulation for exceeding the scope of its delegated powers under the Public Health Service Act (PHSA), as amended by the PPACA. Specifically, HHS had adopted regulations seeking to prevent consumers from obtaining fixed indemnity policies that fail to satisfy the PPACA’s minimum essential coverage requirements, despite the PHSA’s exemption of such plans from such requirements.
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Maryland’s health cooperative filed a lawsuit Monday seeking to block the federal government from requiring it to pay more than $22 million in fees for a program designed to cover insurance company shortfalls.
The lawsuit by Evergreen Health Cooperative Inc. is the latest twist in the saga of health insurance co-ops set up under the Affordable Care Act to compete against larger, established insurers.
The co-ops were supposed to help keep premiums down by injecting competition into the industry. Instead, 13 of 23 startups that launched successfully have since collapsed, forcing more than 700,000 consumers to seek new insurance. A number of co-op officials have said they were hurt by the federal program because of a formula it used to spread out risk, which they say hurts them while benefiting large, already established insurance companies.
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Blue Cross and Blue Shield of North Carolina sued the federal government, becoming the latest health insurer to claim it is owed money under the Affordable Care Act.
The suit, filed on Thursday in the U.S. Court of Federal Claims in Washington, D.C., says the U.S. failed to live up to obligation to pay the insurer more than $147 million owed under an ACA program known as “risk corridors,” which aimed to limit the financial risks borne by insurers entering the new health-law markets.
The suit argues that the federal government violated the language of the health law, as well as a contractual obligation to the North Carolina insurer.
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