Trump administration backs off penalizing exchange plans for not auditing risk-adjustment program
Some insurers say they’re more likely to stay on the insurance exchanges now that a penalty against failing to report the number of severely ill patients they have has been lifted.
The Trump administration last week said it would not enforce an Affordable Care Act provision meant to prevent insurers from cherry-picking the healthiest members. The law’s risk-adjustment program allowed companies that cover people with complex health conditions to receive money from insurers that have generally healthier members.
“We think an additional pilot year without financial penalties will ultimately help issuers better operational- ize the program—and will eliminate yet another area of financial uncertainty for the coming year,” said Meg Murray, CEO of the Association for Community Affiliated Plans. Nonetheless, insurance giant Aetna plans to fully withdraw from the exchange market in 2018.
In 2015, Blue Shield of California received $182 million in payments under the risk-adjustment program. Health Net of California got $126 million and Blue Cross and Blue Shield of Florida got $369 million, federal data show.
The law required third-party auditors and HHS to confirm that plans receiving risk-adjustment payments do indeed have sicker patients. HHS has been collecting data from the plans but hasn’t held them accountable for discrepancies.
The CMS, in a little-noticed memo released May 3, said it would delay penalties for a year, until 2018.
That allows plans to incorporate key processes, procedures and technical changes, said Jeffery Drozda, CEO of the Louisiana Association of Health Plans.
Ceci Connolly, CEO of the Alliance of Community Health Plans, said some insurers don’t have federal data on the accuracy of their claims. “It hasn’t been possible to review lessons learned and strengthen the collection and reporting of diagnoses for risk adjustment,” she said. “That’s critical, given the importance of accurate diagnosis coding in determining payments and the benefit packages that plans can offer to enrollees.”