CMS: 2017 Risk Adjustment Transfers to Begin in September
The Centers for Medicare & Medicaid Services expects to begin $10.4 billion in risk adjustment transfers for benefit year 2017 in September, according to a posted last night. The permanent risk adjustment program, created by the Affordable Care Act, transfers funds in the individual and small group health insurance markets from health plans with lower-risk enrollees to plans with higher-risk enrollees to spread the financial risk and help stabilize premiums. On July 9, CMS announced that the transfers were on hold due to litigation. In February, a federal district court in New Mexico invalidated CMS’s use of the statewide average premium in the risk adjustment transfer formula for the 2014-2018 benefit years, pending further explanation of the agency’s reasons for operating the program in a budget neutral manner in those years. The final rule adopts the previously published methodology for the 2017 benefit year with additional explanation. The agency it intends to issue a new proposed rule on the risk adjustment methodology for the 2018 benefit year. Twenty-eight health care organizations, including the AHA, last week urged CMS to reconsider its decision to suspend the risk adjustment transfers.