► Minuteman Health NewsroomNovember 2, 2016

Minuteman Health Sues Federal Government for $5.5 Million in Unpaid Risk Corridor Payments

Company Claims "Double Standard": Government Refuses to Make Risk Corridor Payments While Demanding Insurers to Pay Full Risk Adjustment Assessments

Boston—Minuteman Health (www.minutemanhealth.org) has filed a lawsuit against the federal government in an attempt to secure $5.5 million in payments owed to the insurer under the Affordable Care Act’s Risk Corridor program. The figure represents the total amount of Risk Corridor payments owed to Minuteman for 2014 and the estimated amount for 2015.

Minuteman’s 2017 rates will increase an average of 4.2 percent, compared to an 11.1 percent increase for Harvard Pilgrim and 13.9 percent increase for Anthem, as reported by the Manchester Union Leader. The most expensive Minuteman Silver plan is 15 percent less expensive than the closest competitor Silver plan, and the most expensive Minuteman plan of all—it’s new top-tier HMO Platinum Extra Value plan—is less expensive than the closest competitor’s lower-tier Gold plan. The Platinum Extra Value Plan was created to provide extra support and health benefits to consumers living with chronic health conditions like asthma, hypertension and diabetes.

The figure represents the total amount of Risk Corridor payments owed to Minuteman for 2014 and the estimated amount for 2015.

“The amounts owed to Minuteman are expressly provided for by statute, regulation, and contract,” the lawsuit states. “They are specifically determinable as an accounting matter. And they are not in dispute. The Government has acknowledged its obligations to make full risk corridors payments to Minuteman (and other insurers) and has recorded or will record those amounts as payment obligations of the Government. Nevertheless, the Government has failed to pay the acknowledged amounts, and has publicly acknowledged that it does not anticipate meeting its future obligations either.”

The lawsuit points out that that the Risk Corridor and Risk Adjustment programs are intended to work in tandem, with the payments required by Minuteman under the latter partially offset by government payments to Minuteman under the former.

“The Government, however, has rejected this basic common sense approach, instead applying a double standard: Minuteman must meet its payment obligations, but the Government need not make good on its debts,” the lawsuit states.

The government has paid Minuteman and other issuers just 12.6 percent or less of Risk Corridor amounts due for 2014 and recently announced that it will pay nothing for 2015. In addition, the government is now asserting – despite its early representations to the contrary – that full payment is limited by available appropriations, even though no such limits appear anywhere in the ACA or its implementing regulations or in Minuteman’s contracts with the government.

“One minute the federal government is promising to fulfill its requirements under the risk corridor statute. Then the government changes its mind and says it won’t. It is no wonder that premiums are going up in this unstable, unpredictable environment,” said Susan Brown, General Counsel and Chief Administrative Officer of Minuteman.

The lawsuit charges the government with violating Minuteman’s Fifth Amendment rights by taking the company’s property in the form of forced Risk Adjustment payments without just compensation.

In July Minuteman filed a lawsuit against the federal government claiming that the federal Risk Adjustment program had illegally cost the company and its members millions of dollars. The company in June was ordered to pay out $16.7 million under Risk Adjustment formula.

Minuteman has emerged as a national leader in the effort to push for reform of the government’s 3Rs program (Risk Adjustment, Risk Corridor and Reinsurance). The company founded CHOICES, a national coalition of health insurance companies focused exclusively on working with the federal government on 3R reform efforts.

 

About Minuteman

Minuteman Health, Inc. is non-profit health maintenance organization (HMO) committed to removing inefficiencies from today’s health insurance system to provide high-quality care, cut administrative costs and reduce premiums for individuals and businesses in Massachusetts and New Hampshire.

Minuteman Health’s In-Plan Provider network includes over 11,300 hospitals, physicians, and specialists who provide high quality care at lower costs in Massachusetts and New Hampshire. Updates on Minuteman Health’s evolving provider network can be found at www.minutemanhealth.org.

Minuteman is marketed in Massachusetts through its website, brokers, Health Services Administrators (www.HSAinsurance.com) and the Massachusetts Health Connector. It is marketing in New Hampshire through its website, brokers, and the Federal Healthcare Exchange.

 

About CHOICES

CHOICES members are non-profit as well as investor-owned, health system-sponsored and independent, and newer entrants as well as companies with decades of experience as members of their local communities. The group came together to examine what gaps may exist between the policy intent and the practical reality of the ‘3Rs’ programs today. Such gaps are to be expected in any launch of a new methodology, and CHOICES looks forward to continuing to work productively with CMS to replace old assumptions with the current data.

CHOICES founding members include Minuteman Health, Health New England (Massachusetts), HealthyCT (Connecticut), Land of Lincoln (Illiniois), Melody Health Care (Colorado), New Mexico Health Connections, Evergreen Health (Maryland), Bright Health Plans (Minnesota), Cox Health Plans (Missouri), Medical Associates Health Plans (Iowa), and the National Alliance of State Health CO-OPS (NASHCO).
 
 

Media Contact:
Jim Borghesani
617-833-9327

jim@pri-media.com
 

Lisa McTighe
Director of Marketing and Communications
855-644-1776

lisamctighe@minutemanhealth.org

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