A federal claims judge ruled last week that the federal government owes insurer Moda Health $214 million as part of its participation in the Affordable Care Act's risk-corridor program.
The decision, issued by U.S. Court of Federal Claims Judge Thomas Wheeler, is a victory for the Portland, Ore.-based insurer, which has faced pushback from the federal government since it filed the suit in June 2016.
That decision, however, flies in the face of another federal judge's ruling to dismiss a case brought forth by Land of Lincoln Mutual Health Insurance Co., which sued to recoup $72.8 million in risk-corridor payments. The CMS paid the co-op more than $550,000. The judge said the insurer was not entitled to any more.
The judges in the two cases appear to disagree on the CMS' legal obligation to pay risk-corridor payments, which were a budget-neutral program meant to buoy insurers that took on sicker-than-average individuals in the exchanges. In his decision on behalf of Moda, Wheeler said, “The Government made a promise in the risk-corridors program that it has yet to fulfill.” But Federal Claims Judge Charles Lettow in the Land of Lincoln case ruled the risk-corridor program agreements aren't binding contracts.
In a strongly worded declaration to the federal government, James Francesconi, Moda's vice president of public policy, said “Until the government fulfills its risk-corridor obligations, Moda cannot expand its operations or otherwise conduct business as in the past and as planned.”
The CMS has paid Moda $11.3 million so far. The insurer sued for $191 million in overdue risk-corridor payments. —Maria