Federal court rules Molina owed risk-corridor payments
A federal claims judge ruled Friday that the federal government must pay insurer Molina Healthcare $52 million in risk-corridor payments under the Affordable Care Act.
Judge Thomas Wheeler of the U.S. Court of Federal Claims rejected the government's argument that riders attached to appropriations bills in 2015 and 2016 barred it from making full risk-corridor payments.
The decision marks the second risk-corridor win for insurers. The same judge in February ruled that Portland, Ore.-based Moda Health is owed $214 million in risk-corridor payments.
More than two dozen similar cases are pending in federal claims court, brought by insurers who were denied payments they say they are owed the program. The courts have split on the issue, with the government scoring three wins.
The federal government's risk-corridor claims tab is now up to roughly $8 billion for 2014 and 2015. The program was meant to help offset insurers' losses during the early years of the insurance marketplaces. It works by requiring profitable insurers to pay funds into the program, while plans with higher medical claims receive money. Congress later made the program budget-neutral.
On Monday, the federal claims court dismissed a case brought by Maine Community Health Options, concluding that the government did not owe the insurer $23 million in risk-corridor payments because Congress barred the use of appropriated funds to pay any amounts due under the program beyond those already paid.
In his decision, Judge Eric Bruggink wrote that Congress' appropriation riders blocked the government's obligation to make risk-corridor payments to insurers beyond the funds collected from insurers during 2015 and 2016.
But Wheeler argued in his Molina opinion that "Congress did not clearly or adequately express an intent to make the program 'budget neutral' in the appropriations riders," given the mandatory obligation outlined in the ACA.
The court has also dismissed cases brought by insurers Land of Lincoln Health and Blue Cross and Blue Shield of North Carolina.
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