Justice Department seeks dismissal of Moda, BlueCross BlueShield risk corridor lawsuits
DOJ is arguing no deadline was established for HHS to pay risk corridors payments.
Department of Justice-Washington, D.C.
The Department of Justice has filed a motion to dismiss a lawsuit filed by Moda Healthcare that claims it is owed more than $191 million in the risk corridors program.
The DOJ has filed a similar motion to dismiss the claim of BlueCross BlueShield of North Carolina, according to published reports.
Numerous insurers are seeking to recover money they said was promised in the Health and Human Services program for taking on the risk of offering products on the exchanges. Enrollees signing up for Obamacare were sicker and needed more costly care than was originally projected, payers have said.
[Also: No risk corridors payments for 2015 plan year]
Moda is seeking more than $191 million for the 2014 and 2015 plan years, according to the DOJ's motion to dismiss. Moda has received only a portion of the amount alleged to be due.
In its argument, the DOJ is arguing no deadline was established for HHS to pay risk corridors payments. Moda may still receive the full amount of its claims, the DOJ said.
The Affordable Care Act established the risk corridors program for three years, starting in 2014. Before payments could be made, in December 2014, Congress determined the program would be budget neutral.
For fiscal years 2015 and 2016, there would be no payment for risk corridors other than what Health and Human Services collected in payments from plans that paid money into the program.
[Also: Insurers shortchanged $2.5 billion in CMS shared-risk corridor program]
On Oct. 2, 2015, HHS said collections for 2014 were expected to total $362 million, while payments calculated totaled $2.87 billion. HHS said it could only pay 12.6 percent of the payments for 2015. HHS expects to pay additional installments for 2014 in 2016 and 2017.
The DOJ also argued that insurers have no contract with Health and Human Services. All health plans are required to participate, but there are no risk corridors contracts.
"Nothing in the ACA or HHS's regulations grants authority to HHS to enter contracts for payment of risk corridors," the DOJ said.
The motion was filed Sept. 30 by Attorney Phillip Seligman, of the DOJ Civil Division, Commercial Litigation Branch.
[Also: Land of Lincoln joins co-ops shutting down due to risk corridor payments]
In June, Blue Cross Blue Shield of North Carolina sought $130 million from the government for payments owed for 2014. The insurer also wanted assurances that full risk corridor payments for 2015 and 2016 would be made. BCBS of North Carolina estimated the government would owe it more than $175 million for 2015.
The DOJ has indicated it wants to negotiate a broad settlement with the estimated 175 health plans selling coverage on the ACA marketplaces, according to the Washington Post.
Twitter: @SusanJMorse
