PPACA Toolbox (AP Photo/Jacquelyn Martin)

The Supreme Court associates may already know whether the Patient Protection and Affordable Care Act of 2010 (PPACA) is alive, dead or both.

Meanwhile, while the U.S. Department of Health and Human Services (HHS) is waiting for the outcome of the PPACA constitutionality cases, the regulatory show must go on.

An HHS arm, the Center for Consumer Information & Insurance Oversight (CCIIO), is organizing a big, two-day meeting for parties with an interest in the PPACA risk adjustment program. 

The meeting, which is set to start May 7 in a hotel in Arlington, Va., is open to the public, but space is limited, CCIIO officials warn in a PPACA risk adjustment meeting notice that appears today in the Federal Register.

“Registration will be on a first-come, first-serve basis, limited to three attendees per organization,” officials say.

At the meeting, the CCIIO will bring together state officials, insurance company executives, and other interested parties to talk about the nuts and bolts of a “federal risk adjustment methodology” now under development.

Participants will talk about the risk adjustment model, calculation of plan average actuarial risk, calculation of payments and charges, data collection approach, and the schedule for running risk adjustment. Stakeholders will get a chance to communicate with HHS about the risk adjustment program, officials say.

HHS and the CCIIO are holding the meeting in connection with efforts to implement PPACA Section 1343.

PPACA drafters included Section 1343 in the act in an effort to protect health insurers against the effects of new market rules that are supposed to kick in starting in 2014.

Observers expect the Supreme Court to rule on the constitutionality of PPACA — or decline to rule on the constitutionality of PPACA — by June.

If PPACA takes effect on schedule and works as drafters expect, the law will require insurers to sell individual coverage on a guaranteed-issue, mostly community-rated basis. The law also is supposed to set up a new system of health insurance distribution exchanges

PPACA drafters have tried to decrease the likelihood that sicker people will buy health insurance and healthier people will get insurance only when they think they will be sick by requiring most individuals with incomes over a certain level to own health coverage.

The individual health coverage ownership mandate has angered people who believe the federal government has no constitutional authority to force them to buy a commercial product. Others say the penalty for doing without health coverage is low enough that many will continue to go uninsured, leading to possible problems with antiselection.

HHS and CCIIO officials have gotten the attention of insurers by implementing PPACA provisions that call for the creation of three risk management programs that would involve having some health carriers transfer cash to other entities.

  • A temporary, federally run “risk corridors” program that will require the health plans participating in the new health insurance distribution exchanges to share in health care system losses and gains with the federal government.
  • A temporary, state-based reinsurance program that will require all health insurers in a market to contribute to a fund that will protect individual health insurers.
  • A permanent risk-adjustment program that will redistribute cash from plans with relatively low-risk enrollees to plans with older, sicker enrollees.