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Life Health > Health Insurance

Feds question insurers' PPACA aid program filings

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The Center for Consumer Information & Insurance Oversight (CCIIO) says it’s looking hard at the data health insurers filed for the risk corridors program for the 2014 plan year.

The Patient Protection and Affordable Care Act (PPACA) risk corridors program is supposed to shift cash from exchange plan issuers that do well in 2014, 2015 and 2016 to issuers that do poorly.

See also: 5 ways PPACA cushion programs could drive dealmaking

CCIIO asked the affected health insurers to feed data into the program by July 31, using a data filing system the agency set up for the PPACA minimum medical loss ratio (MLR) compliance program.

Virtually all of the affected insurers turned their risks corridors program data in on time, CCIIO officials say in a memo posted on the Web.

But, “while conducting quality assurance of the risk corridors data, we have identified a significant number of discrepancies in the data, which makes it necessary to conduct additional data validation,” CCIIO officials say in the memo.

CCIIO will validate the information in the risk corridors program reports by comparing it to the information available through sources, and the agency may ask some issuers to resubmit their data, officials say.

Originally, CCIIO was going to tell health insurers how much they might get from the risk corridors program, and how much they might have to pay into the program, by Aug. 14 — Friday.

See also: Feds firm up health rate filing calendar

While reviewing the risk corridors program filings, “we are postponing the publication of the preliminary risk corridors program results,” officials say.

CCIIO will “provide further information when the risk corridors data is accurate, complete and validated,” officials say.

CCIIO is part of the Centers for Medicare & Medicaid Services (CMS). CMS is part of the U.S. Department of Health and Human Services (HHS). CMS created CCIIO to run the new HHS commercial health insurance market programs created by PPACA.

Drafters of PPACA said they put the risk corridors program and two of the other “three R’s” risk-management programs in PPACA to buffer health insurers against the effects of the dramatic changes PPACA made in underwriting rules and benefits design rules.

Some PPACA watchers have asked whether enough health insurers did well in 2014 to provide the cash needed to support the insurers that did poorly.

See also: Actuaries slam risk corridor proposal

Officials at the U.S. Government Accountability Office (GAO) reported in May that health insurers were seeing signs that the three R’s programs might be poorly administered.

See also: PPACA three R’s programs: Insurers cry out

Kevin Counihan, the CCIIO director, wrote in July in a memo to state health insurance rate reviewers that, “CMS remains committed to the risk corridors program.”

“We anticipate that risk corridors collections will be sufficient to pay for all risk corridors payments,” Counihan said. “HHS recognizes that the Affordable Care Act requires the [HHS] secretary to make full payments to issuers.”

CCIIO told health insurers in June that it hoped to start collecting cash transfers from the health insurers that did well in 2014 by October, and to begin making cash transfers to the insurers that did poorly in December. 

See also: Feds: “We’ll send some PPACA lifeboat money in December”

In the new memo, CCIIO does not say how the risk corridors data validation process might affect the risk corridors cash collection and cash payment schedule.

“CMS remains committed to the risk corridors program, and we thank issuers for their continued cooperation in implementing this program effectively,” CCIIO says in the new memo.


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