The health insurers in the new Patient Protection and Affordable Care Act (PPACA) risk-adjustment program should correct data filing errors if the corrections will hurt those insurers and help their competitors.
The insurers cannot make corrections that help themselves.
Officials at the Center for Consumer Information & Insurance Oversight (CCIIO), part of the Centers for Medicare & Medicaid Services (CMS), give that interpretation in a new memo to insurers posted on the CCIIO section of the CMS website.
CMS is part of the U.S. Department of Health and Human Services (HHS). CMS set up CCIIO to run the PPACA programs that affect the commercial health insurance market.
PPACA drafters created the risk-adjustment program to try to make enrolling sick people as profitable as enrolling healthy people, by using cash from exchange plan issuers in a market that end up low-risk enrollees to compensate the issuers in the market that end up with high-risk enrollees. The competitors in a market end up splitting what amounts to a premium-adjustment money pie.
CCIIO officials are using patient diagnosis information and other information from insurers to assign the enrollees risk scores.
Health insurance company managers have complained that the risk-adjustment program data filing system is complicated, and that, during the first PPACA open enrollment period, from late 2013 to mid-2014, CCIIO officials stopped answering insurer questions about the risk-adjustment program.
CCIIO officials say they made their risk-management program data filing requirements and deadlines clear.
“We have required issuers to adhere to the initial data submission, and to accept the consequences of the data submission, even where the monetary impact of the inaccuracy on the issuer submitting incorrect data may be substantial,” CCIIO officials say in their memo.
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CCIIO will accept and use the corrections needed to help the competitors of an insurer that filed inaccurate data, officials say.
That approach ensures “that issuers do not profit from their data submission errors or harm their competitors in the relevant market,” officials say.