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November 21, 2018 at 11:14 AM
A unit of UnitedHealth Group Inc. has received temporary relief from a New York state health insurer cash redistribution effort.
The 2nd Circuit U.S. Court of Appeals has granted a motion for a preliminary injunction from UnitedHealthcare, a unit of UnitedHealth Group Inc.
The ruling pauses a state regulation, promulgated by the New York State Department of Financial Services, that lets the department use cash from health insurers to help other health insurers that were hurt by the Affordable Care Act (ACA) risk-adjustment program.
UnitedHealthcare has sued the New York department in an effort to fight the department’s risk-adjustment adjustment program. U.S. District Judge John Koeltl of the Southern District of New York dismissed the company’s lawsuit in August.
(Related: Federal Court Dismisses UnitedHealth Suit Over N.Y. Risk-Adjustment Process)
The new 2nd Circuit ruling will shield UnitedHealthcare from the risk-adjustment adjustment program while the company appeals the decision.
A three-judge panel at the 2nd Circuit issued the ruling in connection with UnitedHealthcare of New York Inc. and Oxford Health Insurance Inc. v. Maria T. Vullo, in her official capacity as superintendent of Financial Services of the State of New York (Case Number 18-2583).
The panel also put UnitedHealthcare’s appeal on the fast track, asking that the Minnetonka, Minnesota-based health insurer submit briefs sometime over the next two to three weeks. The state will then have 10 days to file its reply briefs with the 2nd Circuit, with an appeal scheduled immediately after.
UnitedHealthcare said in a statement on the decision that it is looking forward to having its appeal of the district court’s decision heard in the coming months.
“We are pleased with the court’s ruling and look forward to pursuing the merits of our challenge to New York’s unlawful regulation,” UnitedHealthcare said in the statement.
The lawsuit was over a regulation promulgated by New York department more than two years ago that allows the agency to collect funding from insurers that receive money from the ACA risk-adjustment program.
The program is supposed to encourage insurers to treat consumers with health problems as well as they treat healthier consumers. The program requires insurers with a larger share of healthier enrollees to pay into a common fund. Fund managers then distribute the cash to insurers that end up with less healthy enrollees.
A regulation promulgated by New York department in 2016 lets the department determine whether the ACA risk-adjustment program will have an adverse effect on small-group insurers in New York state. If the department makes that determination, the regulation requires insurers that received money from the ACA risk-adjustment program to pay into a fund managed by the New York department. The department then distributes that money to insurers that are expected to be hurt by the federal program.
