Physician Groups Urge CMS to Rethink Risk Payment Suspension

Halting Payments to Insurers Jeopardizes Patients' Coverage

July 12, 2018 05:15 pm News Staff

A suspension of $10.4 billion in risk-adjustment payments to insurers that CMS announced this month will put patients at risk of losing health care coverage, the AAFP and five other physician organizations warned recently.  

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The risk-adjustment funds are collected from insurers and disbursed under the Patient Protection and Affordable Care Act (ACA) through a program(www.cms.gov) meant to "lessen or eliminate the influence of risk selection on the premiums that plans charge." Without these payments, insurers say their industry will be disrupted.

Physicians and their patients could face turmoil as a result of this disruption, warns a July 11 statement(2 page PDF) issued by the AAFP, the American Academy of Pediatrics, the American College of Obstetricians and Gynecologists, the American College of Physicians, the American Osteopathic Association, and the American Psychiatric Association.

"The suspension of risk-adjustment payments could lead to significant premium increases across the country -- resulting in families, especially those with chronic health conditions and pre-existing conditions, losing their health care coverage due to insurer departures from the market or the inability to afford coverage," the organizations said.

"These payments are funded by contributions from insurance plans and not from taxpayer dollars," the groups pointed out in their statement. "The funds help protect patients by allowing insurers to compete without cherry-picking healthy consumers over those with chronic illnesses and pre-existing conditions."

The organizations called on CMS "to reverse its decision to halt the risk-adjustment payments and to instead pursue innovative policy solutions that improve affordability for all individuals."

In the agency's July 7 announcement,(www.cms.gov) CMS Administrator Seema Verma, M.P.H., blamed the decision on conflicting federal court rulings.

In January, the U.S. District Court for the District of Massachusetts ruled in favor of HHS(www.gpo.gov) (which oversees CMS) in a lawsuit disputing the risk-adjustment formula. The following month, the U.S. District Court for the District of New Mexico said the formula was "arbitrary and capricious"(s3.amazonaws.com) and ruled, in part, against the agency.

CMS said it has asked the New Mexico court to reconsider its ruling "and hopes for a prompt resolution that allows CMS to prevent more adverse impacts on Americans who receive their insurance in the individual and small group markets."

Time, however, is running out.

America's Health Insurance Plans (AHIP) responded in a statement to CMS(www.ahip.org) last week. "This decision comes at a critical time when insurance providers are developing premiums for 2019 and states are reviewing rates," AHIP warned. "This decision will have serious consequences for millions of consumers who get their coverage through small businesses or buy coverage on their own. It will create more market uncertainty and increase premiums for many health plans -- putting a heavier burden on small businesses and consumers and reducing coverage options. And costs for taxpayers will rise as the federal government spends more on premium subsidies."

Meanwhile, a CMS annual report on the risk-adjustment program that was due last month still has not been released.

"As physicians who provide the majority of Americans' most essential medical care, we can attest to the importance of ensuring that the people who need care the most are able to secure affordable health care coverage," the physician organizations said in the joint statement. "We remain committed to working with the administration and Congress to improve our nation's health care system.

"Stabilizing our health care system and lowering the overall cost of health care is part of our mission, and should remain the focus of the administration in addressing health care."

Related AAFP News Coverage
AAFP, Other Groups File Amicus Brief in Texas v. U.S.
Filing Outlines Likely Harms if ACA Ruled Unconstitutional

(6/21/2018)

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