Health Reform WK-EDGE Another risk corridor claim moves forward
Friday, March 31, 2017

Another risk corridor claim moves forward

A health insurer is entitled to move forward with its claim for risk corridor payments from the government. That other risk corridor cases exist or the status thereof that may sometime in the future resolve these risk corridor claims should not impede the insurer’s ability to pursue relief. The government’s response is due on or before April 28, 2017 (Molina Healthcare of California, Inc. v. U.S., March 24, 2017, Wheeler, T.).

Other risk corridor cases. On March 14, 2017, Molina Healthcare of California, Inc., filed a motion for partial summary judgment seeking payment of risk corridor payments. (The risk corridor program, established under Section 1342 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), provides insurers of qualified health plans (QHPs) with protection against uncertainty in claims costs during the starting years of a marketplace by sharing losses with the government.) There are 23 cases before the Federal Claims Court seeking payments under the risk corridors program, one having been ruled on (Moda Health Plan, Inc. v. U.S., see Court is firm: insurer entitled to $214M risk corridor payment, February 15, 2017) and one was ruled on and is on appeal (Land of Lincoln Mutual Health Ins. Co. v. U.S.). All 23 of the cases have nearly identical facts and concern the same issues of law. Molina’s motion relies heavily on the court’s decision in Moda Health, which stated that the government’s promise to pay was clear and that the insurer was entitled to payment.

Hearing. The court, on its own accord, scheduled a conference for March 23, 2017, between the parties to expedite the case and prevent the Molina manner from becoming "essentially a motion for reconsideration of the Moda Health decision."

The government argued at the conference for the court to issue a stay of the proceedings pending the Land of Lincoln appeal determination and the potential appeal of Moda Health, or at least to extend the time in which it had to respond to the motion by Molina. The government based its argument on the fact that appellate review or potentially Supreme Court review would resolve all the risk corridor cases. Molina opposed the stay and sought a limitation that any briefing in this case be limited to issues not already addressed in Moda Health.

Court’s order. The court declined to issue a stay of the proceedings because, it stated, all plaintiffs are entitled to move forward with a claim properly filed and "the existence and status of other risk corridor cases should not impede Molina’s ability to pursue relief." No limitations were placed on the contents of the briefs, but the government was restricted to a fourteen-day extension to file a response "due to the government’s familiarity with the issues presented and the ample size of the legal staff devoted to these cases."

For additional information on the risk corridor payment backlog, please refer to a Strategic Perspective on this topic from February 15, 2017: When will insurers receive risk corridor payments?.

The case number is No. 17-97C.

Attorneys: Lawrence S. Sher (Reed Smith LLP) for Molina Healthcare Of California, Inc. Charles Edward Canter, U.S. Department of Justice, for the United States.

Companies: Molina Healthcare of California, Inc.; Moda Health Plan, Inc.; Land of Lincoln Mutual Health Ins. Co.

Cases: CaseDecisions HealthInsuranceExchangeNews InsurerNews NewsFeed

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