January 6, 2020
✦ HHS’s formula for calculating payments associated with the Affordable Care Act’s risk adjustment program is not “arbitrary and capricious,” a three-judge panel of the Tenth Circuit Court of Appeals ruled on Dec. 31. So states a new post from attorney Katie Keith’s “Following the ACA” blog on Health Affairs’ website, which explains the decision reverses a district court ruling in New Mexico that led the Trump administration to temporarily suspend about $10.4 billion in risk adjustment payments in 2018 (HPW 7/16/18, p. 1). The Consumer Operated and Oriented Plan (CO-OP) that challenged the risk adjustment methodology, New Mexico Health Connections, objected to HHS’s use of a statewide average premium to calculate risk adjustment payments, saying that disadvantages smaller, newer and lower-priced health plans. The CO-OP could appeal directly to the Supreme Court or ask for the case to be reheard by the entirety of the Tenth Circuit, Keith writes. But it’s possible that the ruling will be the final word on risk adjustment litigation.