June 3, 2016
Evergreen Health Cooperative could be forced to pay nearly $22 million to CareFirst BlueCross BlueShield as part of an Affordable Care Act provision that was initially designed to level the health insurance playing field.
The fees are part of what's known as risk adjustment costs. The provision requires insurers who take on healthier patients to pay insurers who have sicker clients.
Evergreen Health Cooperative may have to pay CareFirst almost $22 million in fees under a provision of the Affordable Care Act.
For health insurance co-ops across the country, including Maryland's Evergreen, this could mean paying tens of millions of dollars to the largest insurers in the country. Evergreen's payments for 2015 could hit $22 million, with most of it being owed to CareFirst, the largest insurer in the state. Cooperatives are expected to get their final risk adjustment estimates on June 30. Prior to that date, Beilenson said Evergreen is exploring all of its options, even in the form of litigation. Otherwise, having to pay out would be "damaging."
Evergreen is one of 24 insurance cooperatives in the U.S. under the Affordable Care Act that was intended to create more competition in the marketplace. The co-op had to pay $2 million in risk adjustment fees last year for 2014, a year in which Evergreen had approximately 2,000 members. It now has almost 40,000 members.
Peter Beilenson, the CEO of Baltimore-based Evergreen Health, said he's appealed eight different times to the Centers for Medicare and Medicaid Services to have the federal government either lower the risk adjustment payment or develop a payment plan, but he says the feds are refusing to budge.
"They're telling me they can't change the rules in the middle of the game," Beilenson said.
Specifically, Evergreen is asking CMS to place a cap on the size of the risk assessment payments. In this case, $1.6 million. Beilenson also said he'd like to see payments phased in over the next two or three years so that newer providers have time to get patient information up to date and balance the formula.
Digital Editor, Baltimore Business Journal