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CMS delays insurance payout data from health reform's risk corridors


The federal government has postponed the release of data that will show how much health insurance companies will receive or be charged under an Affordable Care Act program meant to mitigate the risk of taking on previously uninsured members.

All health insurers that sold plans on the ACA's exchanges had to submit information on the risk corridors program by July 31. The U.S. Centers for Medicare and Medicaid Services planned to publish data Aug. 14, but the agency pushed back the release to an unknown date because there were inconsistencies in the data.

“While conducting quality assurance of the risk corridors data, we have identified a significant number of discrepancies in the data, which makes it necessary to conduct additional data validation,” the CMS said in a memo Aug. 7.

The goal of the temporary program, which expires after 2016, is to help insurers in the early years of setting premium rates in the ACA's individual and small-group insurance markets. If health insurers lose money on their exchange plans above a certain expected threshold, the U.S. Department of Health and Human Services will cover a specified amount of those losses. Companies that had medical costs that were better than expected have to pay some money back to the government.

Risk corridors, along with risk adjustment and reinsurance, are intended to lessen the financial risk of taking on an uninsured population with uncertain healthcare needs. The Kaiser Family Foundation and American Academy of Actuaries have detailed primers on each of the so-called three R's.

Republicans have derided the risk corridors as “massive bailouts” for health insurance companies. But economists and actuaries say the program allows the federal government and carriers to share premium risk until the new health insurance marketplace becomes more established.

The risk corridor program has been the biggest uncertainty for health insurers thus far, mostly because it is a retrospective analysis of medical claims. “CMS has never collected any of this data before,” said Cathy Murphy-Barron, vice president of health issues at the American Academy of Actuaries. “Any time you deal with data, it takes longer than you think.”

Some companies have predicted their risk corridor obligations. Aetna Inc. said it owes the government $6.2 million, according to its most recent filing with the U.S. Securities and Exchange Commission. Health Care Service Corp., the Blue Cross and Blue Shield insurer for five states, expected to receive $115 million in risk corridor payments for 2014 plans, according to an April report from Standard & Poor's Corp.

This summer, the CMS released data on reinsurance payments, finding that 437 health plans will be reimbursed $7.9 billion under that program.

Bob Herman writes for Modern Healthcare, a sister publication of Business Insurance.

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