CMS to Withhold Risk-Adjustment Payments to Insurers
On Saturday, July 7, CMS announced that it will not be making the “risk adjustment” payments to insurers as prescribed by the ACA. This decision was based on a February 28, 2018, court ruling that bars the current formula for collecting and issuing these payments to insurance companies. The risk-adjustment payments are intended to prevent adverse selection by consumers, and risk selection (“cherry-picking”) by insurance companies by redistributing funds from plans with lower-risk enrollees to plans with higher-risk enrollees. See Explaining Health Care Reform: Risk Adjustment, Reinsurance, and Risk Corridors (Kaiser Family Foundation, 8/17/16). The major insurance trade association (America’s Health Insurance Plans) released a statement expressing concern that withholding the risk adjustment payments will lead to higher insurance premiums due to insurers’ uncertainty at the time they must set 2019 rates. See Trump Administration Freezes Payments to Affordable Care Act Insurers with Sicker Patients (Fortune, 7/8/18).
New Application/Renewal Process for the Certified Application Counselor (CAC) Program
The Centers for Medicaid and Medicare Services (CMS) is implementing a new application and renewal process for Certified Application Counselor Designated Organizations (CDOs). Any organization seeking to become a Certified Application Counselor (CAC) for Plan Year 2019 must apply to become a CDO. Existing CDOs that fail to reapply during the CAC Program re-application window will be de-designated and will not be permitted to certify CACs or assist consumers. In preparation for the next Open Enrollment Period, the deadline to submit an application to become a CDO is September 14, 2018. The CDO Application can be accessed here.