Blue Cross and Blue Shield of North Carolina blasted the federal government on Monday for trying to dodge hundreds of millions of dollars in overdue risk-corridor payments, alleging the feds' defenses are nothing more than “revisionist history.”
Although the U.S. Justice Department recently said the insurer's lawsuit and several others over the controversial three-year program are premature, since payments allegedly won't be due until next year at the earliest, the North Carolina Blues said that argument runs afoul of the Affordable Care Act and history of the risk-corridor program.
“This is not a hypothetical dispute or an abstract disagreement,” the North Carolina Blues told a federal court.
In a detailed 78-page brief, the insurer picked apart the Justice Department's recent pivot in a series of lawsuits over risk-corridor payments for 2014 and 2015. The North Carolina Blues alone is owed $147.5 million in overdue payments for the losses it incurred on the Affordable Care Act exchange. So far, the feds have only paid the insurer $18 million before changing its tune.
According to the North Carolina Blues, the risk-corridor program was a big factor in the insurer joining the insurance exchange in the state, as it hedged the financial impact of insuring new customers without necessary medical or actuarial data to help set premium rates. The federal government repeatedly touted the program over the years as a means to protect qualified health plans.
But recently, the Justice Department has said the risk-corridor plan was meant to be budget-neutral, a claim the North Carolina Blues vehemently disputes. The insurer pointed out that the final rulemaking establishing the risk-corridor program clearly stated the program was not going to be budget-neutral, and the government's recent arguments “at best, engage in revisionist history based on post hoc characterizations.”
The insurer has asked the U.S. Court of Federal Claims to allow its lawsuit to move forward and reject the Justice Department's motion to dismiss the case.
So far, health insurers have only been able to pay out 12.6% of insurers' requests for risk-corridor payments, as the program has taken in far less in contributions than its projected payouts. Several co-ops have dropped out of the insurance market entirely and blame their failure on massive risk-corridor liabilities. GOP lawmakers have also criticized and challenged the program in Congress.
The Justice Department's tougher stance on the risk-corridor lawsuits started in early October, shortly after the CMS told health insurers it would not make its 2015 risk-corridor payments because the collections would be used to pay the $2.5 billion gap in program funding from 2014.