Risk Corridor Payment Litigation

Highmark Inc. and some of its health insurance affiliates (“Highmark”) recently filed a lawsuit in the U.S. Court of Federal Claims seeking to recover damages for the federal government’s failure to make risk corridor payments to insurers with high claims costs due to the insurer’s participation in the health care exchanges created by the Patient Protection and Affordable Care Act (“ACA”). More specifically, the lawsuit arises out of the United States’ failure to pay in full the amounts owed to the Highmark insurers under the ACA’s risk corridor program for the calendar year 2014. Highmark is seeking the amount it says it is owed for 2014 under the risk-corridor program, which is approximately $223 million, minus the amount it has been paid so far, which is currently around $27 million. Highmark also is seeking interest and legal expenses.  Further, Highmark is seeking declaratory relief that the government’s 2015 and 2016 risk corridor payments must be made on time and in full. As part of the ACA, the federal government created the risk corridors program to mitigate the pricing risk to insurers. This risk was due to a lack of information … Continue reading

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