CMS: We Will Make $10.4B in 2017 Risk-Adjustment Payments


CMS has issued a final rule that explains the risk-adjustment program methodology, which allows the agency to issue $10.4 billion in risk-adjustment payments for plan year 2017.

July 25, 2018 - CMS has issued a final rule that will allow the agency to disburse $10 billion in 2017 risk adjustment payments that had been in doubt due to a court ruling.  

To comply with the initial outcome of a New Mexico lawsuit contending the methodology used to calculate payments, the new final rule expands upon the reasoning behind the algorithm. CMS calculates payments using a statewide average premium to provide budget neutral payments and transfers funding accordingly to payers participating in the risk adjustment program.

“HHS chose to use statewide average premium and normalize the risk adjustment transfer formula to reflect state average factors so that each plan’s enrollment characteristics are compared to the state average and the total calculated payment amounts equal total calculated charges in each state market risk pool,” explains the final rule.