CMS Restores Risk Adjustment Program

After a brief suspension of the Centers for Medicare and Medicaid Service’s (CMS) risk-adjustment program, the agency adopted an interim final rule to restore $10.4 billion in funding to insurers to help them provide coverage to sick and costly enrollees. The final rule makes no changes to the program other than restoring it. CMS cited its reason for stopping payments was a court ruling from a federal judge in New Mexico who found the administration had not fully justified its formula for dispensing the funds. “This rule will restore operation of the risk-adjustment program and mitigate some of the uncertainty caused by the New Mexico litigation,” said CMS Administrator Seema Verma.

The risk-adjustment program is not funded by taxpayer dollars; rather, it is collected from insurers that have healthier enrollees overall and then given to insurers with sicker, more expensive enrollees to help cover their costs.