The way CMS rolled out a technical clarification for the 2017 benefit year ran afoul of the Administrative Procedure Act, a second federal lawsuit claims.
A nonprofit health plan that sued the federal government over the way risk-adjustment payments under the Affordable Care Act are calculated is redoubling its effort to block the program's implementation for the 2017 benefit year.
New Mexico Health Connections persuaded a federal judge to declare the government's methodology illegal last February. That prompted the Centers for Medicare & Medicaid Services to freeze the program then reinstate it with a technical clarification last month.
The health plan, which has accused Health and Human Services of causing "a purely self-inflicted wound," filed a second federal lawsuit on Monday, alleging that the way the technical clarification was rolled out without a period for public comment violated the Administrative Procedure Act.
"We contend that the emergency regulation continues a risk adjustment formula that disadvantages small, new, and lower-priced health plans in favor of their larger, more expensive competitors," New Mexico Health Connections CEO Marlene C. Baca said in a statement.
"The CMS formula does not, as it is supposed to, transfer funds equitably from health plans with healthy enrollees to health plans with sick enrollees," Baca added. "We support the concept of fair and equitable risk adjustment and we will continue to fight to protect consumers and provide fair insurance rates."
The plaintiff also filed a 30-page motion for summary judgment to declare the 2017 rule illegal.
Steven Porter is an associate content manager and Strategy editor for HealthLeaders, a Simplify Compliance brand.