Kaiser and BCBS of Oregon earned $15.9 million and $10.6 million, respectively, under the risk adjustment program, according to the article. Other insurers haven’t fared as well under the program. Oregon’s Health Co-op, for instance, was forced to shutter its doors after hearing news it owed nearly $1 million under the risk corridor program.
This has caused some industry experts to wonder if the risk adjustment program is working as intended, reports Portland Business Journal.
The risk adjustment program, in part, was designed to redistribute funds from health plans with healthier-than-average members to plans with sicker-than-average enrollees. Kaiser’s northwest lead actuary Bill Ely told Portland Business Journal that success under the program depends on two factors: accurate coding for patient population and proper premium levels.
For a health plan to merit a risk adjustment payment, the insurer must use the appropriate medical codes that designate a particular health condition. This can put larger and more established health plans at an advantage because they typically have a long-term or well-documented history of members’ health conditions.
Premiums also play an important role, said Mr. Ely. “When premium levels are set properly, the risk adjustment program is instrumental in making sure those carriers that attract a different level of risk than other carriers, their revenue levels are adjusted appropriately.”
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