CMS' final rule on risk adjustment payments: 3 things to know

CMS issued a final rule to continue its risk adjustment program for the 2018 benefit year.

Here are three things to know:

1. The risk adjustment program was established under the ACA to encourage insurers to participate in the exchanges and accept all customers without charging more for patients in need of substantial medical services. In addition, it was put in place to protect health insurers from major losses. The program collects money from insurers with fewer high-cost members and transfers those funds to insurers with more high-cost members.

2. The Patient Protection and Affordable Care Act; Methodology for the HHS-operated Permanent Risk Adjustment Program for 2018 reissues the risk adjustment methodology HHS used for the 2018 benefit year. 

3. CMS initially froze the payments after a federal court decided earlier this year that the formula to determine risk-adjustment payments was flawed. "Although the litigation is still pending, thanks to CMS' clear commitment and ongoing steps to strengthen the markets, I am pleased to report insurer participation on increased for the 2019 benefit year, demonstrating improved confidence in the markets," CMS Administrator Seema Verma said.

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