CMS: Insurers to lose $1.1B in risk adjustment payments from Bright Health, Friday exits

Bright Health and Friday Health Plans are unable to meet their risk-adjustment payment obligations, leaving other insurers $1.1 billion short, CMS disclosed Oct. 27. 

Bright Health exited the ACA exchange market at the end of 2022, and Friday Health Plans went out of business in June 2023. 

In the ACA market, insurers must pay in risk-adjustment payments to CMS, designed to even out financial risk between payers with higher- and lower-risk enrollees in each market.  

In September, Bright Health said it had entered a repayment agreement with CMS to pay the remaining $380 million it owed in risk-adjustment payments for 2022 over 18 months. The company owes $199 million in Florida, where it must pay $1,000 a month before paying off the loan in a balloon payment before the 18-month period ends, according to CMS. 

Bright Health owes $89.6 million in risk-adjustment payments in Texas, $10.4 million in Illinois, and $80.9 million for its Colorado business, which also includes Alabama, Nebraska, Oklahoma, Utah and Virginia. 

Friday Health Plans, which was liquidated in all the states it operated in over the course of 2023, owes nearly $780 million in risk adjustment payments for 2022 to Colorado, Georgia, Nevada, New Mexico, North Carolina, Oklahoma and Texas. According to CMS, Friday has paid around 5% of the $780 million. 

In its filings, CMS said it will pursue "all available federal debt collection methods" to recover Friday's risk-adjustment payments. 

Ari Gottlieb, a consultant at his firm A2 Strategy Corp., previously told Becker's the payments could have some effect on other payers expecting to receive larger risk-adjustment payments, especially in states where both Bright and Friday have not paid their share of risk adjustment. 

"This is not the federal government's money. This is money that ultimately, other health plans were expecting," Mr. Gottlieb said. 

Copyright © 2024 Becker's Healthcare. All Rights Reserved. Privacy Policy. Cookie Policy. Linking and Reprinting Policy.


Top 40 articles from the past 6 months