New Mexico Health Connections sued the federal government for allegedly mismanaging the Affordable Care Act's risk adjustment program, under which the insurer owes $14.6 million, the Albuquerque Journal reported.
The Albuquerque, N.M.-based insurer filed its lawsuit the same day Boston-based Minuteman Health filed a lawsuit over the $16.7 million it owes in risk adjustment payments. The risk adjustment program was established to temporarily level the financial playing field for payers acquiring newly insured, costlier members. Under the program, states collect money from better-performing insurers and disburse it to payers that incurred higher-than-expected medical costs.
"Rather than stabilize the marketplace, they (federal regulators) have destabilized it," the complaint from New Mexico Health Connections reads. "Rather than create competition, they are crushing, the small, innovative new entrants."
Officials from CMS and HHS are named as defendants in the case. The $14.6 million payment represents 15 percent of Health Connection's premium revenue this year, according to the report. The insurer said rates will rise next year as a result.