Blue Cross and Blue Shield of North Carolina is suing the federal government, claiming the U.S. failed to pay the insurer $147 million in payments owed under the Affordable Care Act's risk corridor program.
The risk corridor program is designed to temporarily level the financial playing field for payers by limiting both unexpectedly high gains and losses associated with participating in a new insurance market. Insurers that saw greater profits paid into a pool to compensate insurers with higher losses. The three-year program, which runs through 2016, fell short by more than $2.5 billion in its first year because so many insurers experienced losses in the individual market.
Due to the shortfall, HHS said insurers initially would only receive 12.6 percent of the money claimed under the risk corridor program for 2014. In its suit, BCBS of North Carolina is seeking the full amount it is owed for that year.
BCBS of North Carolina filed suit Thursday in the U.S. Court of Federal Claims in the District of Columbia. There are two other suits concerning risk corridor payments pending in that court. In February, Health Republic Insurance Co. brought a $2.5 billion claim against the federal government, and that suit is seeking class-action status. In May, Highmark, the insurance arm of Pittsburgh-based Highmark Health, sued the federal government for the nearly $223 million in payments it is owed under the risk corridor program.
More articles on healthcare industry lawsuits:
Investigation into Cooper Health CEO's death linked to criminal charge against his son
15 latest healthcare industry lawsuits, settlements
Former healthcare CFO charged with bribery, fraud