North Carolina’s largest health insurer must wait for payment for $130 million that Washington promised but didn’t pay under a provision of President Barack Obama’s reform law, a federal judge ruled.
Durham-based Blue Cross and Blue Shield of North Carolina’s lawsuit contended the government owes it overdue payments promised to stabilize health insurance premiums for companies that took on sicker and older customers. The company said it was being shorted $130 million for 2014 and more than $175 million in 2015 for the so-called risk corridor payments.
Blue Cross did not respond to requests for comment Thursday and questions about its current estimate of what Washington owed it for 2015 and 2016 payments.
The total debt claimed by Blue Cross represented three-quarter of the company’s loss of more than $400 million on insurance policies sold on marketplaces created by the federal Affordable Care Act during 2014 and 2015.
The U.S. Court of Federal Claims this week dismissed the insurer’s lawsuit. Judge Lydia Kay Griggsby ruled on Tuesday that the law doesn’t set a deadline for the government to make the payments. Any shortfall in Blue Cross’s risk corridor payments could still be made up, so the company isn’t due any payments now, the judge said.
“The government has no obligation to make full, annual Rick Corridors Program Payments,” Griggsby wrote in her opinion.
Congress blocked making payments in 2015 and 2016. Government attorneys contend Congress and the Centers for Medicare and Medicaid Services have until the end of this year to make insurers whole.
Several insurers sued the government over the $2.87 billion in risk corridor payments that the U.S. Health and Human Services Department said it owed insurers for the 2014 plan year.
A judge on the same court, which handles claims that the federal government owes money, in November dismissed a similar payment enforcement lawsuit by Chicago-based Land of Lincoln Mutual Health Insurance Co. The company was ordered liquidated last fall.
But Moda Health Plan Inc. of Portland, Oregon, won its case in February when a federal claims judge ordered the payment of $210 million.