Issued by: Centers for Medicare & Medicaid Services (CMS)

Issue Date: August 08, 2016

Program Area: ACA Financial Appeals (ACA FA)

Question: What is the holdback percentage for the 2015 Benefit Year (BY) Risk Adjustment and Reinsurance programs?

Answer: The holdback percentage and sequestration rate are determined based on when the payments are made. For the 2015 Benefit Year, reinsurance and risk adjustment payments made during the 2016 Fiscal Year (FY) (October 1, 2015 through September 30, 2016), the Centers for Medicare & Medicaid Services (CMS) will holdback 6.8% for reinsurance and 7.0% for risk adjustment. See the HHS Notice of Benefit and Payment Parameters for 2017 Final Rule (81 FR 12204, 12216). This holdback amount includes the 2015 Benefit Year appeals and 2016 FY sequestration holdback amounts. Holdback amounts in FY 2016 from the Reinsurance and Risk Adjustment programs will become available for payment to issuers in FY 2017 (October 1, 2016 through September 30, 2017), unless a reinsurance or risk adjustment appeal is pending. In other words, CMS will release: 1) The FY 2016 risk adjustment holdback after the end of FY 2016 (September 30, 2016) or when all risk adjustment appeals for the 2015 Benefit Year are resolved in a State, whichever is later; and 2) The FY 2016 reinsurance holdback after the end of FY 2016 (September 30, 2016) or when all appeals for the 2015 Benefit Year are resolved, whichever is later. If any portion of reinsurance or risk adjustment payments for the 2015 Benefit Year are made during FY 2017, CMS will holdback 6.9% of reinsurance payments and 7.1% of risk adjustment payments to account for FY 2017 sequestration. These holdback amounts will become available for payment to issuers in FY 2018 (October 1, 2017 through September 30, 2018), unless a reinsurance or risk adjustment appeal is pending. When holdback amounts are released, they are not subject to further holdback for appeals or sequestration. For more information on holdback and sequestration, please see the July 27, 2016, Payments, Invoicing and Collections Process for the Risk Adjustment, Reinsurance and Reconciliation of the Cost-Sharing Reduction Portion of Advance Payments Programs webinar presentation, located in the REGTAP Library at https://www.regtap.info/.

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