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

Issue Date: September 07, 2017

Program Area: ACA Financial Appeals (ACA FA)

Question: What is the holdback percentage for the 2016 Benefit Year Risk Adjustment (RA) and Reinsurance (RI) programs?

Answer: For the 2016 Benefit Year, reinsurance and risk adjustment payments made during the 2017 Fiscal Year (FY) (October 1, 2016 through September 30, 2017) will be held back at a rate of 6.9% for reinsurance and 7.1% for risk adjustment. See the HHS Notice of Benefit and Payment Parameters for 2018 Final Rule (81 FR 94508, 94069). The holdback percentage is determined based on when the payments are made. This holdback amount includes the 2016 Benefit Year appeals and 2017 FY sequestration holdback amounts. Holdback amounts in FY 2017 from the RI and RA programs will become available for payment to issuers in FY 2018, unless a reinsurance or risk adjustment appeal is pending. In other words, CMS will release: 1 - The FY 2017 risk adjustment holdback after the end of FY 2017 (September 30, 2017) or when all risk adjustment appeals for the 2016 Benefit Year are resolved in a State market risk pool, whichever is later; and 2 - The FY 2017 reinsurance holdback after the end of FY 2017 (September 30, 2017) or when all appeals for the 2016 Benefit Year are resolved, whichever is later. If any portion of reinsurance or risk adjustment payments for the 2016 Benefit Year are made during FY 2018, CMS will hold back 6.6% of reinsurance payments and 6.6% of risk adjustment payments to account for FY 2018 sequestration. These holdback amounts will become available for payment to issuers in FY 2019, 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 20, 2017 and August 3, 2017, Payments, Invoicing and Collections Process for the Risk Adjustment, Reinsurance and CSR Reconciliation Programs for the 2016 Benefit Year webinar presentation, located in the REGTAP Library at https://www.regtap.info/uploads/library/FT_RAD_slides_072017_5CR_072017.pdf.

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