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

Issue Date: June 04, 2020

Program Area: Risk Adjustment (RA)

Question: If the Centers for Medicare & Medicaid Services (CMS) is unable to collect full risk adjustment or high-cost risk pool (HCRP) charges from a particular issuer in a benefit year, how would charges and payments for other issuers be affected?

Answer: Although CMS will use all appropriate debt collection processes available to the federal government to enforce the collection of risk adjustment or high-cost risk pool charges for a benefit year, in rare circumstances it is possible that an issuer may be unable to make full payment for its risk adjustment or high-cost risk pool charge(s). To the extent CMS is not able to fully collect risk adjustment charges in a state market risk pool, risk adjustment payments for that state market risk pool will be adjusted on a pro rata basis to reflect the under collection. The same would apply to payments and charges for the high-cost risk pool, except high-cost risk pool payments will be adjusted on a pro rata basis within each national market risk pool, rather than within the applicable state market risk pool. Risk adjustment charges for other issuers in the state market risk pool, and HCRP charges for other issuers in each national market risk pool, would not be affected. Upon collection of additional charge amounts, CMS will make further payments to eligible issuers in the applicable state market risk pool or national market risk pool. If CMS is unable to collect full risk adjustment charges in a state market risk pool, or full HCRP charges in a national market risk pool, the issuer receiving a lesser payment can reflect this reduction in its Medical Loss Ratio (MLR) reporting(s). CMS will notify issuers when we have fully collected all the risk adjustment and HCRP charges for a benefit year for each risk pool/market, or when CMS has exhausted all means to collect outstanding debts.

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