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

Issue Date: September 28, 2018

Program Area: Risk Adjustment (RA)

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

Answer: Although CMS will use all appropriate debt collection processes available to the federal government to enforce the collection of risk adjustment 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 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. Risk adjustment charges for other issuers in the state market risk pool would not be affected. If CMS is unable to collect full risk adjustment charges in a state 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 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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