PopHealthCare Adds 300,000 Members to their Commercial Small Group and Individual Risk Adjustment Portfolios

By Insurance CIO Outlook | Thursday, May 05, 2016

NASHVILLE, TENN.: PopHealthCare, announced that they have added 300,000 members in their commercial small group and individual (SG&I) risk adjustment portfolio. The SG&I population is offered coverage through health plans and the health insurance marketplace and is subject to risk adjustment as part of the Patient Protection and Affordable Care Act (PPACA).

CMS released a report titled "Transitional Reinsurance Payments and Permanent Risk Adjustment Transfers for the 2014 Benefit Year", covering the PPACA established transitional reinsurance program and permanent risk adjustment program. This program by PPACA was established to share the financial risk and help stabilize premiums between health insurance issuers that cover higher-cost and higher-risk population.

According to this report, both the risk adjustment methodology and the transitional reinsurance program are working as planned. The Transitional Reinsurance Program is providing protection to issuers with exceptionally high costs, and the Permanent Risk Adjustment Program is compensating issuers that enrolled higher risk individuals and is protecting against adverse selection within a market within a state.

“Historically these services have focused predominantly in the Medicare Advantage markets, but with the statutory changes under the PPACA, the complexities of risk adjusted payment methodologies has been introduced to the SG&I markets as well,” said Robert Carroll, Chief Operations Officer,PopHealthCare.

Some of the major health plans issuing marketplace plans have seen unplanned results despite the programs functioning as intended. One of the main problems indicates that there is a significant disparity in reimbursement under CMS’ reinsurance program as compared to their estimates. “A discrepancy in reimbursement is problematic not only for investors but for the members and better health outcomes,” said Carroll. “We’re very excited to be a vendor of choice for plans offering this coverage and to work with health plans on and off the exchange to create flexible, customized risk adjustment and high-risk population care delivery solutions that provide accurate revenue, improved quality scores and reduced medical costs.”

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