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US owes Molina subsidiaries $52M for ACA risk corridor payments

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US owes Molina subsidiaries $52M for ACA risk corridor payments

A federal judge ruled that Molina Healthcare Inc. units are owed about $52.4 million in risk corridor payments under the Affordable Care Act the government refused to fully pay.

When the law was implemented, insurers were able to share risks with the government when offering new plans in state or the federal exchange as a way to encourage companies to participate. The government promised, under the law, to reimburse insurers if they participated.

But Congress barred those payments to insurers, arguing that payments to insurers should not exceed payments made into the program, and litigation ensued.

Federal claims court judge Thomas Wheeler ruled that Molina Healthcare of Wisconsin Inc. is owed $21.3 million, Molina Healthcare of Florida Inc. is owed $25.4 million, Molina Healthcare of Utah Inc. is owed $3.6 million, Molina Healthcare of Washington Inc. is owed $238,552 and Molina Healthcare of California is owed $1.8 million.

Wheeler ruled that the government is liable for its "breach of a statutory and contractual obligation" to make full annual payments to insurers who participated in the risk corridor program.

Moda Health Plan Inc. successfully sued the government for $210 million in risk corridor payments, though other insurers, such as Maine Community Health Options, have been denied.