ALBUQUERQUE, N.M. — A federal judge has ruled in favor of New Mexico Health Connections in a case that calls into question billions of dollars in payments that have been made nationally under the Affordable Care Act.
Health Connections filed a lawsuit in 2016 arguing that the federal government’s risk adjustment program relied on a flawed formula. The program redistributes money from insurers with healthier customers to insurers with sicker customers.
The U.S. District Court of New Mexico agreed with Health Connections, and ruled that the methodology used by the federal Health and Human Services department was unsound.
It was not immediately clear what the financial implications of the ruling were for Health Connections, a not-for-profit health co-op established with Affordable Care Act loans, nor for the other organizations that have collectively submitted billions of dollars in risk adjustment payments since 2014.
In a statement, former Health Connections CEO Martin Hickey called the ruling “a victory” and said the court “took an important step towards stopping the unfair penalties” that have been assessed against the company.
This story will be updated as new information becomes available.