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After staggering Q2 loss, Molina healthcare scores court victory over $52 million in risk corridor payments

Molina is the second insurer to enjoy such a victory; Court in February ruled the government owed Moda Health $214 million.

Beth Jones Sanborn, Managing Editor

After a stunning Q2 loss of $230 million, Molina Healthcare scored a victory when a federal claims court judge ruled the government does owe the system $52 million in risk corridor payments.

In a partial summary judgment issued Friday, the court granted California-based Molina motion for the judgment, saying that " Congress did not clearly or adequately express an intent to make the program "budget neutral" in the appropriations riders, given the previous unequivocal mandatory obligation undertaken…"

Molina of Florida lost money during the ACA's first year of implementation, but only got a fraction of its 2014 risk corridor payments. In year two, Molina operations in California, Florida, Utah, Washington, and Wisconsin suffered "significant losses," but received no payments whatsoever from the Government, court documents said.

[Also: Molina Healthcare posts $230M loss for Q2, touts restructuring plan that includes ACA exits, layoffs]

Molina is the second insurer to enjoy such victory. Back in February, a court ruled that the government owed Moda Health $214 million in risk corridor payments based on similar reasoning.

However not every payer has fared as well. Maine Community Health Options lost their case in late July, when a judge ruled that the appropriations laws "expressly limited" payments out to payments in, making the risk corridor program budget neutral.

[Also: Molina Healthcare board fires CEO, CFO after poor financial performance]

The favorable ruling comes shortly after Molina announced huge losses for the second quarter of fiscal year 2017 totaling $230 million, announced their exit from two ACA state exchange markets, and a restructuring plan that includes more than a thousand job cuts. The system fired their CEO and CFO in this past spring, citing poor financial performance.

Twitter: @BethJSanborn

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