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HealthNow New York claims $38 million owed by federal government

Buffalo-based HealthNow New York is suing the federal government for about $38 million it claims it is owed under a program that was part of the Affordable Care Act.

HealthNow New York, which operates locally as BlueCross BlueShield of Western New York, filed a lawsuit Aug. 11 in the U.S. Court of Federal Claims.

The lawsuit centers on payments related to a program known as "risk corridors," which were a temporary measure of the Affordable Care Act intended to stabilize health insurance exchanges for the benefit years 2014 to 2016. Risk corridors were meant to help health plans cover their financial losses as the health care overhaul took root.

Health plans that experienced lower-than-expected allowable costs within a benefit year were required to pay a portion of the difference to the government. But the federal government was also supposed to pay a portion of the difference to health plans that experienced higher-than-expected allowable costs.

HealthNow New York owed the federal government more than $5 million for 2014 because of lower-than-expected allowable costs, and paid the U.S. Department of Health and Human Services, said Julie Snyder, vice president of corporate relations. But HealthNow contends the government owes it $38 million for 2015 and 2016.

"HealthNow brought tens of thousands of people into coverage, many for the first time, giving people newfound access to care," Snyder said in a statement. "HealthNow followed the law and helped expand the markets in terms of individual coverage through the exchanges. It is important for the government to follow through on its payment obligations."

Stephen McBrady, an attorney with the firm Crowell & Moring in Washington, D.C., is representing HealthNow New York in the case. Marc S. Sacks, a U.S. Justice Department attorney representing the government in the case, did not respond to a request for comment.

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