Jon Biasetti, Chicago Partner and Co-Chair of Locke Lord’s Regulatory and Transactional Insurance Practice Group, was quoted in a RADAR on Medicare Advantage article regarding a new proposed rule from the Centers for Medicare & Medicaid Services (CMS) allowing Medicare Advantage Organizations (MAOs) to enter into quota share reinsurance arrangements provided they satisfy certain conditions. Although the new proposed CMS rule is “a welcome development in light of the legal uncertainty MAOs have operated under during the past several years,” Biasetti explains that the rule still leaves considerable ambiguity as to what the new conditions mean for the future purchase of quota share reinsurance. Biasetti authored a comment letter to CMS regarding the proposed rule explaining that the ambiguities will present a bid filing dilemma for the MAOs that use quota share reinsurance and proposing substitute language for the new rule for CMS’s consideration. “I have spoken with many actuaries of MAOs over the last few weeks, and they’re all scratching their heads,” Biasetti said.
Biasetti said he hopes CMS alters its guidance and makes the regulation retroactive to 2020, which would allow health plans to “be reassured that they can continue to enter into quota share reinsurance, not only in the context of submitting bids but also in the ordinary course of business from today going forward.”
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