CMS' New Position On Quota Share Reinsurance Is Refreshing

Chicago’s Jon Biasetti, Co-Chair of Locke Lord’s Regulatory and Transactional Insurance Practice Group, and Ben Sykes, a Partner at the Firm, previously reported that the Centers for Medicare & Medicaid Services (CMS), in connection with its 2018 Advance Notice, advised that quota share reinsurance arrangements are not a statutorily permitted form of reinsurance for Medicare Advantage Organizations (MAOs) with respect to Medicare Part C business (CMS advised that the limitations on reinsurance do not apply to Part D (Medicare prescription drug coverage) plans, including the Part D portion of a MA-PD plan). In a follow-up article, Biasetti and Sykes explain why the CMS is now reconsidering its position and how MAOs should react.

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