The New York State Supreme Court last week approved the New York Liquidation Bureau’s (NYLB) status report on the Health Republic liquidation and authorized NYLB to continue work towards distributing the company’s remaining assets, pending Federal government clearance. According to the NYLB report, Health Republic has assets of just under $40 million and liabilities to providers and policy holders of $213 million. However, no asset distribution can occur until $463 million in Federal claims against Health Republic for loan repayment and risk adjustment amounts owed are resolved.
While New York law gives priority to provider and policyholder claims in insurer liquidations, Federal law generally requires addressing Federal claims first. According to the US Department of Justice, the Federal requirement can be waived, and NYLB has indicated plans to seek such a waiver, which would clear the way for the distribution of Health Republic’s assets sometime after December 2018. Judge Carol Edmead set a December 15 target date for NYLB to return to court with a listing of proposed payments by claimant.
NYLB also reported that it had completed adjudication of Health Republic claims and issued 186,000 Explanations of Benefits (EOBs) to providers and enrollees between August and November of 2017. Less than 1% of EOBs were appealed, largely based on coding disputes.
In addition, Department of Financial Services (DFS) Superintendent Maria Vullo, as liquidator of Health Republic, filed suit against the US in September 2017 seeking more than $575 million in payments for balances that DFS believes are owed to Health Republic under the Affordable Care Act for risk corridors, reinsurance, risk adjustment, tax credits, and cost-sharing subsidies. The case is stayed pending the outcome of similar litigation already in process.