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Zoom CEO Dave Sanders

The Affordable Care Act created a program called risk adjustment to help steer funding from health insurance companies with healthier customers to companies that attract sicker people. But an FBI investigation into allegations that Oregon-based health care system Zoom fraudulently tinkered with the codes and medical claims of its insurance customers is causing concern that the program is ripe for widespread gaming.

The takeaway: Many experts believe Zoom likely is an aberration in the ACA marketplaces. But risk adjustment has a history of abuse, particularly in Medicare Advantage.

Coding games: Several former Zoom employees told Axios that the company was rigging the system so it wouldn't have to pay into the risk adjustment pool. In this case, Zoom allegedly changed the codes on medical claims so people have higher "risk scores." Instead of a person just having high blood pressure, for instance, it could have been changed to a more serious condition, like congestive heart failure.

The point of risk adjustment is to prevent insurance companies from cherry-picking the healthiest people. The ACA made this program permanent to provide some stability to insurers that wanted to participate in the new exchanges. In a good-faith system, "every carrier is focused on making sure the coding accurately captures their risk," said Dave Dillon, a fellow at the Society of Actuaries.

But as one insurance industry expert said, "The amount of money that can be moved around with risk adjustment can be fairly high."

Not just the ACA: Fred Schulte of Kaiser Health News wrote an investigative series on how insurers have overcharged the federal government through aggressive coding in the Medicare Advantage risk adjustment program.

Many people believe Zoom is an anomaly: Richard Lieberman, an industry consultant and early pioneer of designing risk adjustment, works with ACA insurers. He has not seen or heard of any gaming like the allegations surrounding Zoom. Instead, insurers are having more trouble simply submitting their data to the government, he said.

Zoom would have had an easier time adjusting claims retroactively because it was allegedly doing this for its own insurance members that were going to its own clinics. Any provider-owned insurer would be in a position to do this. But the latest data from the Centers for Medicare and Medicaid Services, which oversees the ACA's risk adjustment, show many other provider-based insurers paid big amounts into the program for 2015:

  • Kaiser Permanente's main California insurance company shelled out $169 million for the individual and small-group programs.
  • The University of Arizona's insurance division had to pay $10 million.
  • Several provider-owned plans in Texas (such as Baylor Scott & White Health and Memorial Hermann) and Wisconsin (such as Dean Health) had to cough up money.

What to watch: The next CMS report, which should be released later this month.

Go deeper

Schumer's m(aj)ority checklist

Senate Minority Leader Chuck Schumer. Photo: Tasos Katopodis/Getty Images

Capitalizing on the Georgia runoffs, achieving a 50-50 Senate and launching an impeachment trial are weighty to-dos for getting Joe Biden's administration up and running on Day One.

What to watch: A blend of ceremonies, hearings and legal timelines will come into play on Tuesday and Wednesday so Chuck Schumer can actually claim the Senate majority and propel the new president's agenda.

The dark new reality in Congress

National Guard troops keep watch at security fencing. Photo: Kent Nishimura/Los Angeles Times via Getty Images

This is how bad things are for elected officials and others working in a post-insurrection Congress:

  • Rep. Norma Torres (D-Calif.) said she had a panic attack while grocery shopping back home.
  • Rep. Jim McGovern (D-Mass.) said police may also have to be at his constituent meetings.
  • Rep. Adam Kinzinger (R-Ill.) told a podcaster he brought a gun to his office on Capitol Hill on Jan. 6 because he anticipated trouble with the proceedings that day.
Off the Rails

Episode 3: Descent into madness ... Trump: "Sometimes you need a little crazy"

Photo illustration: Sarah Grillo/Axios. Photos: Tom Williams/CQ-Roll Call, Chip Somodevilla/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. This Axios series takes you inside the collapse of a president.

Episode 3: The conspiracy goes too far. Trump's outside lawyers plot to seize voting machines and spin theories about communists, spies and computer software.

President Trump was sitting in the Oval Office one day in late November when a call came in from lawyer Sidney Powell. "Ugh, Sidney," he told the staff in the room before he picked up. "She's getting a little crazy, isn't she? She's really gotta tone it down. No one believes this stuff. It's just too much."