Five Republican House members on the Energy and Commerce Committee sent a letter Tuesday to HHS Secretary Sylvia Mathews Burwell demanding answers to how the federal government is handling a much-maligned insurance provision within the Affordable Care Act.
Earlier this month, the CMS sent a memo (PDF) to health insurance companies that said the agency would not be making risk-corridor payments for 2015 because any collections would be used to cover the $2.5 billion shortfall from 2014.
Risk corridors—a program that expires at the end of this year and also exists in the Medicare Part D prescription drug program—essentially limit how much money an insurer can lose or gain on the ACA's exchanges. Profitable plans make payments to the government, while plans that endured higher-than-expected medical claims receive payments. However, Congress passed laws the past two years that required the program to be budget-neutral.
The CMS memo also acknowledged that many companies, including Highmark and Blue Cross and Blue Shield of North Carolina, are suing the federal government to receive the promised payments. The agency said it was “open to discussing resolution of those claims…at any time.”
Republicans wanted to know how the CMS could solicit risk-corridor settlements even though federal funding hasn't been appropriated for the rest of the program.
“Since Congress acted twice to protect taxpayer dollars by prohibiting the use of federal funds to make up for any shortfall in risk corridors payments, the committee is concerned about the administration's intent to use any federal funds to settle the suits brought by the insurance companies,” the letter reads.
The Energy and Commerce Committee members also asked the CMS to provide more information on the risk-corridor program, such as other insurers that may sue for payments and those that have considered settling.