Republican members of the House Energy and Commerce Committee have deepened their probe into the Obama administration's plans for a controversial Affordable Care Act insurance provision by asking insurers to unveil any settlement talks.
The committee sent letters to six insurers and two insurance associations requesting any communications between them and the administration about the risk-corridor program and any related lawsuits or settlement discussions. Republicans fear that President Barack Obama will use a settlement fund to curb the program's financial issues.
The risk-corridor program was created by the ACA as a safety-net for insurers on the health exchanges for the first three years. Health plans with greater than expected medical claims would be able to recoup some losses from plans with healthier members and those plans would be required to pay penalties into the system. At the time of implementation, the CMS said it planned to make the program budget-neutral.
But lawmakers claim the CMS only collected 12.6% of the requested risk-corridor payments from insurers in 2014—the first year of the program—leaving a $2.5 billion gap between incoming funds and promised payments to flagging insurers.
Since then, a number of insurers, including Blue Cross and Blue Shield of North Carolina and Moda Health Plans, have sued the CMS for hundreds of millions of dollars in allegedly overdue risk-corridor payments from 2014 and 2015.
In separate lawsuits, Highmark seeks $223 million in overdue payments; Moda Healthcare seeks $191 million; Blue Cross and Blue Shield of North Carolina requests $147 million; Land of Lincoln calls for nearly $73.9 million; Health Republic Insurance claims it is owed approximately $22 million; and Maine Community Health requests $1 million.
Although the U.S. Justice Department strengthened its defense against the lawsuits last week, House Republicans say there's an expiration date on some of those arguments: the risk-corridor program is slated to end its three-year run on Dec. 31, and all payments will be due in the ensuing months.
The CMS said in a Sept. 9 memo (PDF) that it will make up the $2.5 billion difference from 2014 risk-corridor payments with its 2015 and 2016 invoices, but the House Energy and Commerce Committee is worried the Obama administration is circumventing its authority since the same memo mentioned the agency would entertain settlement offers from insurers.
“The committee is concerned that, in connection with CMS' solicitation of settlement offers, the administration may be considering using the permanent appropriation for judgments to pay any settlement agreements, even though Congress has acted—twice—to expressly prohibit the expenditure of taxpayer dollars on the program.”
The lawmakers have also asked HHS Secretary Sylvia Mathews Burwell to clarify the Sept. 9 memo and the apparent solicitation for insurer settlements.
The letters were sent to Blue Cross and Blue Shield of North Carolina, First Priority Life Insurance, Health Republic Insurance Co., Land of Lincoln Health, Maine Community Health Options, Moda Health Plan, America's Health Insurance Plans and the Blue Cross and Blue Shield Association. The groups have until Oct. 17 to comply.