The Trump administration's inconsistency on risk-corridor payments is sowing confusion in the individual insurance market, two leading Senate Democrats told HHS Secretary Alex Azar in a letter on Wednesday.
Sens. Ron Wyden of Oregon and Patty Murray of Washington, the ranking Democrats of the Senate Finance and health committees, are pushing Azar to disclose the accounting practices that the administration used to justify its apparent about-face earlier this year on making risk-corridor payments owed to ACA exchange carriers.
The senators also want the reasoning for the administration's conclusion it doesn't have any "unfunded obligations" to the carriers.
In addition to any and all correspondence between HHS and the White House Office of Management and Budget and other agencies involved in the decision about risk corridors, the senators also want to know whether the administration used federal accounting standards or OMB guidance as justification.
"The Trump administration's approach to funding the risk-corridors program amounts to budgetary whiplash, leaving many unanswered questions about its ability to be good financial stewards of taxpayer funds," they wrote.
Although the Obama and Trump administrations have fought insurers in court over their obligation to make the risk-corridor payments, HHS in February asked for $11.5 billion to fund the program, including $812 million in additional mandatory funds to make sure the program would escape sequester cuts. Two weeks later, OMB Director Mick Mulvaney rescinded that request.
HHS told Modern Healthcare that Mulvaney's rescission does not reflect a change in the Trump administration's position on these lawsuits.
"Now that the program periods for collecting funds have concluded, HHS has updated its accounting of the risk-corridor program to reflect the fact that there is no obligation to make payments beyond the amounts collected from insurers under the program," an HHS spokesperson said.
Originally, the ACA promised exchange insurers the payments to buffer their adjustment to the new market. But congressional Republicans restricted what HHS could pay insurers via an appropriations rider that prevented the Obama administration from infusing new money into the individual market.
The U.S. Court of Appeals for the Federal Circuit is considering two pending cases over the risk-corridor payment shortfall having heard oral arguments on Jan. 10. After HHS' initial request to fully fund risk corridors, the carrier Moda Health filed an addendum that called out the Trump administration's seemingly inconsistent position on risk-corridor payments.
Moda Health argued that "if the appropriation riders had substantively amended the ACA, the government would have no basis now to be proposing to appropriate funds to fulfill the entirety of its (risk-corridor) obligations."
A few days later on Feb. 20, the U.S. Justice Department sent a letter to the federal appeals panel stating that HHS had revised its budget request eliminating the full funding request for risk corridors.
"The program periods for collecting funds have concluded and HHS has made accounting adjustments to reflect that termination," Klein wrote.
On Feb. 26, Mulvaney penned a similar letter to House Speaker Paul Ryan, also referencing budget changes HHS had made to justify scrubbing them from the request.
HHS "has determined that its accounting treatment of the risk-corridors program that began during the prior administration required adjustments at the conclusion of the three-year program," Mulvaney told Ryan.
