Dive Brief:
- The Obama administration has refuted a recent finding by the Government Accountability Office that determined HHS has exceeded its authority in prioritizing reinsurance payments to insurers over payments to the U.S. Treasury.
- The GAO report, which was prepared in response to inquiries from Republican lawmakers in both the House and Senate, bolstered the Republicans' argument against HHS, as well as a lawsuit already pending from House Republicans.
- A statement from HHS argued it had implemented the reinsurance program in a lawful and transparent way and stated that it "strongly disagrees" with the GAO's opinion.
Dive Insight:
HHS made the case that under its interpretation of the ACA's reinsurance program, it had the latitude to decide how to distribute funds in the event of a shortfall. It also argued for the value of the program, in that the funding for insurers helps contain premiums for consumers.
No matter what the fallout could be, however, that consideration does not change the intent and language of the law, the GAO report said.
Where the agencies and lawmakers will go from here remains in question. Certainly, the GAO support for the GOP position adds more fuel to the fire over provisions of the ACA. Republicans are calling for compliance with the report's findings, though the GAO does not have the authority to enforce them.
Another possibility is a new lawsuit, though any further legal action is likely to depend on the position of the next administration, health care consultant Chris Condeluci of CC Law & Policy told Inside Health Policy.
The battle has been brewing since early this year, when Republicans first accused CMS of propping up the ACA by diverting $3.5 billion from taxpayers to insurance companies. CMS was caught between requirements to use its contributions from insurers to both pay those insurers that enrolled high-risk individuals, as well as provide a portion of the payments to the U.S. Treasury. CMS acting Administrator Andy Slavitt argued at the time that under a new CMS regulation from 2014 that addressed the possibility of a shortfall, the agency said it would allocate the contributions first to the reinsurance payment pool.
The GAO report now argues the funding shortfall "does not alter the meaning of the statute" and that in other cases, courts have required agencies to “effectuate the original statutory scheme as much as possible" and to distribute available funds to approximate “the allocation plan Congress designed in anticipation of full funding."