Lawmakers say O-Care risk corridor payments 'unlawful'

Republican lawmakers are questioning new Health and Human Services (HHS) Secretary Sylvia Burwell’s authority to help cover the costs of some risky consumers with health insurers.

Rep. Fred Upton (R-Mich) and Sen. Jeff Sessions (R-Ala.) wrote to Burwell on her second day in office, stating that while she has the authority to operate the risk corridor program under the Affordable Care Act, there is no provision stating where she can pull the funding from.

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The Temporary Risk Corridors Program was set up to distribute funds from insurers with healthier, less expensive consumers to those with sicker, more costly consumers in a bid to spread the cost of risk in the early stages of the new healthcare law.

Under ObamaCare, it applies to individual and small group qualified health plans until 2016.

The administration’s fiscal year 2015 budget states funding for the program would come from the Centers for Medicare and Medicaid Services (CMS), but Upton and Sessions say that is illegal, citing opinions from the Congressional Research Service (CRS) and the Government Accountability Office (GAO).

“Under current law, payments made under the risk corridor program would constitute an unlawful transfer of potentially billions of taxpayer dollars to insurers offering qualified health plans under the President’s health care law,” they said.

Instead, they said, Congress would have to authorize any transfer of funds from CMS’ budget before insurers could be paid.

“Without an explicit appropriation, any money spent on the risk corridor program would be based on an illegal transfer of funds and your agency could be held in violation of the Antideficiency Act,” they added.

Upton, chairman of the House Energy and Commerce Committee, and Sessions, ranking member of the Senate Budget Committee, asked Burwell if she agrees with GAO and CRS’ legal perspective and to provide all of HHS’ own legal analysis on the issue.

They also asked Burwell to provide a list of all other funding sources HHS thinks it has legal authority to use to pay for the risk corridor program.

The lawmakers want a response from Burwell by June 24.

House lawmakers also proposed a bill recently that would limit the amount of money the government could use to pay for the risk corridor.

Reps. Bill Cassidy (R-La.) and Leonard Lance’s (R-N.J.) bill would only allow the government to use the funds it collects from insurers to pay for the program.