The U.S. Department of Justice has filed motions to dismiss two lawsuits by health care insurers who claim that they are owed millions under the Affordable Care Act.
The Hill reported that the insurers, Moda Healthcare and Blue Cross Blue Shield of North Carolina, have sued the federal government over a combined $338 million in health care payments they claim are overdue. But the Justice Department is arguing that the federal government isn’t responsible for those payments — and if it wins its argument, the decision could reverberate through the marketplace.
The lawsuits are both focused on a provision in the ACA known as the “risk corridors” program, which is aimed at cutting risks in the new marketplace. While passage of the ACA in 2010 brought the funding program into law, Republicans have since passed budget rules that restrict those payments, and the program has come up short — substantially so.
During 2014, the first year of the risk corridors program, $363 million was paid into it. However, insurers sought a whopping $2.87 billion to make up for losses during that year — far more than the program is capable of paying out, thanks to the budget restrictions.
While Moda says the program owes it $191 million from 2014 and Blue Cross Blue Shield is claiming $147 million, the Justice Department is arguing that the Department of Health and Human Services (HHS) does not owe that money to insurance companies, partially because Congress has “directly spoken” about its intent to limit the use of federal dollars into the program.
“Under Moda’s interpretation, HHS would be the uncapped insurer of the insurance industry itself,” the Justice Department said in its filing. “Congress did not intend that result.” In its two motions, the Justice Department said that Congress never gave itself authority to pay for the risk corridors program, and that the insurers may never need to be paid.
It also argued that insurers aren’t currently owed any money because the federal government didn’t set a deadline. “Under this framework, HHS does not owe Moda, or any other issuer, final payment before the end of the program,” the Justice Department wrote.
While it had made the same argument in an earlier case with Health Republic back in June, experts are saying that the current argument is presented more strongly — that while the 2010 law would have provided the government the authority to make the payments, Congress’s subsequent intervention limited that authority.
While payment data have not yet been released for 2015, the filing said that the Obama administration intends to do so in December of this year.
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