Department of Health and Human Services Archives

03/15/2017

Speaker Ryan’s Odd Claim that HHS Secretary Price is Barred from Disclosing Regulatory Plans

In response to a question from a reporter during his press conference discussing the American Health Care Act, House Speaker Paul Ryan claimed that Secretary of Health and Human Services Tom Price couldn’t disclose his plans to provide regulatory relief from ObamaCare. This regulatory relief is Phase Two in the Speaker’s three-phase plan to reform federal health law. As far as we can tell, no such legal bar exists.

Here’s the exchange:

CNBC Reporter: You’ll need companies onboard to provide the optionality that you’re talking about and almost every industry organization has come out against this. The reason why there isn’t as much participation as customers might like is because these companies can’t offer these products and still make money. How do you get buy-in from the business community?

Speaker Ryan: It’s a great question. Here’s what people aren’t seeing, which is Number Two. Tom Price, for legal reasons, can’t tell you what he’s thinking about doing. There’s laws that prevent that. We can do so much deregulation through the Executive Branch by the Secretary of Health and Human Services. He actually just put one regulation out the other day, which will go a long ways toward lowering the cost of health insurance.

We sent repeated emails to the Speaker’s office asking for an explanation or identification of which laws the Speaker was referencing, but they’ve gone unanswered. Our own research has failed to uncover any laws that would prevent Secretary Price from discussing his regulatory plans.

What seems more likely is that either HHS hasn’t formulated all of its plans for regulatory relief or that, if it has, the Speaker is holding those cards close to his vest. Either way, we know of no laws that prevent HHS from announcing its regulatory intentions either to Congress or the public, and Speaker Ryan hinders open debate on the issue by stating otherwise.

Josh Blackman has detailed some of the regulatory options available to HHS. If the Speaker and Secretary Price intend to use any of these options, or have others of their own, they should disclose it to the public and not claim there are secret, unidentified laws that prevent them.

James Valvo is Counsel & Senior Policy Advisor at Cause of Action Institute. You can follow him on Twitter @JamesValvo.

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03/14/2017

CoA Institute Files Lawsuit for ObamaCare Records

Washington, D.C. – Cause of Action Institute (“CoA Institute”) filed a lawsuit in the U.S. District Court for the District of Columbia after the Department of Health and Human Services (“HHS”) failed to disclose records about the potential misuse of taxpayer information to market the Affordable Care Act (“ACA”), as well as records on the funding of two controversial ACA programs.

The lawsuit follows three Freedom of Information Act (“FOIA”) requests to HHS and its subsidiary agency, the Centers for Medicare and Medicaid Services (“CMS”), seeking records relating to obligations under the transitional reinsurance program and the risk corridors program, as well as attempts to market ObamaCare to individuals who declined coverage by using information obtained from individual federal tax returns. The agencies failed to produce any responsive records well past the applicable FOIA time limits.

Cause of Action Institute President and CEO John Vecchione: “It appears that senior Obama administration officials acted against taxpayers’ interests and disregarded the law to make ObamaCare appear more successful. Under the law, Americans’ tax information may be used to determine eligibility for subsidies, but not to market ObamaCare to individuals who have already declined to enroll. Disclosures of taxpayer information by the IRS raises serious privacy concerns. As Congress continues its efforts to repeal and replace the ACA, it’s more important than ever for HHS to be transparent and forthcoming about ObamaCare’s failures and missteps in implementation.”

Background

Taxpayer Information: To boost enrollment in ACA programs, it appears the Obama administration attempted to market the ACA to individuals who declined coverage by using information obtained from individual tax returns. A fact sheet released by CMS highlights its plan to “conduct outreach to individuals and families who paid the fee for being uninsured, or claimed an exemption from that fee, for 2015.” Under the ACA, however, tax information may only be used to determine ACA subsidy eligibility; it may not be used to market the ACA to individuals who have already declined to enroll. Taxpayer information disclosures by the IRS to an unknown number of individuals at CMS and throughout the government raises serious legal and privacy concerns.

Risk Corridors: Since its enactment, the ACA has faced considerable funding issues. The risk corridors program was supposed to collect payments from insurers with lower than expected losses and redirect the money to subsidize insurers with higher than expected losses. Because of low enrollment and monetary shortfalls, a CMS memorandum announced that funding for the risk corridors program would not be available to insurers in 2015. The memorandum, however, appears to invite insurers to sue CMS and then settle with the Department of Justice (“DOJ”) to obtain funding, which would constitute an end-run of a provision enacted by Congress in 2014 to prevent shifting funds into the risk corridors program and a violation of DOJ guidance regarding “backdoor bailouts.” Obtaining risk corridor funding through the DOJ Judgment Fund would be an illegal misuse of appropriated taxpayer money.

Reinsurance Program: Section 1341 of the ACA requires the HHS to return payments to taxpayers under the transitional reinsurance program. Under this program HHS collects reinsurance contributions from health insurance providers and third party administrators on behalf of group health plans. In 2014, HHS was supposed to collect $10 billion in payments to health insurers who enroll high-risk individuals and an additional $2 billion in contributions to be deposited directly to the U.S. Treasury. Unfortunately for taxpayers, it appears when HHS collected less money than required by the ACA, the agency violated the law by allocating all funding to health insurers, depriving taxpayers of billions of dollars.

The full complaint can be found here

For information regarding this press release, please contact Zachary Kurz, Director of Communications: zachary.kurz@causeofaction.org

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08/26/2016

CoA Institute Probes HHS’s Decision to Use Taxpayer Money to Pay Off Insurance Companies

Washington, D.C. – Cause of Action Institute (CoA Institute) today filed a Freedom of Information Act (FOIA) request to investigate the U.S. Department of Health and Human Services’ decision (HHS) to shift money away from taxpayers to pay off insurers.

CLICK HERE TO VIEW THE FOIA REQUEST

The Affordable Care Act (ACA) established the transitional reinsurance program that requires HHS to make payments to health insurers who enroll high-risk individuals and deposit a portion of the contributions from insurers into the U.S. Treasury. Unfortunately for taxpayers, it appears when HHS collected less funds than required by the ACA, the agency decided to allocate all transitional reinsurance program funding to health insurers, depriving taxpayers of billions of dollars.

CoA Institute President and CEO, and former federal judge, Alfred J. Lechner, Jr.:

“COA Institute seeks to understand why the Obama Administration bailed out insurance companies with money that should have been returned to the U.S. Treasury to benefit taxpayers. Providing insurers with the entire contribution from the transitional reinsurance program is not the intention of section 1341(b)(4) of the Affordable Care Act. American taxpayers have a right to know why the Obama Administration skirted the law and gave money intended for the U.S. Treasury to insurance companies.”

Background:

Section 1341 of the ACA created the transitional reinsurance program. This program requires that HHS collect reinsurance contributions from health insurance providers and third party administrators on behalf of group health plans. In order to comply with the law, HHS was supposed to use those contributions to make payments to health insurers who enroll high-risk individuals and deposit a portion of the contributions in the U.S. Treasury. In total for 2014, 2015, and 2016, taxpayers were scheduled to receive $5 billion. According to the Congressional Research Service, providing the entire contribution from the transitional reinsurance program to health insurance providers is “in conflict with a plain reading of 1341(b)(4).”

CoA Institute requests documents and communications to understand the Obama Administration’s decision to use taxpayer money to pay off health insurance companies. The full FOIA request is available HERE.

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04/29/2015

HHS Inspector General Finds Potential Misuse of Obamacare Federal Grant Dollars

By: Aram Gavoor

The Inspector General for Health and Human Services, Daniel R. Levinson (HHS IG), sent a letter this week to Centers for Medicare & Medicaid Services (CMS) expressing concern that Obamacare state exchanges (State-based marketplaces or SBMs) may be unlawfully spending federal grant dollars to fund operations. The HHS IG identified the issue in the midst of audits of establishment or startup grant monies disbursed to SBMs.

The violation of the law is under Section 1311(a) of the Affordable Care Act (ACA), which requires that since January 1, 2015, SBMs must be self-sustaining. According to the HHS IG: “We have concerns that, without more detailed guidance from CMS, SBMs might have used, and might continue to use, establishment grant funds for operating expenses after January 1, 2015, contrary to law.”

This is not, however, the first time that ACA grant funds have potentially been misused.

In September 2014, Cause of Action exposed the fraudulent misuse of Navigator grant funds by Southern United Neighborhoods (SUN) in light of allegations that United Labor Unions Local 100 (ULU), a federal subgrantee of SUN, directed an ACA navigator, paid with federal grant funds, to recruit members for ULU in Texas.

In a letter to the HHS IG requesting an investigation and audit of SUN, Cause of Action explained that a former employee of SUN filed a class action lawsuit in which he sought damages for unpaid overtime for himself and other putative class members under federal labor law. He alleged that SUN and ULU shared control of the terms and conditions of his Navigator duties, and that he was directed by the labor union to recruit new ULU members by engaging cafeteria workers at schools in the course of his ACA work. OMB Circular A-133 and relevant HHS regulations mandate that federal grand funds may only be used for approved programmatic purposes, which does not include such behavior.

Cause of Action is cautiously optimistic that SUN and ULU will be held accountable for their potential misuse of ACA grant money. The HHS IG recently sent a letter to Cause of Action, confirming that there is an “open and ongoing investigation concerning this matter.” Both of these instances evince the need for the HHS IG to conduct a robust investigation/audit into the misuse of Obamacare funds.

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10/20/2014

Fox News: Watchdog claims union’s legal fight reveals ObamaCare fraud

Read the full story: Fox News

Non-profit group Southern United Neighborhoods got a $1.3 million federal grant in 2013 to serve as a “navigator,” enrolling people in Affordable Care Act coverage. The group subcontracted with United Labor Unions Local 100, which, according to Cause of Action, paid members less than it billed the government and, in some cases, paid them to recruit union members. The watchdog group discovered the alleged discrepancy in court papers filed by union workers suing the labor organization for unpaid overtime.

“Southern United Neighborhoods and ULU Local 100, both rebranded ACORN entities, present a risk of violating the law – this time by potentially misusing over $1.3 million of taxpayer dollars for union activities instead of enrolling individuals in the Affordable Care Act,” Daniel Epstein, executive director for Cause of Action said to FoxNews.com.

Epstein and his group sent a letter to the federal Health and Human Services Inspector General this week asking that SUN and the union be investigated for fraud.

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10/7/2014

Cause of Action Requests Investigation and Audit of Affordable Care Act Navigator in Texas for Potential Misuse of Federal Funds

FOR IMMEDIATE RELEASE CONTACT:

September 30, 2014 Mary Beth Hutchins, 202-400-2721

Cause of Action Requests Investigation and Audit of Affordable Care Act Navigator in Texas for Potential Misuse of Federal Funds

Allegations against Southern United Neighborhoods and United Labor Unions Point to Misuse of Federal Funds by Failing to Comply with Navigator requirements

WASHINGTON – Cause of Action (CoA), a government oversight organization, requested today that the Inspector General of Health and Human Services investigate and audit Southern United Neighborhoods (SUN) for potential fraud in light of legal allegations that United Labor Unions Local 100 (ULU), a federal subgrantee of SUN, directed an Affordable Care Act (ACA) navigator, paid with federal grant funds, to recruit members for ULU in Texas.

In a letter to Inspector General Daniel Levinson, Cause of Action states:

“Under the Internal Revenue Code, SUN’s primary purpose cannot be to support a non-charitable purpose. Moreover, OMB Circular A-133 and appropriate HHS regulations require that federal grant money be used for an approved programmatic purpose, which is belied by ULU’s alleged direction of a federally-funded navigator to conduct recruiting activities for the benefit of the labor union. Given the amount of federal dollars at issue – over $1.3 million — the Inspector General should investigate SUN and conduct an audit into the potential misuse of ACA navigator funds.”

You can read the full letter here.

About Cause of Action:

Cause of Action is a non-profit, nonpartisan government accountability organization that fights to protect economic opportunity when federal regulations, spending and cronyism threaten it. For more information, visit www.causeofaction.org.

To schedule an interview with Cause of Action’s Executive Director Dan Epstein, contact Mary Beth Hutchins, mary.beth.hutchins@causeofaction.org

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09/17/2014

Cause of Action Supports Congressional Efforts for an Inspector General over the Affordable Care Act

FOR IMMEDIATE RELEASE CONTACT:

September 17, 2014 Mary Beth Hutchins, 202-400-2721

Cause of Action Supports Congressional Efforts for an Inspector General over the Affordable Care Act

CoA Sends Letter of Support for Special Inspector General for Monitoring the Affordable Care Act of 2014, H.R. 4158

WASHINGTON – Cause of Action (CoA), a government oversight group, sent a letter today supporting legislation establishing an Inspector General who will monitor the implementation and administration of the Affordable Care Act. SIGMA, the Special Inspector General for Monitoring the Affordable Care Act of 2014, is sponsored by Rep. Peter Roskam and has been referred to the House Education and the Workforce’s Subcommittee on Health, Employment, Labor, and Pensions.

CoA’s letter states in part:

The Affordable Care Act (“ACA” or “Obamacare”) is a deceptively complex and non-transparent law that has created one of the largest government bureaucracies in decades. The American public already has seen countless problems with the implementation of various aspects of this law, and little has been done to address the risks of waste, fraud and abuse of the hundreds of millions of taxpayer dollars that states are receiving to run their exchanges or marketplaces. By authorizing a Special Inspector General to focus on monitoring ACA, the SIGMA Act of 2014 has the potential to curb waste, fraud, and abuse. If done properly – by utilizing a robust inspector general who acts independently from HHS and the officials in charge of implementing the ACA – this approach should, in turn, lower health care costs for taxpayers.