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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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11/7/2016

The Government Should Not Use Americans’ Confidential Tax Information to Sell ObamaCare

Washington D.C. – Cause of Action Institute (CoA Institute) today sent a Freedom of Information Act (FOIA) request to the Centers for Medicare and Medicaid Services (CMS) and requested two separate Inspector General (IG) investigations after details emerged about the federal government using confidential taxpayer information to market ObamaCare to individuals who have opted out of the program.

CoA Institute Assistant Vice President Henry Kerner: “Information obtained from tax returns should not be used to sell health insurance. The federal government is obligated to protect the confidentiality of tax returns. Instead, the Obama administration appears to be mining Americans’ tax returns to advertise and sell ObamaCare to people who don’t want it.”

A fact sheet released by CMS titled “Strengthening the Marketplace by Covering Young Adults” highlights CMS’s plan to boost ObamaCare enrollment by using taxpayer information. According to the fact sheet, “[f]or the first time this fall, we will conduct outreach to individuals and families who paid the fee for being uninsured, or claimed an exemption from that fee, for 2015.”  The law allows for personal tax information to be used only for the limited purpose of determining ObamaCare subsidy eligibility. It does not, however, permit CMS to market subsidies to taxpayers who have already rejected ObamaCare.

The potential disclosure of protected taxpayer information by the IRS raises concerns about whether the information is being appropriately safeguarded. To that end, CoA Institute sent requests for investigation to the Inspectors General of the Department of Justice (DOJ) and the Department of Health & Human Services (HHS).

In its FOIA request, CoA Institute requested all records related to the use of taxpayer information by CMS to contact individuals who paid the penalty for being uninsured in 2015, as well as all records relating to the June 2016 CMS report on how to enroll more young adults.

The FOIA to CMS is available HERE

The HHS IG request for investigation is available HERE

The DOJ IG request for investigation is available HERE

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09/22/2016

Cause of Action Institute Investigates Taxpayer Bailout of ObamaCare Insurance Companies

Washington, D.C. – Cause of Action Institute (CoA Institute) today sent a Freedom of Information Act (FOIA) request to the Centers for Medicare and Medicaid Services (CMS) to investigate the Obama administration’s apparent attempt to bailout insurers through judicial settlements to compensate for shortfalls in the Affordable Care Act (ACA) risk corridors program.

CoA Institute President and CEO, and former federal judge, Alfred J. Lechner, Jr.: “The continuing failures of the ObamaCare Risk Corridors Program raise serious concerns about the long-term viability of the program.  It appears the administration is attempting to circumvent the law by bailing out insurance companies through judicial settlements. Americans deserve to understand how far the administration is willing to go to prop up a failing program with taxpayer money.”

Under the ACA, 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. But because of the monetary shortfalls in the risk corridors program, payouts have been limited.

On September 9, 2016, CMS released a document entitled “Risk Corridors Payments for 2015,” stating that “no funds will be available at this time for 2015 benefit year risk corridors payments.” More concerning, the CMS document essentially invites judicial settlements with insurance companies:

We know that a number of issuers have sued in federal court seeking to obtain the risk corridors amounts that have not been paid to date. As in any lawsuit, the Department of Justice is vigorously defending those claims on behalf of the United States. However, as in all cases where there is litigation risk, we are open to discussing resolution of those claims. We are willing to begin such discussions at any time.

The CMS document raises serious questions about the intentions of the administration to fund the risk corridors program. Moreover, the U.S. Department of Justice Office of Legal Counsel has also determined that these “backdoor bailouts” are improper.

CoA Institute today requested all records referring to a lack of funds for risk corridors payments to insurance companies, as well as all records related to the September CMS document entitled “Risk Corridors Payments for 2015.”

The full FOIA can be found here.

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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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07/30/2013

Washington Examiner: Cause of Action files IRS complaint against Obamacare advocate Enroll America

Cause of Action files IRS complaint against Obamacare advocate Enroll America

BY KELLY COHEN | JULY 29, 2013 AT 7:35 PM

Cause of Action, a Washington-based non-profit government accountability group asked the IRS Monday to withdraw the tax-exemption of Enroll America, which was formed explicitly for the purpose of encouraging Americans to enroll in the Obamacare health insurance exchanges.

Cause of Action believes Enroll America should have its nonprofit status revoked because it does not adhere to the requirements in the tax code for tax exempt 501(c)(3) educational foundations.

In its complaint to the federal tax agency, Cause of Action said Enroll America “is engaged in commercial, for-profit business activities” and the “directors/officers/persons are using income/assets for personal gains.”

In addition, Cause of Action said the group “is organized more like a trade association for the healthcare industry, employing marketing and political tactics to sell health insurance. Accordingly, Enroll America is not organized and operating exclusively for a charitable purpose.”

Dan Epstein, Cause of Action’s executive director, said “an organization that has been granted tax deductible status but is actually depriving the American people of taxable revenue warrants an investigation.”

Cause of Action also plans to contact Covered California, California’s state health exchange, “to alert them of liabilities under federal and state laws and guidelines.”

Go here for more information on the Cause of Action complaint.

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