MIKE LEE Wnited States Senate WASHINGTON, DC 20510 ‘The Honorable Loretta Lynch Attomey General Department of Justice 950 Pennsylvania Avenue, NW Washington, DC 20530 ‘The Honorable Sylvia Burwell Secretary U.S. Department of Health and Human Services 200 Independence Avenue, $.W. ‘Washington, DC 20201 ‘The Honorable Andy Slavitt Acting Administrator Centers for Medicare & Medicaid Services 200 Independence Avenue 8.W. 314G HHH Washington, D.C. 20201 Dear Attorney General Lynch, Secretary Burwell, and Administrator Slavitt, We write to express our grave concerns regarding the potential participation of your departments in a multibillion dollar bailout of select health insurance companies through the Affordable Care ‘Act's Risk Corridors Program (RCP).! We also seek an explanation regarding your understanding of the availability of funds to settle claims for payment under the RCP. The health care law contained three risk mitigation programs, one of which is the temporary Risk Corridor Program. This program was originally intended to be implemented in a budget neutral manner, This intention was confirmed when Congress passed, with Presidential approval, two separate provisions of appropriations law confirming its budget neutrality. It now appears the Administration is preparing to circumvent these actions. In a November 19, 2015, memorandum addressing the Risk Corridors, the Centers for Medicare & Medicaid Services (CMS) stated that “the Affordable Care Act requires the Secretary to make full payments to issuers” and that “full payment is required” pursuant to the RCP.? CMS also stated that if the program experienced continued shortfalls, the Department of Health and Human '42 US.C. § 18062, 2 See Center for Medicare & Medicaid Servs., Risk Corridors Payments for the 2014 Benefit Year (Nov. 19, 2015), available at https:/wwww.cms.goviCCUO/Resources/Regulations-and-Guidance/ Downloads/RC_Obligation Guidance_11-19-15 pdf.Services (HHS) would “explore other sources of funding for risk corridors payments, subject to the availability of appropriations.” In a September 9, 2016, memorandum, CMS once again stated that “the Affordable Care Act requires the Secretary to make full payments to issuers” and that HHS would “record risk corridors payments due as an obligation of the United States Government for which full payment is required.” This memorandum also repeated that “in the event of a shortfall,” HHS would “explore other sources of funding for risk corridors payments, subject to the availability of appropriations."? The memorandum then went on to address recent suits filed by insurance issuers in federal court regarding non-payment under the RCP, expressing that, “as in all cases where there is litigation risk, we are open to discussing resolution of those claims,” and that “[w]e are willing to begin such discussions at any time.”* If “resolution of those claims” refers to settlement with payment from the Judgment Fund, 31 ULS.C. § 1304, any such payment would be illegal. The Judgment Fund is unavailable for payments if the awatd is otherwise provided for, by appropriation or statute. As the Congressional Research Service concluded in a January, 2015, memorandum requested by Senator Rubio, “[b]ased on the existence of an appropriation for the risk corridor payments”—namely, the provision of the Affordable Care Act creating the RCP and subsequent measures directing how payments shall be made pursuant to that provision—“it appears that Congress would have “otherwise provided for” any judgments awarding payments under that program to a plaintiff. As a result, the Judgment Fund would not appear to be available to pay for such judgments under current Jaw.”” Finally, CRS also stated in a memorandum requested by Senator Barrasso that even if the plaintiffs were successful in their lawsuits, they would not be able to recover any additional funds, until insurance companies paid additional money into the program or Congress appropriated additional funds, Specifically, CRS stated, “it appears that any payment to satisfy a judgment secured by plaintiffs seeking recovery of amounts owed under the risk corridors program would need to wait until such funds were made available through future program receipts by CMS or through additional funds appropriated by Congress.” Consequently, it would be inappropriate for the Judgement Fund to be used to settle any litigation stemming from the risk corridor program. Accordingly, we write to ascertain specifically how CMS intends to go about seeking “resolution of those claims” so that federal law is not violated. a, “See Center for Medicare & Medicaid Servs., Risk Corridors Payments for 2015 (Sept. 9, 2016), available at htps:/www «ms.gov/CCUO /Programs-and-Initiatives/Premium-Stabilization-Programs/Downloads/Risk-Corridors- for-2015-FINAL. PDF, Sia. Std 7 See Memorandum from Legislative Att'ys, Am, Law Div., Cong. Research Sery. to Senator Marco Rubio at 5 (Jan 5, 2016), available at hup://www.rubio.senate govipublic/_cacheifiles/lde92ef8-c340-4cfa-95c0- 67369a557Fle/2AA SEFSF 125279800BF ABCSB8BA37072.05.24.2016-crs-rubio-memo-risk-corridors: redacted pdf. 16-1-1. Does CMS believe that Congress has appropriated funds for payments to be made under the Risk Corridors Program, either pursuant to 42 U.S.C. § 18062 or in resolution of a claim filed against the government for non-payment under the RCP? Ja, If not, how does CMS intend to make “resolution of thfe] claims” in the ongoing matter? 1b, If so, what does CMS believe constitutes an appropriation from Congress to make payments, either pursuant to 42 U.S.C. § 18062 or in resolution of a claim filed against the government for non-payment under the RCP? 2. Does CMS believe that the Consolidated Appropriations Act, 2016, Pub. L.. No. 114-113, Div. 11§ 225, 129 Stat, 2242, 2624, which explicitly prohibits payments under the RCP absent sufficient revenue generated from the RCP itself,® nevertheless still allows CMS to make payments 10 insurers secking reimbursement pursuant to 42 U.S.C. § 18062 despite RCP revenue shortfalls, cither overtly or in resolution of claims against the government for non-payment? 2a, If so, by what authority and based on what appropriation does CMS believe it may make payments to insurers seeking reimbursement pursuant to 42 U.S.C. § 18062 despite RCP revenue shortfalls, either overtly or in resolution of claims against the government for non-payment? Thank you for your attention to this matter. Mikelee MarcoRubio U.S. Senator U.S. Senator Ben Sasse ‘Jobn Barrasso US. Senator USS. Senator * See Consolidated Appropriations Act, 2016, Pub, L. No. 114-113, Div. H § 225, 129 Stat, 2242, 2624 (2016) (None of the funds made available by this Act from the Federal Hospital Insurance Trust Fund or the Federal Supplemental Medical Insurance Trust Fund, or transfered fom other accounts funded by this Act othe “Centers for Medicare and Medicaid Services-Program Management’ account, may be used for payments under seetion 1342(b)1) of Public Law 111-148 (relating to risk eoetidors).”).