House Energy and Commerce Committee questions CMS on CO-OP oversight
“The committee is concerned that CMS does not have a plan to ensure that the remaining CO-OPs are financially solvent,” Full Committee Chairman Fred Upton (R-MI), CMS Acting Administrator Andrew Slavitt, Oversight and Investigations Subcommittee Chairman Tim Murphy (R-PA) and Health Subcommittee Chairman Joseph Pitts (R-PA) wrote in the letter. “The existing 11 CO-OPs represent over one billion dollars in federal loans that should be paid back to the federal treasury over the next decade. Additionally, the committee believes that CMS should take actions to recoup federal dollars from failed CO-OPs wherever possible, in order to mitigate the loss to taxpayers.”
Of the 23 CO-OPS, 12 of them have closed, which has costed taxpayers over $1.23 billion. CMS Chief of Staff Mandy Cohen was unable to respond concerning actions the agency would take for the 11 remaining CO-OPS that are having problems, after the Oversight and Investigations Subcommittee sent a letter on Tuesday following up on a Nov. 5 hearing. The remaining CO-OPS have received more than $1 billion in federal loans.
“Members questioned CMS’ decision to award an additional $91 million to Health Republic of New York in late 2014, when Health Republic had documented and significant financial difficulties,” they wrote. “In fact, CMS awarded $350 million to six CO-OPs in late 2014; three of the CO-OPs that were awarded additional funds closed before open enrollment this year. Given CMS’ decision to spend more taxpayer money on failing CO-OPs, the committee is concerned that CMS is unable to manage the CO-OP program effectively.”
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U.S. House Committee on Energy and Commerce 2125 Rayburn House Office Building Washington, DC - 20515