Healthcare Provider Lawsuits v. Feds Begin

Blue Cross insurer sues U.S. for funds owed under health care law

BusinessInsurance: Highmark Inc. and its subsidiaries have sued the federal government for failing to pay funds the insurers say they are owed through one of the Affordable Care Act’s public health insurance exchange safety net programs.

Pittsburgh-based Highmark, the fourth-largest Blue Cross and Blue Shield insurer, is demanding $222.9 million, which it argues it is owed through the ACA risk corridor program for 2014 losses, according to the lawsuit filed Tuesday in the U.S. Court of Federal Claims in Washington.

Highmark said the government has paid only $27.3 million of the total owed for 2014. In early April, Highmark President and CEO David Holmberg said during an analyst call that the insurer was owed more than $500 million from the risk corridor program for 2014 and 2015.

The risk corridor program is intended to help stabilize premiums by offsetting insurers’ losses during the first three years of the public health exchanges.

But the U.S. Centers for Medicare and Medicaid Services last year said it would pay only 12.6% of the money insurers requested for 2014 losses. CMS said the rest of the tab would be paid in 2015 and 2016 if necessary.

The suit accuses the government of breach of good faith and fair dealing among other allegations.

CMS could not be immediately reached for comment.

“The United States has specifically admitted in writing its statutory and regulatory obligations to pay the plaintiff insurers the full amount of risk corridor payments owed to them for calendar year 2014, but it has failed to pay the full amount due,” the lawsuit states.

“Instead, the government arbitrarily has paid the plaintiff insurers only a pro-rata share — less than 12.6% — of the total amount due, asserting that full payment to the plaintiff insurers is limited by available appropriations, even though no such limits appear anywhere in the ACA or its implementing regulations or in the plaintiff insurers’ contracts with the government.”

In a statement Monday, Mr. Holmberg said the Highmark has a “fiduciary responsibility to our 5.2 million health plan members to seek payment.”

Still, Mr. Holmberg said the insurer “remains committed” to the public health exchanges.

Highmark said it tried to negotiate with CMS, which the insurer said refused requests for full payment. It also said CMS has taken the position that “none of the risk corridor payments” for 2014, 2015 and 2016 are due until fall 2017 after the program has concluded.

The insurers involved in the lawsuit, First Priority Life Insurance Co. Inc. et al v. USA, include First Priority Life Insurance Co., Highmark BCBSD Inc., Highmark Inc., Highmark Select Resources Inc., Highmark West Virginia Inc., and HM Health Insurance Co.

In February, Lake Oswego, Oregon-based insurer Health Republic Insurance Co. of Oregon, which now is out of business, filed a $5 billion class action against the federal government for failing to make the risk corridor payments.

**** Good news?

Sessions, Cassidy to introduce ‘The World’s Greatest Health Care Bill. Ever’

FNC: House Rules Committee Chairman Pete Sessions, R-Texas, and Sen. Bill Cassidy, R-La., plan to introduce what they are terming an “alternative” health care bill Thursday which will not repeal ObamaCare, but work alongside the existing Affordable Care Act and modify various parts of the system.


The legislation is technically called the HELP Act, short for “Health Empowerment Liberty Plan.”  Sessions however prefers a less clinical moniker with a title infused with a dose of Donald Trump-esque hubris. Instead, the Texas Republican calls the legislation “The World’s Greatest Health Care Bill. Ever.”

Sessions notes that the legislation allows people to keep ObamaCare if they so desire, noting that his measure does not entail a full repeal of ObamaCare.

“Someone who repeals (ObamaCare) is left with nothing,” he said.

That’s why his bill works in tandem with the existing law.

Meanwhile, it does get worse.

UnitedHealth Quits 27th Obamacare State as Insurer to Exit N.J.

Bloomberg: UnitedHealth Group Inc. is exiting New Jersey’s Obamacare exchange, marking the 27th state market the insurer is quitting.

UnitedHealth’s Oxford Health Plans unit won’t participate in New Jersey’s individual market in 2017, on the Affordable Care Act exchange or elsewhere, according to a letter obtained by Bloomberg through an open-records request. Another unit will continue selling plans outside of Obamacare, and the company will keep offering coverage to small businesses, according to Marshall McKnight, a spokesman for New Jersey’s Department of Banking & Insurance.

Chief Executive Officer Stephen Hemsley said last month that UnitedHealth would only offer ACA plans in a “handful of states” for 2017, though the company hasn’t listed them. The company is retreating from the markets created by the ACA amid mounting losses on the policies. Bloomberg has confirmed that the insurer is exiting at least 27 of the 34 states where it sold 2016 coverage.

The company will still probably sell ACA plans in at least three states next year: New York and Nevada have confirmed UnitedHealth’s participation and the company has filed plans to participate in Virginia.

In addition to UnitedHealth, several other insurers offered plans in New Jersey last year, according to the Kaiser Family Foundation. They include Oscar Insurance Corp., AmeriHealth, Health Republic Insurance of New Jersey and Horizon Blue Cross Blue Shield of New Jersey.

House Republicans Win Obamacare Lawsuit

Today, when reporters questioned Josh Earnest about the Obamacare lawsuit loss to the House, his response: “They’ve been losing for 6 years and they’ll lose it again”. The judge ordered a ‘stay’ on the money.

FNC: A federal judge ruled Thursday for House Republicans in a challenge brought against the Obama administration over the legality of certain spending under ObamaCare.

U.S. District Judge Rosemary Collyer ruled the spending unconstitutional — while putting the decision on hold pending appeal.

The ruling Thursday marks a win for House Republicans who brought the politically charged legal challenge, and a legal setback for the administration.

“Today’s ruling by the DC federal court is an important step toward restoring the separation of powers and stopping President Obama’s power grab. The Constitution is very clear: it is Congress’ job to write our laws and it is the President’s duty to enforce them,” House Judiciary Committee Chairman Bob Goodlatte, R-Va., said in a statement.

At issue was a $175 million program authorizing payments to insurers that Republicans claimed were not appropriated by Congress. On the question of whether the money could be distributed anyway under another program, Collyer wrote in her opinion: “It cannot.”

“None of the Secretaries’ extra-textual arguments – whether based on economics, ‘unintended’ results, or legislative history – is persuasive,” she wrote. “The Court will enter judgment in favor of the House of Representatives and enjoin the use of unappropriated monies to fund reimbursements due to insurers” under that section.

Collyer said the law is “clear,” and money was not allocated for that program.

She then said she would stay the injunction, giving the administration a chance to appeal. Collyer, with the U.S. District Court for the District of Columbia, is a George W. Bush appointee nominated in 2002.

The controversial payments to insurers were meant to reimburse them over a decade to reduce co-payments for lower-income people.

The House argued that Congress never specifically appropriated that money and denied an administration request for it, but that the administration is spending the money anyway.

The White House previously described the case as a “partisan attack” and predicted it would be dismissed.

Asked Thursday about the latest decision, White House Press Secretary Josh Earnest said this isn’t Republicans’ first legal fight over ObamaCare but warned “they’ll lose it again.”

He reiterated that the administration is confident in its legal arguments here.

The administration is expected to appeal Thursday’s ruling to the U.S. Court of Appeals for the District of Columbia Circuit.


“Paying out Section 1402 reimbursements without an appropriation thus violates the Constitution,” Collyer wrote in her decision. “Congress authorized reduced cost sharing but did not appropriate monies for it, in the FY 2014 budget or since. Congress is the only source for such an appropriation, and no public money can be spent without one.”

The ruling is not final; the Obama administration will near certainly appeal this ruling to an appellate court.

While the Affordable Care Act authorized these cost-sharing subsidies when it was passed in 2010, the House lawsuit says it never appropriated the necessary funding to be sent over to Health and Human Services. Here’s the relevant bit of the lawsuit on this issue:

Congress has not appropriated any funds for Section 1402 Offset Program payments to Insurers for Fiscal Years 2014 or 2015.

Notwithstanding the lack of any congressional appropriation for Section 1402 Offset Program payments, defendants [Jack] Lew and the Treasury Department, at the direction of defendants [Sylvia] Burwell and HHS, began making Section 1402 Offset Program payments to Insurers in January 2014, and, upon information and belief, continues to make such payments.

The Office of Management and Budget (“OMB”) has reported that Section 1402 Offset Program payments to Insurers for Fiscal Year 2014 were estimated to be $3.978 billion. Later, the lawsuit argues that “the House has been injured, and will continue to be injured, by the unconstitutional actions of defendants [Treasury Secretary Jack] Lew … which, among other things, usurp the House’s legislative authority.” More here from Vox.

Classified Obamacare Documents?

The House Oversight and Government Reform Committee, filed the subpoenas in 2013, see the announcement here. In part:

The Committee initially requested information on the CO-OP program in October 2012 and again in March 2013. A June 7, 2013 letter to Secretary Sebelius stated, “[T]his delay is unacceptable and your lack of transparency is troubling.”

The Obamacare CO-OP program used taxpayer money to loan $2 billion to companies establishing non-profit health insurance issuers. However, the Office of Management and Budget estimated the taxpayer losses for the loans at 43.2 percent. Moreover, several companies have experienced legal or financial troubles. For instance, the Vermont Health Co-op, which received a $34 million taxpayer-backed loan, was last month denied an insurance license by the state of Vermont. In letters to HHS, the Committee expressed concern that the process used to select loan recipients was flawed and lacked transparency.


The Obamacare co-ops are tax-funded non-profit entities that were supposed to compete with private insurance companies.  In this, they have failed spectacularly.  In the last couple of years, 12 of the co-ops have shut their doors, costing doctors and hospitals million of dollars in losses.  This year, some experts are predicting that up to 8 of the 11 remaining co-ops will go under as well. More here from AmericanThinker.

IBD: Being the “most transparent administration” in history apparently doesn’t mean complying with a congressional subpoena to find out why more than half of the ObamaCare co-ops have failed.

That’s what the House Oversight and Government Reform Committee is learning, at least. It has subpoenaed information relating to the 23 nonprofit co-op insurance companies that ObamaCare established with $2.5 billion in government loans.

The co-ops were supposed to provide price competition against commercial insurers, but last year many pushed for and got huge, double-digit rate hikes. Even so, more than half of the 23 set up have failed already, and it’s likely that eight more will collapse this year.

Given that taxpayers are on the hook for billions in loans that might never get repaid, it is only fitting that Congress should find out what went wrong and why.

But instead of providing answers, the Obama administration is stonewalling.

Oversight Committee Chairman Jason Chaffetz said at a hearing this week, “Health and Human Services has not provided any valid legal reason for withholding information from this committee.”

The committee demanded documents back in November that would shed light on how the administration picked these co-ops, how much money has been spent and what plans the administration has to get federal loan money back from failed co-ops.

Chaffetz says that Obama officials merely “assert that if certain information was released publicly, it could cause consumers to think twice before enrolling in co-op insurance plans.”

That makes absolutely no sense. If other co-ops are likely to fail, then consumers should be aware of it, so they can avoid having their coverage disrupted midyear, which could mean changing doctors, paying higher out-of-pocket costs and so on.

This is hardly the first time that the administration has stonewalled congressional inquiries. If anything, it seems to be the unstated policy of the Obama administration.

In addition to the ObamaCare documents, for example, the Oversight Committee is battling to get documents related to the EPA’s massively expensive water regulations, the Department of Homeland Security’s policy on airport credentialing, the massive hack of government employee records and so on.

Obama officials get away with concealing anything and everything that might prove embarrassing or controversial because the “speaking truth to power” mainstream press largely ignores the stonewalling. So the White House doesn’t suffer any consequences or feel any pressure to change.

You can bet the media’s lackadaisical attitude about government transparency will suddenly change if a Republican ends up in the White House next year. But in the meantime, we may never get a clear answer to why the Obama administration flushed $2.5 billion in taxpayer money down the drain.

United Healthcare Bails on Obamacare

Nancy Pelosi, call holding on line 3.  There are other healthcare providers that are likely to bow out of Obamacare in 2017.

UnitedHealth pulls back on ObamaCare exchanges amid huge losses

FNC: The nation’s largest health insurer, fearing massive financial losses, announced Tuesday that it plans to pull back from ObamaCare in a big way and cut its participation in the program’s insurance exchanges to just a handful of states next year – in the latest sign of instability in the marketplace under the law.

UnitedHealth CEO Stephen Hemsley said the company expects losses from its exchange business to total more than $1 billion for this year and last.

Despite the company expanding to nearly three dozen state exchanges for this year, Hemsley said the company cannot continue to broadly serve the market created by the Affordable Care Act’s coverage expansion due partly to the higher risk that comes with its customers.

UnitedHealth Group Inc. said it now expects to lose $650 million this year on its exchange business, up from its previous projection for $525 million. The insurer lost $475 million in 2015, a spokesman said.

UnitedHealth has already decided to pull out of Arkansas, Georgia and Michigan in 2017, and Hemsley told analysts during a Tuesday morning conference call that his company will not carry financial exposure from the exchanges into 2017.

“We continue to remain an advocate for more stable and sustainable approaches to serving this market,” he said.

The state-based exchanges are a key element behind the Affordable Care Act’s push to expand insurance coverage. But insurers have struggled with higher-than-expected claims from that business.

A recent study by the Blue Cross Blue Shield Association detailed how many new customers nationwide under ObamaCare are higher-risk. It found new enrollees in individual health plans in 2014 and 2015 had higher rates of hypertension, diabetes, depression, coronary artery disease, HIV and Hepatitis C than those enrolled before ObamaCare.

On the heels of Tuesday’s announcement, Sen. Ben Sasse, R-Neb., said in a statement it’s a sign of “the President’s broken promise that families would have more choices under ObamaCare.”

The Kaiser Family Foundation, in an analysis on the prospect of United’s exit, said “the effect on insurer competition could be significant in some markets – particularly in rural areas and southern states” if it is not replaced.

In the most extreme scenario, “If United were to leave the exchange market overall, 1.8 million Marketplace enrollees would be left with two insurers, and another 1.1 million would be left with one insurer as a result of the withdrawal,” the analysis said.

UnitedHealth had moved slowly into the newly created market by participating in only four exchanges in their first year, 2014. But the company then expanded to two dozen exchanges last year and said in October it would add to that total. It currently participates in exchanges in 34 states and covers 795,000 people

A month after announcing its latest exchange expansion, UnitedHealth started voicing second thoughts. The insurer said in November that it would decide by the first half of this year whether to even participate in the market for 2017.

Insurers say they have struggled, in particular, with customers who have signed up for coverage outside regular enrollment windows and then dumped expensive claims on their books, a problem the government has said it would address.

A dozen nonprofit health insurance cooperatives created by the ACA to sell coverage on the exchanges have already folded, and the survivors all lost millions last year.

Other publicly traded insurers like Aetna have said that they have lost money on this business as well. But some companies, like Molina Healthcare, have said they have managed to turn a profit from the exchanges.

Analysts expect other insurers to also trim their exchange participation in 2017, especially if they continue to struggle with high costs.

Cyber Intrusions, National Security Threat to Visa System

Primer: Listing a few demonstrating how vulnerable all segments of government, personal databases and corporations have forced lower standards of national security protections. Now with the threat to the State Department U.S. Visa system, terrorists and spies may exploit software security gaps. Anyone fixing this anywhere?

Cyber attack on Office of Personnel Management

Cyber attack of Obamacare

Cyber attack on hospital systems

Cyber attack on law firms

EXCLUSIVE: Security Gaps Found in Massive Visa Database

ABCNews: Cyber-defense experts found security gaps in a State Department system that could have allowed hackers to doctor visa applications or pilfer sensitive data from the half-billion records on file, according to several sources familiar with the matter –- though defenders of the agency downplayed the threat and said the vulnerabilities would be difficult to exploit.

Briefed to high-level officials across government, the discovery that visa-related records were potentially vulnerable to illicit changes sparked concern because foreign nations are relentlessly looking for ways to plant spies inside the United States, and terrorist groups like ISIS have expressed their desire to exploit the U.S. visa system, sources added.

“We are, and have been, working continuously … to detect and close any possible vulnerability,” State Department spokesman John Kirby said in a statement to ABC News.

After commissioning an internal review of its cyber-defenses several months ago, the State Department learned its Consular Consolidated Database –- the government’s so-called “backbone” for vetting travelers to and from the United States –- was at risk of being compromised, though no breach had been detected, according to sources in the State Department, on Capitol Hill and elsewhere.

As one of the world’s largest biometric databases –- covering almost anyone who has applied for a U.S. passport or visa in the past two decades -– the “CCD” holds such personal information as applicants’ photographs, fingerprints, Social Security or other identification numbers and even children’s schools.

Those records could be a treasure trove for criminals looking to steal victims’ identities or access private accounts. But “more dire” and “grave,” according to several sources, was the prospect of adversaries potentially altering records that help determine whether a visa or passport application is approved.

“Every visa decision we make is a national security decision,” a top State Department official, Michele Thoren Bond, told a recent House panel.

Last year alone, the State Department received -– and denied –- visa applications from more than 2,200 people with a “suspected connection to terrorism,” a senior Homeland Security Investigations official, Lev Kubiak, told lawmakers last month.

One official associated with State Department efforts to address the vulnerabilities said a “coordinated mitigation plan” has already “remediated” the visa-related gaps, and further steps continue with “appropriate [speed] and precision.”

“[We] view this issue in the lowest threat category,” the official said, noting that any online system suffers from vulnerabilities.

But speaking on the condition of anonymity, some government sources with insight into the matter were skeptical that CCD’s security gaps have actually been resolved.

“Vulnerabilities have not all been fixed,” and “there is no defined timeline for closing [them] out,” according to a congressional source informed of the matter.

“I know the vulnerabilities discovered deserve a pretty darn quick [remedy],” but it took senior State Department officials months to start addressing the key issues, warned another concerned government source.

Despite repeated requests for official responses by ABC News, Kirby and others were unwilling to say whether the vulnerabilities have been resolved or offer any further information about where efforts to patch them now stand.

PHOTO: U.S. Customs and Border Protection test new biometric technologies with face and iris cameras at the Otay Mesa border pedestrian crossing in San Diego, Calif. on Dec. 10, 2015.Richard Eaton/Demotix/Corbis
U.S. Customs and Border Protection test new biometric technologies with face and iris cameras at the Otay Mesa border pedestrian crossing in San Diego, Calif. on Dec. 10, 2015.more +

Nevertheless, many State Department officials questioned whether terrorists or other adversaries would have the capabilities to access and successfully exploit CCD data — even if the security gaps were still open.

CCD allows authorized users to submit notes and recommendations directly into applicants’ files. But to alter visa applications or other visa-related information, hackers would have to obtain “the right level of permissions” within the system -– no easy task, according to State Department officials.

There is also continuous oversight of the database and a series of other “fail-safes” built into the process, including rigorous in-person interviews and additional background checks, the officials said.

Kirby, the spokesman, described any recent security-related findings as a product of his department’s “routine monitoring and testing of systems” to “identify and remediate vulnerabilities before they can be exploited.”

PHOTO: The U.S. Department of State non-immigrant visa application website is seen in a screen grab made on March 30,
The U.S. Department of State non-immigrant visa application website is seen in a screen grab made on March 30, 2016.

State Department documents describe CCD as an “unclassified but sensitive system.” Connected to other federal agencies like the FBI, Department of Homeland Security and Defense Department, the database contains more than 290 million passport-related records, 184 million visa records and 25 million records on U.S. citizens overseas.

Without getting into specifics, sources said the vulnerabilities identified several months ago stem from aging “legacy” computer systems that comprise CCD.

“Because of the CCD’s importance to national security, ensuring its data integrity, availability, and confidentiality is vital,” the State Department’s inspector general warned in 2011.

The database’s software and infrastructure will be overhauled in the years ahead, according to the State Department.