Providers may have no recourse on lost co-op health plan payments

Hospitals and doctors that cared for thousands of patients who were covered by the now-failed co-op health plans may get stiffed on what they are still owed, the Daily Caller reported.

Citing testimony from a Congressional hearing on the health plans last month, CMS officials apparently took the position that they are first in line to recoup payments because many of the health plans were extensively financed and subsidized with federal loans.

"For federal loans, there is an order of repayment. I believe we are at the very top of all of the creditors," CMS Chief Operating Officer Mandy Cohen said at the hearing. That statement was later confirmed by a CMS spokesperson, the Daily Caller reported.

The performance of the co-ops has been a significant disappointment. A 2015 report by the Office of Inspector General of the Department of Health and Human Services concluded that virtually all of the nearly two dozen plans fell short on initial enrollment projections, lost significant sums of money, and had websites with technical flaws that may have had an impact on overall enrollments.

The failure of the co-ops has left the financial fate of many providers uncertain. In New York, where Health Republic Insurance went under at the start of 2016, as much as $200 million in unpaid claims remain up in the air. In that instance, a state investigation concluded that overregulation of the health plan on the state level may have contributed to its demise.

Another co-op in Oregon has sued the federal government, claiming tightening risk corridors led to its demise.

To learn more:
- read the Daily Caller article