Officials at the Centers for Medicare & Medicaid Services (CMS) have confirmed that they are trying to figure out what they can get in investor cash moving into the Consumer Operated and Oriented Plan (CO-OP) carriers.
CMS looks at CO-OP management regulations in a short batch of answers to CO-OP questions that was posted on its website this week.
Drafters of the Patient Protection and Affordable Care Act (PPACA) set up a CO-OP startup loan program in an effort to get nonprofit, member-owned carriers competing with traditional health carriers. CMS and its parent, the U.S. Department of Health and Human Services (HHS), tried to maximize the independence of the CO-OPs by forbidding the CO-OPs from having any representative from a health insurer, or from state government, on its board.
See also: PPACA: HHS Drafts CO-OP Regs
In the new document, CMS officials present the following question: “Can CMS waive or change the requirements for serving on a CO-OP board, which could help CO-OPs diversify board membership?”
CMS officials explained that, “CMS is exploring what changes could be made to help CO-OPs diversify their boards and grow and raise capital, while still preserving the fundamentally member-run nature of the CO-OP program.”
In the same batch of answers, CMS also respond to questions about decisions CMS made in 2015 to let some CO-OPs raise capital by using PPACA start-up loans as surplus notes, or instruments that could be used as loan collateral.
CMS officials say the CO-OP program provided two types of financing: startup loans and solvency loans.
The loan terms require a CO-OP to treat a startup loan as a general obligation and pay it back at a specific time.