Officials at the Centers for Medicare & Medicaid Services (CMS) did a poor job of advising the struggling CO-OP carriers, possibly because they did not know much about the CO-OPs.

The staff of the Republican-led House Energy & Commerce Committee, which has been battling the Obama administration over Affordable Care Act program implementation and management for years, presents those conclusions in a new report on the ACA Consumer Operated and Oriented Plan program.

ACA drafters created the program in an effort to increase competition in the health insurance market by providing loans for member-owned, nonprofit health insurers.

The authors of the report have included a table on Page 8 showing CO-OP failure dates, and a table on Page 21 showing how bills from the ACA risk-adjustment program could make the 2015 net losses for the CO-OPs that were still alive in early 2016 even bigger.

The table shows, for example, that risk-adjustment obligations could increase the net loss at Newark, New Jersey-based Health Republic Insurance of New Jersey, a CO-OP that is entering rehabilitation, to about $47 million, from about $18 million.

The report authors contend that officials at CMS, the agency in charge of the CO-OP system, did a poor job of monitoring and helping the organizers of the small new carriers.

For insurers selling coverage through the ACA public exchange system, one major obstacle has been that a three-year risk corridors program that was supposed to use cash from thriving exchange plan issuers to help struggling issuers raised only enough cash from thriving issuers to pay about 13 percent of the program obligations for 2014.

CMS announced the funding shortfall Oct. 1, 2015.

“As late as September 26, 2015, CMS representatives informed a room full of executives of the CO-OP program at the annual [National Association of State Health Cooperatives] conference in Denver, Colorado, that they expected the program would be paid in full,” the report authors write, quoting a letter from a Land of Lincoln Mutual Health Insurance Company executive. “Several CO-OPs learned the very next week that this was not true for 2015 and were forced to close almost immediately.”

CMS officials have talked about trying to help CO-OPs with management and financial problems with a corrective action plan program, but CMS officials who sent letters to CO-OPs often had stale, inaccurate or incomplete information, according to the committee staff.

Related: Watchdog says CO-OP managers fumbled asset recovery ball

In one case, for example, CMS told a CO-OP the it had violated program rules by failing to generate medical management performance reports, even though the CO-OP had sent CMS medical management performance reports every quarter, according to the committee staff.

Related:

For feds, fate of dead CO-OPs’ former enrollees is a mystery

Ways and Means to mark up CO-OP bill

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