(Image: Centers for Medicare and Medicaid Services)

The Centers for Medicare and Medicaid Service says it will end the Affordable Care Act cost-sharing reduction subsidy in such a way that the program will pull money out of health insurers, rather than paying any more money into health insurers.

CMS officials talk about subsidy program shutdown procedures in a document posted Monday, on a semiprivate technical assistance website.

The subsidy has been helping 6 million low-income Affordable Care Act public exchange plan users pay their health coverage deductibles, co-payments and coinsurance amounts. Trump administration officials say they lack a valid congressional appropriation to make the payments and will stop making the payments immediately, starting with a round of payments insurers were expecting to get last week.

A federal judge is holding a hearing on the subsidy cut-off later today and could issue an injunction that would require the government to continue making the payments, or affect how the government implements a subsidy payment cut-off.

(Related: Federal Judge May Keep ACA Subsidy Money Flowing)

CMS, an arm of the U.S. Department of Health and Human Services, has been making subsidy payments in advance, based either on insurer enrollment database files or, in some cases, enrollment spreadsheets.

CMS has been going through a monthly reconciliation process with insurers to adjust final subsidy payment amounts to reflect final and complete enrollee coverage information.

Officials at the Center for Consumer Information and Insurance Oversight, the CMS division in charge of the public exchange system, talk about how the cut-off will work in a batch of answers to questions about subsidy payment cessation. 

Officials say that, for October 2017 and later months, they will stop making any payments related to adjustments of past cost-sharing reduction subsidy payment amounts, unless Congress appropriates funding for those adjustments.

“Issuers will therefore receive no net payments of 2017 CSR in the October and future payment cycles,” officials say.

For months before October 2017, CMS will make no cost-sharing reduction subsidy payments if the reconciliation process shows an insurer received too little subsidy money, officials say.

“However, if a discrepancy results in an overpayment to the issuer, CMS will proceed with the collection of those charges after the issuer has been notified of CMS’s discrepancy decision,” officials say.

—-Read Sudden Cost-Sharing Reduction End Could Thump Florida Blue on ThinkAdvisor.

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