Verma defends cuts to navigators and halting risk adjustment payments

Virgil Dickson

About Virgil Dickson

Virgil Dickson reports for Modern Healthcare from Washington, D.C., on the federal regulatory agencies. Before joining Modern Healthcare in 2013, he was the Washington-based correspondent for PRWeek and an editor/reporter for FDA News.

Photo: Jeff Porter/AHCJSeema Verma, administrator for the Centers for Medicare and Medicaid Services, spoke at a briefing on public health emergencies at the CDC in December.

Seema Verma, administrator for the Centers for Medicare and Medicaid Services, was on defense on Thursday during a meeting with reporters who pushed her to explain a series of controversial decisions made by her agency in recent weeks.

The agency has faced accusations of sabotage by health advocates after the agency’s decisions to end risk payments to insurance companies offering plans on the individual market and to dramatically cut funding for navigators who help consumers sign up for coverage. Verma insisted these moves were not attempts to undermine the Affordable Care Act, which the Trump administration has sought to repeal.

The risk payment program is meant to reduce the incentive for health insurers to cherry-pick healthy members. It shuffles money from plans with healthier than average members to those with larger numbers of sicker, higher-cost members.

CMS halted the payments last week because of a ruling in the Federal District Court of New Mexico. The judge there tossed out the formula used to calculate payments, finding that it was flawed.

The CMS has said that until that legal conflict is resolved it can’t make the payments, which equal $10.4 billion for 2017.

“We really are in a tough spot,” Verma said to reporters at an event hosted by Alliance for Health Policy on Thursday.“I think there has been a lot of discussion about whether the Trump Administration made a decision, but we weren’t, the court told us what to do and we have to follow what it said.”

The agency also faced criticism following its decision to cut funds going to navigators on the federal exchange to just $10 million down from $36 million last year. Funding for navigators has fallen 84 percent since 2016 when funding was $62.5 million.

Verma said these cuts were made given that navigators directly enroll less than 1 percent of the exchange population. Also, she said she is attempting to be a better steward of federal financial resources.

Some navigators have enrolled fewer than 100 people at an average cost of $5,000 per enrollee, according to the CMS. That’s compared to $2.40 per enrollee cost for enrollees signed up by agents and brokers. Their clients accounted for 42 percent of exchange enrollment this year.

“I can’t in good conscience allow that to continue,” Verma said of the cost disparity between the different sign-up entities.

She noted that after CMS cut funding for navigators from $62.5 million to $36 million in 2017, sign-ups remained stable and she feels that continued improvement to Healthcare.gov, as well as efforts of other enrollment entities not funded, will ensure signups remain high.

Reporters in the room pushed at her criticism of navigators. They said these entities sometimes spent hours with a consumer who then goes home and completes enrollment. It doesn’t appear that the agency gives credit to navigators in instances navigators helped guide a person but did not directly sign that person up.

Verma didn’t directly comment on the assertion and instead reiterated that sign-ups wouldn’t be adversely impacted by the cut in funds.

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