The Trump administration is planning to suspend some payments to insurance companies, a key provision of the Affordable Care Act, this fall in the wake of a federal judge's decision, according to The Wall Street Journal.
"As a result of this litigation, billions of dollars in risk adjustment payments and collections are now on hold", she said.
CMS officials did not say how long the suspension would last or what would cause payments to be restored.
The Centers for Medicare and Medicaid Services said it had to put the payments on hold, after a US district court judge ruled the government arrived at the formula that guides the payouts in a flawed way.
The main insurers' lobby said it will need to see a quick resolution to avoid bigger price hikes next year - and a bigger tab for taxpayers who subsidize qualified customers in the program's web-based exchanges.
In February, U.S. District Judge James Browning in Albuquerque, N.M., ruled that the formula used by CMS to calculate payments in the risk-adjustment program was flawed and had not been adequately justified by federal regulators.
New Mexico Health Connections and Minuteman Health of MA, two small nonprofit insurers, filed lawsuits in 2016, contending that the Obama administration created an inaccurate formula that unfairly rewarded large insurers.
At stake is more than $10 billion in "risk adjustment" payments - a feature of the 2010 health law that requires insurers with healthier consumers to reimburse plans that end up with costlier, sicker patients, so the market balances out.
A federal court in MA upheld the same allocation formula in January.