Richard Pollock documents for the Daily Caller more financial problems linked to health insurance co-ops set up in connection with the Affordable Care Act.

Federal health officials are seeking to deny medical reimbursements to doctors and hospitals that have served patients insured by failed Obamacare health insurance co-ops, according to a Daily Caller News Foundation investigation.

Instead, the Centers for Medicare and Medicaid Services (CMS) are insisting it, not medical providers, has the first right to any remaining funds as 12 of the 24 co-ops go through the liquidation process.

A legal showdown is expected over who pays for the co-op debacle that to date has lost at least $1.4 billion in federal solvency loans. The failures have forced the cancellation of health insurance policies for at least 800,000 customers.

The confrontation now pits medical providers against CMS bureaucrats who claim the federal government should be first in line to get any leftover funds.

Senate Committee on Homeland Security and Government Affairs Chairman Sen. Ron Johnson told TheDCNF, “the co-ops do not have enough money to pay out their enrollees’ medical claims, much less to repay their loans to the taxpayers. Once again,” the Wisconsin Republican said, “American taxpayers will ultimately pay the price of another failure and broken promise of Obamacare.”

“This is more of the wreckage of Obamacare,” said Grace-Marie Turner, president of the Galen Institute and a critic of Obamacare, to TheDCNF. “People bought into it. Many thought, ‘well the federal government is backing these. What can possibly go wrong?’”