Friday, October 12, 2018

Court Awards $1.2 Million in Cost Sharing Reduction Payments to Montana Co-op


The United States Federal Court of Claims, which hears monetary claims against the United States, has determined that the federal government owes Montana Health Co-op $1.2 million in cost-sharing reduction payments established under the Affordable Care Act but not funded by Congress.

Article at Healthcare Dive.


Judge Elaine Kaplan, an Obama appointee to the bench, wrote the following in her opinion:

"The parties' cross-motions present a single, purely legal issue: whether the federal government had a statutory obligation to provide Montana Health with the cost-sharing reduction payments described in § 1402 of the ACA, notwithstanding the lack of appropriations to fund such payments. Montana Health contends that such an obligation was imposed by the plain language of § 1402. The government's central argument, on the other hand, is that Congress could not have intended to impose such an obligation because, while it made arrangements to fund the premium tax credits of § 1401 through a permanent appropriation, it has never appropriated money to fund § 1402 payments, whether on a permanent or annual basis."

Kaplan's opinion does not contradict U.S. District Court Judge Rosemary Collyer's 2016 decision that cost-sharing reduction payments without an appropriation from Congress are unconstitutional.  Instead her opinion relies on the obligation of the federal government under the Affordable Care Act as outlined in Section 1402 of the ACA.

Kaplan writes:

". . . the lack of a permanent funding mechanism suggests that when it enacted the ACA, Congress anticipated that the CSR payments it obligated the government to pay in § 1402 would ultimately be funded through the annual appropriations process. And, for the reasons set forth above, the Court cannot infer intent to vitiate the obligation imposed by § 1402 based solely on Congress's subsequent failure to make such appropriations."

The decision adds yet another dimension to the ongoing argument over repeal of the Affordable Care Act.  While the Trump Administration rightly stopped CSR payments, lacking an appropriation from Congress, Kaplan determined that such a move does not remove the underlying obligation of Congress to make such payments, appropriation or not.

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Court Awards $1.2 Million in Cost Sharing Reduction Payments to Montana Co-op

The United States Federal Court of Claims, which hears monetary claims against the United States, has determined that the federal governm...