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Court of Federal Claims Grants Summary Judgment on Affordable Care Act "CSR" Litigation

Sep.05.2018

In Montana Health Co-Op v. U.S. (September 4, 2018), an important decision likely to reverberate throughout the health insurance industry, the U.S. Court of Federal Claims granted summary judgment in favor of C&M client Montana Health in a lawsuit seeking to recover "cost-sharing reduction" (CSR) payments pursuant to §1402 of the Affordable Care Act, deciding on the merits that: (i) Section 1402 of the ACA is money-mandating, (ii) Montana Health is entitled to full payments owed to it under the statutory formula set forth in the ACA, and (iii) the federal government has a statutory obligation to provide Montana Health with the CSR payments notwithstanding the purported lack of appropriations to fund such payments. The Court agreed with Montana Health that the obligation to make payment under a money-mandating statute is distinct from the appropriation used to fund it, and that the lack of an appropriation merely restricts the Government’s agents (here, HHS), but does not negate the United States’ statutory payment obligation. The Montana Health decision is a significant decision in COFC money-mandating statute jurisprudence.

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Stephen J. McBrady
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Daniel W. Wolff
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Charles Baek
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Sharmistha Das
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