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LITIGATION NOTE: Crowell & Moring Succeeds in First Affordable Care Act Cost Sharing Reduction Case

Montana Health Co-Op secures summary judgment at U.S. Court of Federal Claims

Washington – September 7, 2018: The U.S. Court of Federal Claims ruled earlier this week in favor of Montana Health Co-Op, granting its cross motion for summary judgment and denying the U.S. government’s motion to dismiss in the first Cost-Sharing Reduction (CSR) case under the Affordable Care Act (ACA). CSR is a provision under the ACA which offers a discount to qualifying individuals to lower the cost of deductibles, copayments, and coinsurance through tax credits.

After making CSR payments from 2014 to 2017, the U.S. Department of Health and Human Services stopped making CSR payments in October 2017, asserting that it lacked a valid appropriation to make such payments, based upon newly issued legal guidance from the Department of Justice. Montana Health and other issuers sued the U.S. government, seeking the CSR payments owed for the fourth quarter of 2017. The Justice Department moved to dismiss the suit, and Montana Health cross-moved for summary judgment.

The Court agreed on Tuesday with Montana Health that the intent of Section 1402 of the ACA should be read from the plain language in the statute requiring payment, and that a mere lack of appropriations did not negate the government’s payment obligation.

“This decision is an important win for Montana Health and the healthcare industry, generally, which has a significant stake in the CSR cases,” said Crowell & Moring partner Stephen J. McBrady, who served as lead counsel to Montana Health Co-Op. 

The Crowell & Moring litigation team also included partners A. Xavier Baker and Daniel W. Wolff; counsel Skye Mathieson; and associates Charles Baek, Sharmistha Das, Christopher Pinto, and Monica DiFonzo Sterling.

The case is Montana Health Co-Op v. The United States of America. A copy of the decision is available here.

About Crowell & Moring’s Government Contracts Group

For nearly 40 years, Crowell & Moring's nationally recognized Government Contracts Group has set the standard for effective legal guidance in this highly complex arena. With approximately 60 attorneys, it is one of the largest and most reputable government contracts practices in the United States and worldwide. The group's experience covers virtually every aspect of the increasingly complex and heavily regulated government contracts and grants process, from entering the government marketplace and bidding on public contracts to complying with complex regulatory regimes and performing contracts, litigating disputes, and handling terminations. Follow the group on Twitter at @GovConCrowell.

About Crowell & Moring’s Health Care Group

Crowell & Moring's nationally recognized Health Care Group provides a comprehensive range of litigation, investigation, regulatory compliance, fraud and abuse, transactions and counseling services to health care clients nationwide. Our clients include payers (including the top 10 national health insurers), hospitals and hospital systems, medical groups and medical group managers, pharmaceutical companies, pharmacy benefit managers, academic medical centers, government contractors, as well as established and start-up medical device and biotech companies. Our clients rely on Crowell & Moring's experience and interdisciplinary approach to provide strategic solutions to their complex legal challenges. The group publishes the C&M Health Law Blog, which includes analysis, commentary, and the latest developments in health care law and policy. Follow the group on Twitter at @CMHealthCareLaw.

About Crowell & Moring LLP 

Crowell & Moring LLP is an international law firm with more than 500 lawyers representing clients in litigation and arbitration, regulatory, and transactional matters. The firm is internationally recognized for its representation of Fortune 500 companies in high-stakes litigation, as well as its ongoing commitment to pro bono service and diversity. The firm has offices in Washington, D.C., New York, Los Angeles, San Francisco, Orange County, London, and Brussels.


An Pham
Senior Communications Manager