Health Republic Insurance Company v. United States
129 Fed. Cl. 757
Fed. Cl.2017Background
- The ACA created a temporary three‑year (2014–2016) risk corridors program (42 U.S.C. § 18062) to stabilize premiums; HHS/CMS promulgated implementing regulations and annual notices describing procedures and schedules.
- The statute and regulation use mandatory language ("shall pay" / "will pay") but do not specify an express deadline for HHS to make payments; CMS rules and guidance, and prior programs, described annual calculation/payment processes.
- Congress included appropriations riders in FY2015 and FY2016 appropriations banning use of certain CMS program management funds for risk‑corridors payments, and debated budget neutrality for the program.
- Health Republic submitted data and HHS determined it was owed $7.9M for 2014 and $13.0M for 2015, but HHS prorated 2014 payments (paid ~12.6%) and announced 2015 collections would first go toward remaining 2014 shortfalls. Plaintiff sued in the Court of Federal Claims seeking unpaid risk‑corridors payments and other relief.
- Government moved to dismiss for lack of subject matter jurisdiction (Tucker Act/presently due money, ripeness) and for lack of jurisdiction over non‑monetary and consequential remedies; court granted in part and denied in part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §1342 / 45 C.F.R. §153.510 are money‑mandating and confer Tucker Act jurisdiction | §1342 and the regulation use mandatory language ("shall pay"/"will pay") and therefore mandate money payments | Agrees the provisions are money‑mandating but contends Tucker Act jurisdiction only extends to "presently due" money and here amounts may not be presently due | Held: statute/regulation are money‑mandating; court has jurisdiction to hear claim for unpaid risk‑corridors payments (Tucker Act applies) |
| Ripeness / whether HHS must make annual payments (so damages are presently due) | Congress intended annual payments: separate per‑year calculations, ACA directed program be based on Medicare Part D program (which pays annually), interplay with reinsurance/risk adjustment, and CMS rules/notice schedule support annual payments | No explicit statutory deadline; HHS has discretion to adopt payment framework, and appropriations riders show Congress limited funding — payments might be deferred until program end or until funds are available, so claim is premature | Held: reading the statute in context and agency rules/administrative practice, Congress intended annual payments; claim for 2014 and 2015 unpaid amounts is ripe |
| Deference to HHS/CMS interpretation of timing and funding | Plaintiff: plain text and statutory scheme require annual payments; agency guidance confirms annual schedule | Gov: agency discretion and appropriations language support pro rata/deferral; agency interpretation would control if statute ambiguous | Held: even if statute ambiguous, agency consistently construed regs and implemented annual schedule; the court treats agency construction as permissible but nevertheless found statute + context require annual payments |
| Scope of relief available in this court | Plaintiff sought unpaid payments plus consequential/special damages, declaratory/injunctive relief, prejudgment/postjudgment interest | Defendant: Court of Federal Claims lacks jurisdiction for consequential damages, equitable relief (except limited ancillary relief), and interest absent express waiver | Held: Court has jurisdiction only for the unpaid risk‑corridors money damages; lacks jurisdiction over consequential/special damages, declaratory/injunctive relief, prejudgment interest, and postjudgment interest (no statute authorizing interest here) |
Key Cases Cited
- United States v. King, 395 U.S. 1 (Supreme Court) (distinguishing presently due money damages and equitable prerequisites)
- Jan’s Helicopter Serv., Inc. v. FAA, 525 F.3d 1299 (Fed. Cir.) (Tucker Act jurisdiction where money‑mandating source is asserted and plaintiff plausibly in class entitled to recover)
- White Mountain Apache Tribe v. United States, 537 U.S. 465 (Supreme Court) (statute reasonably read as mandating recovery suffices for Tucker Act)
- Testan v. United States, 424 U.S. 392 (Supreme Court) (Tucker Act is jurisdictional only; substantive right must come from another source)
- Loveladies Harbor, Inc. v. United States, 27 F.3d 1545 (Fed. Cir.) (money‑mandating requirement for Tucker Act recovery)
- Abbott Laboratories v. Gardner, 387 U.S. 136 (Supreme Court) (ripeness doctrine for administrative decisions)
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (Supreme Court) (deference to reasonable agency statutory construction)
- Land of Lincoln Mutual Health Ins. Co. v. United States, 129 Fed. Cl. 81 (Fed. Cl.) (similar holding on risk‑corridors ripeness and annual payments)