Maine Community Health Options v. United States
133 Fed. Cl. 1
| Fed. Cl. | 2017Background
- Maine Community Health Options (CHO), a CMS-approved issuer of qualified health plans, sued the United States claiming ~ $23 million owed under the ACA's Risk Corridors Program (RCP) for 2014–2015.
- Section 1342 of the ACA (the RCP) requires HHS to make ‘‘payments out’’ to plans whose allowable costs exceed target amounts and to collect ‘‘payments in’’ from plans below targets; the statute uses mandatory language ("shall pay") but is silent on funding sources.
- HHS regulations and statements variously acknowledged both a statutory duty to pay and an intent to implement the RCP in a budget-neutral manner; HHS pro rated 2014 payments when collections were insufficient.
- After GAO identified that available funding for RCP payments would be (1) user fees (RCP collections) and (2) CMS Program Management appropriations (if re-enacted), Congress enacted appropriations riders in Dec. 2014 and Dec. 2015 barring the use of CMS Program Management funds for RCP payments.
- Procedurally: CHO moved for summary judgment; government sought dismissal for failure to state a claim. The Court of Federal Claims held the RCP is a money-mandating statute but concluded Congress, via timely appropriations riders, barred use of public funds beyond user fees, and dismissed CHO’s claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §1342 creates an enforceable, uncapped obligation by the government to make RCP "payments out" | "Shall pay" is mandatory; once plan-year costs exceed targets, HHS must pay the statutory amounts regardless of funding source | Any payment obligation is limited to amounts collected from participating issuers (budget-neutral); appropriations riders barred use of other public funds | Held for Defendant: Congress timely limited funding; obligation capped to user-fee collections for FY2015–FY2016 (payments barred from CMS Program Management funds) |
| Whether subsequent appropriations riders can negate or limit an earlier statutory payment obligation | Riders cannot retroactively eliminate a statutory entitlement; payment obligation vested before riders | Congress can suspend or limit prior statutory obligations by clear appropriations language; riders were enacted before RCP obligations matured for 2014 and 2015 | Held for Defendant: Supreme Court and Federal Circuit precedent permit Congress to alter funding for statutory obligations via timely appropriations language; riders clearly expressed intent to bar funds |
| Whether HHS could use other federal funds (e.g., Medicare trust funds or Judgment Fund) to satisfy shortfalls | Other federal sources (including Judgment Fund) could be used; source immaterial once entitlement fixed | Appropriations and statute restrict transfers; only user fees remained available and riders barred CMS operating funds | Held for Defendant: Riders left only user fees available; court will not order Treasury payments beyond user fees |
| Whether APA/agency interpretations or HHS statements create enforceable obligations beyond appropriations limits | HHS statements that it would make full payments support plaintiff's claim | Agency statements cannot override clear congressional appropriation limits | Held for Defendant: Agency statements do not trump clear congressional appropriations restrictions |
Key Cases Cited
- United States v. Mitchell, 109 U.S. 146 (1883) (Congress can alter earlier statutory payment expectations through subsequent appropriations expressing a changed policy)
- United States v. Dickerson, 310 U.S. 554 (1940) (Supreme Court enforces congressional intent expressed in an appropriations enactment that limits earlier statutory authorization)
- United States v. Will, 449 U.S. 200 (1980) (Congress may alter payment entitlements by timely appropriations when intent is clear)
- Langston v. United States, 118 U.S. 389 (1886) (an earlier, specific salary entitlement is not abrogated by later nonspecific appropriations absent clear intent)
- Highland Falls-Fort Montgomery Cent. Sch. Dist. v. United States, 48 F.3d 1166 (Fed. Cir. 1995) (appropriations language can explicitly cap programmatic benefits and control agency payments)
- Star-Glo Assocs., L.P. v. United States, 414 F.3d 1349 (Fed. Cir. 2005) (Congressional funding caps in appropriations can limit otherwise-eligible benefit payments)
- Prairie County v. United States, 782 F.3d 685 (Fed. Cir. 2015) (distinguishes contract claims from benefits programs; courts give effect to clear congressional limits in appropriations)
- Slattery v. United States, 635 F.3d 1298 (Fed. Cir. 2011) (contextual authority on jurisdiction and funding of federal entities; not controlling for appropriations-limitation issues)