Two Judges Blast USA in Risk Corridors Appeal Dissents

Two judges on the full U.S. Court of Appeals for the Federal Circuit have blasted the United States of America for failing to make $12.3 billion in Affordable Care Act risk corridors program payments to health insurers, and their colleagues for failing to agree to review the insurers’ claims.

The full court today declined, in a 9-2 ruling, to take up a group of four appeals filed in connection with health insurers’ efforts to collect ACA risk corridors program subsidy payments from the U.S. Department of Health and Human Services (HHS).

(Related: Appeals Court Rejects Health Insurers’ Plea for Billions in Subsidy Money)

The court lists the case on its website as Moda Health Plan Inc. v. U.S. (Case Number 17-1994).

In June, a three-judge panel at the appeals court rejected insurers’ efforts to collect the ACA risk corridors program payments, by a 2-1 vote. The insurers asked all of the judges at the Federal Circuit appeals court to rehear the matter “en banc.”

Nine of the judges at the court rejected the insurers’ request for a rehearing without comment. Circuit Judge Pauline Newman, who was appointed to the court by President Ronald Reagan, and Circuit Judge Evan Wallach, who was appointed by President Barack Obama, both supported rehearing the matter, and each has written a dissent.

Newman writes in her dissent that the federal government made a statutory commitment to compensate the health insurers for their losses, then failed to provide the funds to make the payments.

“The insurers, who had performed their part of the bargain, were denied the promised compensation,” Newman writes. “My colleagues now ratify that denial. This is a question of the integrity of government… Our system of public-private partnership depends on trust in the government as a fair partner.”

Newman cites a portion of a brief filed on behalf of the health insurers by a trade group, America’s Health Insurance Plans (AHIP).

The appeals court’s 2-1 ruling against the health insurers “‘now makes it a risky business to rely upon the government’s assurances,’” according to the passage in the AHIP brief quoted by Newman. “‘That deals a crippling blow to health insurance providers’ business relationships with the government.’”

Wallach writes in his dissent that he believes the insurers have a case because Congress has never repealed the U.S. government’s risk corridors program payment obligations in a clear way.

“This case raises an exceptionally important issue regarding the government’s reliability as an honest broker,” Wallach writes. “To hold that the government can abrogate its obligation to pay through appropriations riders, after it has induced reliance on its promise to pay, severely undermines the government’s credibility as a reliable business partner.”