By Scott J. Bradley, J.D.
The Court of Federal Claims certified a class of insurers seeking cost-sharing reduction (CSR) payments to which they claim to be entitled. Despite the federal government’s opposition to the class-action form, the court determined that the insurers had established the necessary elements for certification, and defined the class of those who did not receive a timely CSR payment (Common Ground Healthcare Cooperative v. U.S., April 17, 2018, Sweeney, M.).
The Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) established of health insurance exchanges to facilitate the purchase of qualified health plans (QHPs) from private insurers. The exchange had opportunities for benefits and risks for insurers—for example, a new market of uninsured individuals meant insurers would need to price health plans without fully knowing what the insurance needs of the newly insured would be, and making it difficult to accurately reflect the plans’ associated medical costs. To mitigate the risk faced by insurers, the ACA included three premium stabilization programs, one of which was the CSR payment. As set forth in sec. 1402 of the ACA, insurers offering QHPs are required to reduce eligible individuals’ cost-sharing obligations—including those for copayments, deducitibles, and coinsurance—by specified amounts. Thereafter, the HHS and/or Treasury Secretary must reimburse insurers for the CSRs they made, with that payment amount based on information insurers provide to HHS.
In 2014, the government began making CSR payments to insurers; in October 2017, however, the government terminated the payments, stating that Congress had not appropriated any funds for that purpose (see Trump terminates CSR payments, October 18, 2017). Insurers were still required by statute to reduce eligible individuals’ cost-sharing obligations, and they filed suit in the Court of Federal Claims seeking repayment of the CSRs made.
The federal court determined that consolidating insurers’ CSR claims would be more cumbersome than a class action, which was shown to be superior to other methods of resolving the claims. For the purposes of this action, the class is defined as: all persons or entities offering QHPs under the ACA in the 2017 or 2018 benefit year, and who made CSRs for eligible insureds pursuant to Section 1402 of the ACA, but did not receive a "timely and periodic" payment from the government of an amount "equal to the value of the reductions" provided to its insureds.
The case is No. 17-877C.
Attorneys: Stephen Andrew Swedlow (Quinn Emanuel Urquhart & Sullivan, LLP) for Common Ground Healthcare Cooperative. Marcus Scott Sacks, U.S. Department of Justice, for the United States of America.
Companies: Common Ground Healthcare Cooperative; United States of America
Cases: CaseDecisions NewsFeed AgencyNews CostSharingNews GCNNews HealthInsuranceExchangeNews InsurerNews FedTracker HealthCare CtFedClaimsNews
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