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Insurers who claim losses under the Risk Corridors program have a right to payment under § 1342 of the program, 42 U.S.C.S. § 18062, and a damages remedy for the unpaid amounts. Section 1342 of the Patient Protection and Affordable Care Act established a money-mandating obligation. Congress did not repeal this obligation. Insurers may sue the government for damages in the United States Court of Federal Claims.
The Patient Protection and Affordable Care Act established online exchanges where insurers could sell their healthcare plans. The now-expired “Risk Corridors” program aimed to limit the plans' profits and losses during the exchanges' first three years (2014 through 2016). Section 1342 set out a formula for computing a plan's gains or losses at the end of each year, providing that eligible profitable plans “shall pay” the Secretary of the Department of Health and Human Services ("HHS"), while the Secretary “shall pay” eligible unprofitable plans. The Act neither appropriated funds for these yearly payments nor limited the amounts that the Government might pay. Nor was the program required to be budget neutral. Each year, the Government owed more money to unprofitable insurers than profitable insurers owed to the Government, resulting in a total deficit of more than $12 billion. And at the end of each year, the appropriations bills for the Centers for Medicare and Medicaid Services ("CMS") included a rider preventing CMS from using the funds for Risk Corridors payments. Petitioners, four health-insurance companies that claim losses under the program, sued the Federal Government for damages in the Court of Federal Claims. Invoking the Tucker Act, they alleged that §1342 obligated the Government to pay the full amount of their losses as calculated by the statutory formula and sought a money judgment for the unpaid sums owed. Only one petitioner prevailed in the trial courts, and the Federal Circuit ruled for the Government in each appeal, holding that §1342 had initially created a Government obligation to pay the full amounts, but that the subsequent appropriations riders impliedly “repealed or suspended” that obligation. Certiorari was granted.
The Court held that the insurers who claimed losses under 42 U.S.C.S. § 18062 had a right to payment and a damages remedy for the unpaid amounts. According to the Court, §1342, 124 Stat. 211, 42 U. S. C. §18062 created a government obligation to pay insurers the full amount set out in the statute's formula as it imposed a legal duty on the United States that matured into a legal liability through the insurers' participation in the healthcare exchanges, and the statute's plain terms created an obligation neither contingent on nor limited by the availability of appropriations. The Court held that the Congress had not impliedly repealed the obligations through appropriation riders as they did not include any words indicating any purpose other than disbursing a sum of money for the fiscal years. Moreover, the Court held that the insurers properly relied on the Tucker Act to sue for damages as § 18062 mandated compensation for damages and neither Tucker Act exception applied.