Today the House of Representatives filed an amicus brief, objecting to the proposed settlement in the risk corridor litigation. Here is their introduction.
The law is clear that insurance companies operating on the health exchanges established pursuant to the Patient Protection and Affordable Care Act have no right to government handouts in excess of incoming funds under the Act’s risk corridors program. This is because the program was intended to be budget-neutral and self-funding – i.e., outgoing payments would be covered by incoming payments – and Congress has confirmed this intent, not once but twice, through annual appropriations legislation. The Constitution provides in unambiguous terms that “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law,” U.S. Const. art. I, § 9, cl. 7, and Congress has repeatedly exercised its constitutional authority to bar the payments at issue here.
The Department of Justice (“DOJ”) knows that insurers have no right to excess payments. In later-filed cases brought by other insurers seeking excess payments, DOJ moved to dismiss for failure to state a claim on the ground that the Department of Health and Human Services (“HHS”) has no obligation to make risk corridors payments in excess of program receipts. But DOJ has inexplicably failed to apprise this Court of those arguments and of the controlling precedents that mandate dismissal of Plaintiff Health Republic Insurance Company’s complaint.2 HHS, for its part, is apparently bent on paying insurers despite the absence of any legal obligation to do so. Allegedly in light of a non-existent “litigation risk,” HHS recently took the extraordinary step of urging insurers to enter into settlement agreements with the United States in order to receive payment on their meritless claims. In other words, HHS is trying to force the U.S. Treasury to disburse billions of dollars of taxpayer funds to insurance companies even though DOJ has convincingly demonstrated that HHS has no legal obligation (and no legal right) to pay these sums. The House strongly disagrees with this scheme to subvert Congressional intent by engineering a massive giveaway of taxpayer money.
Particularly in light of Plaintiff’s recent motion for class certification in this case, DOJ’s troubling failure to raise these arguments here should not deprive this Court of the opportunity to consider these compelling grounds for dismissal of Plaintiff’s claims, so as to resolve this case in a manner that is consistent with binding precedent and avoids the unnecessary expenditure of judicial resources.
I will write more about this case in due time.
Update: The House writes that in all other cases, DOJ has moved to dismiss for failure to state a claim. However, in the instant case–brought as a proposed class action–they did not seek to dismiss for failure to state a claim. They’ve only raised jurisdictional arguments:
Starting in May 2016, other QHPs began to file suits “pursuing the same risk corridors payments,” Pl. Health Rep. Ins. Co.’s Mot. to Appoint Quinn Emanuel Urquhart & Sullivan, LLP as Interim Class Counsel at 5 (ECF No. 15), including at least seven other cases in this Court pending before other Judges.2 All of the plaintiffs in these later-filed cases– like Plaintiff in this case – allege that they are entitled to risk corridors payments due to a “Statutory and Regulatory Mandate to Make Payments.”3 In each of the four later-filed risk corridors cases in which a response from the United States has been submitted, DOJ has moved to dismiss, making the same jurisdictional arguments it made here. DOJ also argues persuasively in those cases, however, that the plaintiff-insurers have failed to state a claim, because HHS has no legal obligation to make the payments at issue . . . .
The House sought leave to file this amicus curiae brief, for the purpose of apprising the Court of DOJ’s meritorious argument in the later-filed cases that the QHPs cannot state a statutory claim for risk corridors payments in excess of program receipts – an argument that applies with equal force here.