The “Risk Corridors” Litigation: How Risky Should it Be To Do Business With the U.S. Government?

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Three consolidated cases now pending before the U.S. Supreme Court have the potential to re-set the relationship between the federal government and its private partners.  In the “risk corridors” litigation, health insurers that participated in marketplaces established by the Affordable Care Act (“ACA”) did so based on statutory assurances that they would be reimbursed for certain losses due to the riskier subscriber populations newly mandated by law.  This was the “risk corridors” program, which lasted from 2014-16.  After the insurers began issuing policies on the marketplaces, however, Congress passed appropriations riders that were aimed at blocking the Department of Health & Human Services from making the required risk reimbursement payments.  As a result, insurers collectively lost $12 billion during the three-year risk corridors period that was supposed to be, but never was, reimbursed.  Multiple lawsuits in the U.S. Court of Federal Claims resulted in mixed decisions, and the U.S. Court of Appeals for the Federal Circuit ruled that the Government was not bound to abide by the ACA’s “risk corridors” framework, but instead was free to de-fund it despite the insurers’ reliance.  The Supreme Court has granted certiorari, and is poised to decide the extent to which the Government has latitude – as one cert. petition put it – to “promise boldly and renege obscurely.”  The legal, monetary, and public policy implications of the litigation are substantial, and potentially transformative for government contractors.

Featuring:

Jason A. Levine, Partner, Commercial and Business Litigation, Vinson & Elkins LLP

 

 

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Event Transcript

Operator:  Welcome to The Federalist Society's Practice Group Podcast. The following podcast, hosted by The Federalist Society's Litigation Practice Group, was recorded on Thursday, July 18, 2019, during a live teleforum conference call held exclusively for Federalist Society members.     

 

Wesley Hodges:  Welcome to The Federalist Society's teleforum conference call. This afternoon's topic is on "The 'Risk Corridors' Litigation: How Risky Should it Be To Do Business With the U.S. Government?" My name is Wesley Hodges, and I am the Associate Director of Practice Groups at The Federalist Society.

 

      As always, please note that all expressions of opinion are those of the expert on today's call.

 

      Today we are very fortunate to have with us Mr. Jason A. Levine, who is a Partner for Commercial and Business Litigation at Vinson & Elkins LLP in Washington D.C. After our speaker gives his remarks today, we will move to an audience Q&A, so please keep in mind what questions you have for this topic or for Jason. Thank you very much for sharing with us today. Jason, the floor is yours.

 

Jason A. Levine:  Thank you very much. Hello everyone, and thanks for joining us on the teleforum today. As mentioned, my name is Jason Levine. I'm a litigation partner and trial lawyer in the D.C. Office of Vinson & Elkins. And I specialize in high stakes business disputes and also claims against the federal government. More importantly, just by way of disclaimer, I represent one of the health insurance companies in one of the many lawsuits filed against the U.S. government involving money due under the "risk corridors" program of the ACA, not one of the parties that's in the cases pending before the Supreme Court which I'll be talking about.

 

And with respect to those, the Court just granted certiorari in three other “risk corridors” cases, the ones that were essentially filed first in the Court of Federal Claims and got up the appeal chain, filed by Moda Health Plan, Land of Lincoln Insurance, and Maine Community Health Options. Now, these cases have the potential to determine whether and to what extent the federal government can essentially renege on statutory promises that have been made to private entities as inducements to do business with the government. So at stake in concrete terms is approximately $12 billion in payments that the government had statutorily committed to pay to health insurers under the "risk corridors" program.

 

And secondarily, I would submit that also at stake is, frankly, the credibility of the government as a business partner for private entities. And given the government's reliance on the private sector to help it with the performance of many erstwhile public sector tasks, this would seem to be an issue of great importance. And it is also one that can be, potentially, ideologically complicated, which I'll try to address in my remarks.

 

So I'll first provide some background about the "risk corridors" litigation since not everyone is going to be familiar with it. I'll discuss the litigation general terms. I'll turn to the implications of the cases and some prognostication about the Supreme Court's potential upcoming decision. The case, by the way, looks like it will be argued in December, presumably with decision to come before the term ends next year.

 

So first, by way of background, I think we all know, Congress enacted the ACA in 2010, ostensibly, at least, to expand access to healthcare and provide health insurance to previously uninsured individuals. And central to the ACA was a network of what are called health benefit exchanges where the health insurers would offer qualified health plans, also known as QHPs, to purchasers who are eligible in those marketplaces. And to incentivize the insurer to participate in the marketplaces, Congress created three what were called premium stabilization programs. The idea being, essentially, to offset risk for the insurers entering into this brave new world of Obamacare.

 

One of these was the "risk corridors" program which required the government and the insurers offering QHPs to share in profits or losses that exceeded certain limits in the years 2014, ‘15, and ‘16, the first three years of the ACA's implementation. One section of the ACA, Section 1342, requires  that the Department of Health and Human Services reimburse issuers of these health plans for losses sustained in the marketplaces during any of those three years while at the same time requiring those issuers the profit during that timeframe to pay a percentage of that profit in to HHS. There's no requirement in the program on its face of budget neutrality. And the program was designed to help the insurers adapt to and deal with short-term financial challenges while they worked to set premiums for primarily previously uninsured individuals, hopefully to keep premiums down. And federal regulations that implemented this section of the ACA repeat the mandatory nature of the government's obligations to the insurers and HHS, through the Centers for Medicare and Medicaid Services, CMS, also recognized that the "risk corridors" program was not required to be budget-neutral.

 

So against that backdrop, beginning in 2013, the government began to extend offers for a contract that insurers could accept by selling these QHPs in their states' respective marketplaces. And in exchange, the government promised, as the ACA required and as the implementing regulations reiterated, that it would make full complete “risk corridors” payments to insurers who had losses from 2014 to 2016. And so by accepting those offers, the insurers also agreed to assume some obligations mandated by the government, including compliance with various rules of conduct and testing for each of the transactions they plan to implement.

 

The first adverse step for the insurers then came in November of 2013 when HHS announced a transitional policy, as it called it, to minimize plan terminations which decreed that health plans in individual and small group markets, contrary to expectations, would not be considered non-compliant with the ACA for 2014. Insurers had expected that they would be deemed non-compliant, and this had impacts on the risk pool for the QHPs. They had anticipated that that risk pool would include millions of people who had what they thought would be deemed non-compliant plans. So the transition policy removed those individuals from the risk pool, and it left behind a population that was less healthy and more expensive to insure than the issuers had reason to expect when they agreed to participate in the program. And in response, HHS, again, reassured the insurance companies that the "risk corridors" program was there to help offset unexpected losses. That transitional policy wound up outliving the "risk corridors" program, and HHS, meanwhile, through pronouncements continued to recognize it had a commitment to make full payments to insurers.

 

So the next phase of this, then, against that background, is the effort by Congress to restrict appropriations for the "risk corridors" program which is what leads to the litigation. Despite the mandatory terms of the ACA and the commitments of HHS, Congress in December of 2014 passed an appropriations rider that limited the pool of available “risk corridors” funds to money paid into the program by insurers and it blocked CMS from using other appropriations like those for program management to reimburse insurers for losses. Congress at the same time, though, did not amend or repeal the pertinent section of the ACA, Section 1342, and the appropriations rider did not amend the government's “risk corridors” responsibilities or refer to them specifically.

 

And then Congress included the same funding restriction for the 2016 and 2017 appropriations riders. So as a result of Congress's action, after several contradictory public pronouncements and much internal machination, HHS wound up paying insurers a very small fraction of the money that they would otherwise had been owed under the "risk corridors" program. For the program year 2015, for example, HHS only paid out 1.5 percent of the money that was actually due under the program. And over the three-year life of the "risk corridors" program, the government failed to pay insurers more than $12 billion that was due to them in the aggregate, while at the same time, interestingly, acknowledging that it had an obligation under the ACA to ultimately make a full payment. That, of course, has never happened to date, and the government's position in the litigation is that it should not happen.

 

So as a result of these big shortfalls, multiple insurers were forced to curtail and limit their offerings. There were insurers that went out of business, they withdrew plans. Others had to raise premiums to very high levels. And, as a result, now there are even marketplaces that have either no participating insurers or basically no competition in marketplaces for people seeking health insurance. So this leads to the "risk corridors" litigation. Reacting to the government's failure to reimburse them, literally dozens of insurance companies, and also a proposed class-action, wound up filing suits against the government in a court of federal claims to recover the money that was due under Section 1342 of the ACA.

 

And just summarizing very briefly, after conflicting decisions in several of these cases, which were not consolidated before a single judge, different judges in the court had different numbers of these cases, and as you might expect, reached different conclusions. And after, ultimately, the cases that were not appealed quickly were stayed, the U.S. Court of Appeals for the Federal Circuit wound up hearing appeals in three of the cases: the ones brought by Moda Health Plan, which had won in the lower court and actually won summary judgment in favor of the insurer in the lower court; on behalf of Land of Lincoln Mutual Health Insurance Company, which had lost in the lower court; and also Blue Cross Blue Shield of North Carolina, which basically stipulated to an adverse judgment in the trial court in order to appeal immediately.

 

And then after argument, the panel vote was 2-1 from the Federal Circuit in the Moda case, reversing and ruling in favor of the government. That's ultimately the outcome of the appeals before the Federal Circuit: a decision in favor of the government that the money need not be paid. In terms of the decision, initially it appeared from reading it that it might be promising for the insurers because the Court first held that Section 1342 of the ACA did in fact obligate the government to pay the full amount of the “risk corridors” payments that were due and did not contemplate the very small payments that HHS actually made. In fact, the Court concluded that Section 1342, and I use their quote, "unambiguously mandatory and requires full payment regardless of any assessments of budget neutrality and despite any supposed absence of budgetary authority in the statute." But then things go downhill for the insurers because the majority then went on to hold that the riders and the appropriations bills repealed or suspended the government's obligation to make any “risk corridors” payments in an amount that exceeded the sums that were paid into the program by those few insurers that happened to make a profit.

 

The majority concluded that the riders were adequate to express congressional intent to suspend payments through language that barred specific sources of funds. In particular, the majority recognized that Congress could later reinstate an obligation to make full “risk corridors” payments even after the program had concluded, although Congress has not done so and has shown no propensity to do so.  The majority also decided the appropriations riders were not an improper repeal by implication of the payment obligation but only suspended it, and this was based on expressed language that need not be inferred. Again, the suspension would seem to be indefinite since Congress has never reversed itself on this issue to date.

 

The majority also rejected a claim by the insurers for a breach of an implied contract and also for a taking. In describing the "risk corridors" program as an incentive program, the majority of the Federal Circuit panel found that there was not a traditional quid pro quo between the insurers and the government nor any statement by the government that showed an intent to form a contract, which is interesting. And the majority opined that the legislation and the regulation themselves could not establish governmental intent to bind itself in a contract.

 

There's one dissent filed by Judge Newman, a very senior judge on that court, that may be important in the Supreme Court's review. She found that the government cannot eliminate its obligations by just restricting the sources of funds that can be used to meet them. In her view, the appropriations riders were improper repeals by implication because they don't actually express an intent to repeal Section 1342 but had that practical effect. And merely cutting off access to sources of funds without actually enacting a repeal, she found, is legally improper based on a series of historic precedents. She also noted that Senator Rubio, in particular, had proposed a bill to require budget neutrality in the "risk corridors" program in 2014, but it was not enacted by Congress, showing legislative intent not to require budget neutrality.

 

And Judge Newman also noted that the appropriations riders don't state that the government would not or need not meet its statutory commitments which even the panel of majority recognized were clear. And finally, she explained, again, based on historical precedent that the government can't retroactively affect or renege on an obligation already incurred, particularly since it had already induced reliance and participation in the program by health insurers. As for the contract claim, Judge Newman found that it, in her view, had sufficient record support and should not be dismissed. And she ended the dissent by observing that the majority decision "undermines the reliability of dealings with the government" and calls into question its "reputation as a fair partner."

 

Proceeding onward in the case, the Federal Circuit then denied petitions for re-hearing en banc, again with some strong dissents from Judge Newman and also Judge Wallach that focused on the credibility of the government as a business partner. And now the Supreme Court has granted certiorari to the three health insurers that I mentioned who went to the next step, who were supported by a wide variety of amicus briefs from other insurance companies, trade associations, and state governments.

 

And their key arguments for certiorari were that first, the mere legislative history cited by the Federal Circuit majority was not adequate to repeal the government's underlying payment obligations as required by very substantial precedent; two, that the divided Federal Circuit and its application of Supreme Court cases underscored the need for review; three, that the cases were presenting exceptionally important questions of federal law with a substantial financial impact on a very important industry, and also further impacts downstream in other areas where the government seeks to partner with private entities; and fourth, that the Federal Circuit decision, if it stood, would allow legislators to use the appropriations process as an end run around what should be more substantive funding and policy debates using really pretty obscure appropriations riders instead of actually legislating about the "risk corridors" program.

 

And so poise as it is to go to the Supreme Court, what then, really, is the importance of the "risk corridors" litigation? I have a few observations on that. And the insurer's Supreme Court cert petitions really very eloquently explained why the litigation is important because it involves not only the government's effort to avoid a $12 billion financial commitment but also the larger issue of the government's credibility as a business or a contracting partner. So if not reversed, the Federal Circuit's panel decision does seem to provide a framework for the government to make fairly feckless promises that induce reliance by private parties and then pull out of those promises with really no consequences. And even those who disapprove of the ACA, and by extension the "risk corridors" program, on policy grounds or ideological grounds, I think I'd certainly question the state of affairs because it effectively releases the government from commitments on essentially an unreviewable political whim.

 

In reflecting the importance of the issues, as I mentioned, there were many amicus briefs filed in support of the health insurers. Those included 18 states plus the District of Colombia, the U.S. Chamber of Commerce, the America's Health Insurance Plans Trade Association, the National Association of Insurance Commissioners, the Association for Community Affiliated Plans, a group of economists, and also several other large health insurance companies.

 

And as the $12 billion in question would suggest, the impact of the decision on insurers and their markets is very substantial. Not only did the government initially recognize the risks in the marketplaces, it then adopted that transitional policy that I mentioned earlier, which increased the risks for insurers and then backed out of its promise to reimburse them. As of 2016, as a result, 18 out of 24 health cooperatives that had been participating in the exchanges had gone out of business, which stripped about a million people from their health insurance plans. And other insurances had withdrawn from marketplaces as well or have had to raise premiums to very high levels which is obviously negative for consumers.

 

And the fundamental issue of the government's credibility, it seems to me, would extend to other areas of public/private partnerships as well. If the government can unilaterally induce reliance by private parties and then cancel its financial commitments for political reasons, one would think that it will find fewer willing and capable partners and will perhaps have created incentives for partners to demand very high-risk premiums. And the impact on the quality and character of potential partners with the government could be significant.

 

And, in addition, the Federal Circuit's endorsement of the government's repeal through fairly obscure riders and appropriations bills, one might argue, is inconsistent with our democratic principles. If the government is going to make very bold, public promises through legislation like the ACA, which again we can disagree with on public policy grounds, one could argue that it should be required to revise or withdraw those promises with equal fanfare so the public can be well informed and officials can be held accountable for their decisions politically. Otherwise, it seems we can possibly run the risk of hampering the government's credibility as a governing institution as well as a business partner. Again, I recognize this gets ideologically complicated, but it seems to me that there are fundamental issues of the government's credibility and functioning here that might transcend politics.

 

And so last, in terms of the legal outcome that's likely -- of course, the merits briefs have not been filed yet. They will not be, probably, until the very end of August in the first instance for the opening brief and then thereafter. But as a legal matter, I think the insurers have the better of the argument based on my work on the matter and based on the cert petition on the oppositions for a few reasons. Congress cannot repeal a statutory obligation by implication; that's well established. They can only repeal a substantive law through an appropriations measure if it does so clearly and in expressed text. But there really is no such language here. The appropriations riders seem, at most, to address only where the money to pay for the obligation will come from, not whether the obligation itself remains payable. And, interestingly, even the Federal Circuit concluded that the obligation was a mandatory one.

 

The government, in its brief, at the cert stage at least and in the lower courts, has tended to resort to legislative context and history, but there really isn't much, if any, legislative history. There are a few sentences from one congressman's remarks about one of the three riders, and that’s about it. And, interestingly, Congress, several times, considered and rejected bills that would've expressly repealed Section 1342 and made the "risk corridors" program budget neutral. So it considered and rejected the very idea that the government suggests should control here. And this leaves the government with an argument that Congress can eliminate a statutory obligation just by appropriating less money than is necessary to satisfy it.

 

There are Supreme Court cases that would prohibit that outcome, however, and the consequences here are a lot more extreme than even occurred in those cases, such as Langston and Will, to name a few, which had to do with payments to government personnel and whether they were adequate in keeping in with inflation and so forth. Here, you've got an absolute depravation of funding of a large program.

 

The government also advanced another argument which was that Section 1342 never actually imposed an obligation on it in the first place. But there was no Federal Circuit judge that adopted that rationale. And as for the ability of Congress to impose a bonding obligation being limited to the amount appropriated, there are court precedents to the contrary. There's U.S. v. Vulte case, there's the Belknap v. U.S. case, and the same is true for the Antideficiency Act which is another argument heading for the government. That Act does not defeat the obligation of the government. It, at most here, represents an argument that any governmental promise is voidable at basically the political whim of future appropriators, which wouldn't even serve the government's own long-term interest in this situation if it were adopted and carried forward. So if government promises are illusory or voidable by future Congress's, one would think that the government will have a very hard time inducing the reliance of private parties to participate in programs like this in the future.

 

If the government's position had been applied to the "risk corridors" program in the first instance, for example, it's hard to imagine that any rational insurer would've relied on the promise of payments or would've agreed to sell policies in the marketplaces without some other more concrete and tangible inducement to do so since they are, after all, for-profit entities that have constituencies to serve.

 

So in this case and these cases involving the "risk corridors" program, the Supreme Court has an opportunity to address all of these issues and to, in my view, correct the Federal Circuit's decision, if not for the benefit of health insurers, then at least for the benefit of public trust in the government's operation. And I think it will be interesting to see how, or more accurately if, the government tries to substantively defend its actions in its opposition briefs on the merits rather than relying on legal technicalities which is really as much as it's done to date. But I think that no matter what arguments the government advances, it's fairly clear that the "risk corridors" litigation shows that it, indeed, can be a pretty risky business partner. And I think with that, I will see if there are any questions.

 

Wesley Hodges:  Fantastic. Well, thank you so much for those remarks, Jason. Let's go ahead and go to our first caller.  

 

Bob Popper:  Hi, this is Bob Popper from Judicial Watch. I hear your arguments about expressing implied repeal, although they seem to me to be oddly beside the point and let me explain what I mean. Suppose that repeal had been expressed and beyond question, would it be your view in that case there, there is no recourse whatsoever for the insurers?

 

Jason A. Levine:  Well, it's not the case, of course, that there had been an expressed and clear repeal based on everything that I've seen and what the courts have really analyzed, but I believe that if there had been a proper repeal, then, yes, in all likelihood the insurers would have no recourse.

 

Bob Popper:  So you would still have the problems with the government being an inadequate business partner?

 

Jason A. Levine:  Yes, you would. You would have had the government, however, have to go through the much more politically difficult and public process of repealing the statute or at least the provision. And who knows whether that would've actually happened. But, yes, if there had been a repeal that was legally adequate, yes, you would still have this problem.

 

Wesley Hodges:  Very good. Here comes our next caller.

 

Caller 2:  Thanks, Jason. I have -- you've done great work on this case. I have a quick question. Was it Dyk who wrote the majority opinion in the Federal Circuit? And a question as to which judges in the Court of Federal Claims were involved in the lower court decisions?

 

Jason A. Levine:  It was not Dyk, and I have to confess, as foolish as it might sound, but off the top of my head, I don't recall who wrote the majority decision. There were various judges, though, in the Court of Federal Claims. One that comes to mind is Wheeler who wrote one of the lower court decisions. But, again, there were -- almost, literally every judge on that court had at least one of these cases.

 

Caller 2:  No, no. It's just -- I guess I'm asking the broader question about something to bring to everyone's attention. It's just the composition of the Federal Circuit and the importance of the Federal Circuit.  

 

Jason A. Levine:  Well, I would certainly say that this case highlights the importance of the Federal Circuit because although people often think of it as a court that deals a lot with patent cases and only patent cases, its jurisdiction is much broader than that. It is the Court of Appeals for any case in the Court of Federal Claims, for example, meaning, essentially, any lawsuit against the federal government for money damages except with some limited exceptions, will -- if it's appealed, it'll ultimately go to the Federal Circuit. And, in fact, I clerked on the Federal Circuit many years ago. I wasn't a patent guy but I focused on more takings, administrative, and money damage against the government appeals, and I think that over time the Federal Circuit has become more and more prominent as more money damage litigation against the federal government is tended to be filed in the Court of Federal Claims. And it's addressing more and more cases outside of what people traditionally think of as this patent purview.

 

Caller 2:  You mentioned Judge Newman's dissent, Polly Newman, provided great insight on that court so, thank you.

 

Wesley Hodges:  Thank you very much. Next caller, you are up.

 

Michael Tracy (sp):  Yes, thank you. My name's Michael Tracy. Just a question on assuming the Supreme Court adopts your reasoning about reliances on promises made by the United States government. What impact would that have on Native Americans seeking to enforce treaty rights and various other promises that were made to them by the federal government? Assuming this is adopted, wouldn't that open the flood gates for enforcing these types of promises?

 

Jason A. Levine:  If the Supreme Court would reverse?

 

Michael Tracy:  Yes.

 

Jason A. Levine:  Well, I'm not an expert in Indian law or claims made by various tribes but I would -- I believe that there are likely other legal regimes that will govern claims for treaty agreements made some time back with Native American tribes that would have to be dealt with here that could complicate their position above and beyond a principle by the Supreme Court that suggests the government can't renege on promises. I think that you have to look at the statutory backdrop of the claims themselves, and I would imagine that the ones that might be made by Native Americans will have a more complicated path than you've got here. It could possibly be a favorable precedent for them to cite in whatever claims they're pressing.

 

Michael Tracy:  How would the treatment of the Indian promises create problems saying that well if the government didn't honor its promises, it would lose its credibility, but it appears there's several hundred years of the government not honoring its promises, and they weren't overly concerned with the credibility in the past. Why should we suddenly care about credibility with health insurance companies?

 

Jason A. Levine:  I'm not familiar enough with the Native American matters that you're talking about to really comment on them intelligently, but I would say that at least in this situation, it matters at least to the extent that you're talking about the prospect of, through government contracting programs rather than a different kind of treaty scenario, alienating a sector of the economy that the government is more and more reliant on for governmental functions. Public/private partnerships are becoming pretty significant to the economy and to the extent that you've got the government able to nullify very large financial commitments that induce detrimental reliance by private companies, I think that's a problem going forward for the government for private entities to do business with and then potentially for the economy overall.

 

      In response to the earlier question, I've now remembered the answer. The question, in terms of who was on the panel of the Federal Circuit was Sharon Prost and Kimberly Moore who were in the majority, two relatively new appointees.

 

Wesley Hodges:  Well, very good. Looks like we do have one more question from the audience. Caller, you are up.

 

Caller 4:  Greetings. Generally, we're not allowed to rely on just representations that come from the government up to the point of legislation, which can be repealed. Do you have an opinion as to how far back in informality the right to rely should exist?

 

Jason A. Levine:  Well, at least in this situation, you had statutory language that was mandatory and referred to the government[’s] shall make specific payments in connection with this program. And you also had regulations that were in terms of mandatory language -- I think that it's not unreasonable for that to be construed as something upon which those who do business with the government can rely. In terms of how much more informal the language could get, I think that even if you cut it off at the use of expressed mandatory language, you would capture this situation and do a fair job of cutting off other claims for commitments made by the government that are not sufficiently clear. I think if you've got a statute and a reg that used mandatory language, in terms of making a governmental commitment, that should be sufficient to constitute a promise upon which those who detrimentally rely on it can bank on.

 

Caller 4:  Have you done the research in it? Have you thought about how far back in informality, like if it is the secretary of a particular department or all the way down to a director, is there a point that it should cut off?

 

Jason A. Levine:  I, honestly, have not researched where the cutoff point for practical purposes should be in terms of informality, no. Here, you've certainly got a statute, you've got, essentially, the secretary of HHS in regulations making these proclamations. You do have other situations where government contracts are formed by contracting officers who are obviously much further down the chain but they have specific delegations of authority from the head of their department or agency that is embodied in certificates that comes down to them acting on behalf of the agency for purposes of forming government contracts. And that's definitely not the situation here. This was essentially done at a higher level that didn't involve contracting officers. But, no, I don't really have a view on how much more informal one could be to bind the government.

 

Wesley Hodges:  Great. We do have one more question, let's go to that call.

 

Susan Lee (sp):  Hi, my name is Susan Lee. I'm currently a first-year law student, and my question to you is if there are statutes in place, there must be a process for the reimbursement, so my question is what is the government's reasoning for not reimbursing the insurers in that three-year period?

 

Jason A. Levine:  The government's reasoning was that there were, maybe you did miss it earlier, there were appropriations riders that Congress passed in December of each of these years which essentially said, without using the name of the program or referring to the program by name by reference obscurely to its legislative section, said that funds for use in that program could not include X, Y, and Z specific sources and would be limited to funds paid into the program by participating entities. So that was the basis for the government reaching that conclusion. And then the litigation was ultimately about whether that was sufficient to repeal what was the section of the Affordable Care Act which mandated these payments be made.

 

Susan Lee:  Okay, thank you.

 

Wesley Hodges:  Thank you, caller. I see no immediate questions. Jason, I turn the mic back to you. Do you have any closing thoughts before we wrap up today?

 

Jason A. Levine:  Well, I would just say I appreciate all the questions. I think it's clear that this is an interesting matter with a lot of potential ramifications including some that I have not thought through or thought about like, for example, Native American claims. Perhaps, those will be aired in briefs or oral arguments and perhaps they'll be addressed by the Court. So I think we can all look forward with some interest to what the Court ultimately does here.

 

Wesley Hodges:  Fantastic, and we've all enjoyed your remarks, Jason. Thank you so much for being with us today. On behalf of The Federalist Society, I would like to thank you for the benefit of your very valuable time and expertise. We welcome all listener feedback by email at info@fedsoc.org. Thank you all for joining for the call. We are now adjourned.

 

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