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William & Mary Law School William & Mary Law School Scholarship Repository Supreme Court Preview Conferences, Events, and Lectures 9-13-2019 Section 5: Business Law Institute of Bill of Rights Law at the William & Mary Law School Follow this and additional works at: https://scholarship.law.wm.edu/preview Part of the Supreme Court of the United States Commons Repository Citation Institute of Bill of Rights Law at the William & Mary Law School, "Section 5: Business Law" (2019). Supreme Court Preview. 288. https://scholarship.law.wm.edu/preview/288 Copyright c 2019 by the authors. This article is brought to you by the William & Mary Law School Scholarship Repository. https://scholarship.law.wm.edu/preview V. Business Law In This Section: New Case: Moda Health Plan Inc. v. United States; Maine Community Health Options v. United States; and Land of Lincoln Mutual Health Insurance Co. v. United States. “U.S. SUPREME COURT TO HEAR MODA HEALTH’S $24 MILLION ACA APPEAL” Elizabeth Hayes “SUPREME COURT TO CONSIDER CASES ACCUSING US OF SHORTING HEALTH INSURERS $12B IN PROMISED PAYMENTS” Debra Cassens Weiss “SUPREME COURT TO HEAR INSURERS’ SUIT ON OBAMACARE” Adam Liptak “INSURER WINS FIRST CSR PAYMENT DECISION; UPDATES ON BHP AND RISK CORRIDORS LITIGATION” Katie Keith “MODA TAKES A HIT IN COURT OF APPEALS DECISION” Tom Holt “INSURERS PREPARE TO APPEAL RISK CORRIDOR CASE TO THE SUPREME COURT” Evan Sweeney New Case: Allen v. Cooper “HIGH COURT TO TACKLE PIRATE SHIP COPYRIGHT FIGHT” Bill Donahue “SCOTUS TO DECIDE WHETHER STATES CAN BE SUED FOR COPYRIGHT INFRINGEMENT IN CASE INVOLVING BACKBEARD’S SHIP” Krista L. Cox “SUPREME COURT TO RULE WHETHER CONGRESS APPROPRIATELY ABROGATED STATE SOVEREIGN IMMUNITY FOR COPYRIGHT CLAIMS IN ALLEN V. COOPER” Steve Brachmann “YO HO NO: LACK OF EXPRESS LANGUAGE SCUTTLES CLAIM OF SOVEREIGN IMMUNITY WAIVER” Rebecca Harker Duttry “THE STATE CAN PLUNDER YOUR COPYRIGHT: ALLEN V. COOPER” Brain Esler New Case: Georgia v. Public.Resource.Org, Inc. “SUPREME COURT WILL HEAR CASE OVER COPYRIGHTS TO LEGAL TEXTS” Bill Donahue “THE LAW©?: NO ONE OWNS THE LAW, AND NO ONE SHOULD BE ABLE TO COPYRIGHT IT” 396 The New York Times Editorial Board “ACCUSED OF ‘TERRORISM’ FOR PUTTING LEGAL MATERIALS ONLINE” Adam Liptak “ELEVENTH CIRCUIT FINDS NO VALID COPYRIGHT IN OFFICIAL CODE OF GEORGIA ANNOTATED” Steve Bachmann New Case: Aurelius Investment, LLC v. Puerto Rico “PUERTO RICO BOARD APPOINTMENT DISPUTE GETS SUPREME COURT REVIEW” Greg Stohr, Michelle Kaske, and Steven Church “UPDATE 1- U.S. SUPREME COURT TO DECIDE LEGALITY OF PUERTO RICO FINANCIAL BOARD APPOINTMENTS” Lawrence Hurley “PUERTO RICO’S BANKRUPTCY PLAN IS ALMOST DONE, AND IT COULD START A FIGHT” Mary Williams Walsh “PUERTO RICO FACES HEDGE FUND LAWSUITS AS U.S. REPRIEVE ENDS” Michelle Kaske “FIRST CIRCUIT DECLARES APPOINTMENT OF FOMB MEMBERS VIOLATES APPOINTMENTS CLAUSE” Carlos J. Cuevas 397 Moda Health Plan Inc. v. United States Ruling Below: Moda Health Plan Inc. v. United States, 892 F.3d 1311 (Fed. Cir. 2018). Overview: Congress refused to authorize $12 billion for the expected funding of the Affordable Care Act stabilization program aimed to encourage sales by health insurance companies. Department of Justice contend that the Affordable Care Act insurers are not entitled to $12 billion because Congress specifically barred funding for that purpose. Issue: Whether Congress can evade its unambiguous statutory promise to pay health insurers for losses already incurred simply by enacting appropriations riders restricting the sources of funds available to satisfy the government’s obligation. Note: Moda Health Plan Inc. v. United States is consolidated with Maine Community Health Options v. United States; and Land of Lincoln Mutual Health Insurance Co. v. United States. MODA HEALTH PLAN, INC., Plaintiff-Appellee v. UNITED STATES, Defendant- Appellant United States Court of Appeals, Federal Circuit Decided on June 14, 2018 [Excerpt; some citations and footnotes omitted] PROST, Chief Judge: A health insurer contends that the No. 111-148, 124 Stat. 119 (2010) (codified government failed to satisfy the full amount at 42 U.S.C. §§ 18001 et seq.) (“ACA”), and of its payment obligation under a program implemented by regulations promulgated by designed to alleviate the risk of offering the U.S. Department of Health and Human coverage to an expanded pool of individuals. Services (“HHS”). The case also concerns the The Court of Federal Claims entered bills that appropriated funds to HHS and the judgment for the insurer on both statutory and Centers for Medicare & Medicaid Services contract grounds. The government appeals. (“CMS”) within HHS for the fiscal years We reverse. during which the program in question operated. We begin with the ACA. BACKGROUND I. The ACA This case concerns a three-year “risk corridors” program described in the Patient Among other reforms, the ACA established Protection and Affordable Care Act, Pub. L. “health benefit exchanges”—virtual 398 marketplaces in each state wherein participating provider organizations individuals and small groups could purchase under part D of title XVIII of the health coverage. The new exchanges offered Social Security Act. centralized opportunities for insurers to compete for new customers. The ACA (b) Payment methodology required that all plans offered in the exchanges satisfy certain criteria, including (1) Payments out providing certain “essential” benefits. The Secretary shall provide under the program established Because insurers lacked reliable data to under subsection (a) that if— estimate the cost of providing care for the (A) a participating plan’s expanded pool of individuals seeking allowable costs for any plan coverage via the new exchanges, insurers year are more than 103 faced significant risk if they elected to offer percent but not more than 108 plans in these exchanges. The ACA percent of the target amount, established three programs designed to the Secretary shall pay to the mitigate that risk and discourage insurers plan an amount equal to 50 from setting higher premiums to offset that percent of the target amount in risk: reinsurance, risk adjustment, and risk excess of 103 percent of the corridors. This case concerns the risk target amount; and corridors program. (B) a participating plan’s Section 1342 of the ACA directed the allowable costs for any plan Secretary of HHS to establish a risk corridors year are more than 108 program for calendar years 2014–2016. The percent of the target amount, full text of Section 1342 is reproduced below: the Secretary shall pay to the plan an amount equal to the (a) In general sum of 2.5 percent of the target amount plus 80 percent The Secretary shall establish and of allowable costs in excess of administer a program of risk corridors 108 percent of the target for calendar years 2014, 2015, and amount. 2016 under which a qualified health plan offered in the individual or small (2) Payments in group market shall participate in a The Secretary shall provide payment adjustment system based on under the program established the ratio of the allowable costs of the under subsection (a) that if— plan to the plan’s aggregate premiums. Such program shall be based on the program for regional 399 (A) a participating plan’s (B) Reduction for risk allowable costs for any plan adjustment and reinsurance year are less than 97 percent payments but not less than 92 percent of the target amount, the plan Allowable costs shall [be] shall pay to the Secretary an reduced by any risk amount equal to 50 percent of adjustment and reinsurance the excess of 97 percent of the payments received under target amount over the section[s] 18061 and 18063 of allowable costs; and this title. (B) a participating plan’s (2) Target amount allowable costs for any plan year are less than 92 percent The target amount of a plan of the target amount, the plan for any year is an amount shall pay to the Secretary an equal to the total premiums amount equal to the sum of (including any premium 2.5 percent of the target subsidies under any amount plus 80 percent of the governmental program), excess of 92 percent of the reduced by the administrative target amount over the costs of the plan. allowable costs. Briefly, section 1342 directed the Secretary (c) Definitions of HHS to establish a program whereby participating plans whose costs of providing In this section: coverage exceeded the premiums received (as determined by a statutory formula) would (1) Allowable costs be paid a share of their excess costs by the Secretary— “payments out.” Conversely, (A) In general participating plans whose premiums exceeded their costs (according to the same The amount of allowable formula) would pay a share of their profits to costs of a plan for any year is the Secretary—“payments in.” The risk an amount equal to the total corridors program “permit[ted] issuers to costs (other than lower [premiums] by not adding a risk administrative costs) of the premium to account for perceived plan in providing benefits uncertainties in the 2014 through 2016 covered by the plan. markets.” 400 On March 20, 2010, just three days before In March 2013, after an informal rulemaking Congress passed the ACA, the Congressional proceeding, HHS published parameters for Budget Office (“CBO”) published an payments under various ACA programs for estimate of the ACA’s cost. The CBO Cost the first year of the exchanges, 2014, Estimate made no mention of the risk including the risk corridors program. The corridors program, though it scored the parameters revised certain definitions and reinsurance and risk adjustment programs. added others, incorporating a certain level of Overall, CBO predicted the ACA would profits as part of the allowable administrative reduce the federal deficit by $143 billion over costs. The parameters also provided that an the 2010–2019 period it evaluated.
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