While politicians, the media, and the public actively debate the future of the Affordable Care Act, litigation over the ACA and implementation of the law go on. On November 10, Judge Charles Lettow of the United States Court of Claims dismissed all claims brought by Land of Lincoln Mutual Health Insurance Company in its lawsuit against the United States. This is the first decision on the merits in one of the nearly a dozen lawsuits brought by insurers claiming that the government violated its legal obligations when it failed to pay marketplace insurers the money they believe they are owed under the Affordable Care Act’s risk corridor program.
The risk corridor program is one of the Affordable Care Act’s three premium stabilization programs. It was designed to attract normally risk-averse insurers into offering a new product to a new population with uncertain prospects during the first three years of the health insurance marketplaces. It collects contributions from participating insurers that made profits that exceed certain “risk corridors” and makes payments to insurers whose losses fall outside those risk corridors.
Nothing in the statutory provision creating the ACA program required it to be revenue neutral. Insurers entered the marketplaces in 2014 believing that risk corridor payments would be made if they were due under the statutory formula regardless of the level of collections, although the Centers for Medicare and Medicaid Services (CMS) had stated that if payments owed exceeded collections, 2014 or 2015 payments might not be made until later in the program.
Near the end of 2014, however, Congress attached a rider to its 2015 appropriations bill, providing that the risk corridor program had to be revenue neutral — CMS could only pay out funds under the program for 2014 that it collected under the program. Congress has renewed this rider for 2015 payments as well.
In the end ACA insurers collectively incurred $2.87 billion in losses exceeding the risk corridor boundaries for 2014, but only ended up owing $362 million in contributions. CMS was able to pay out only $0.126 on the dollar to insurers owed payments. Land of Lincoln specifically claimed that it was due $4.5 million for 2014 under the statutory formula but only collected $567 thousand. For 2015 it claimed that it was due $72 million under the statutory formula, but is not likely to receive any payment, as all 2015 collections will go to 2014 claims.
Land of Lincoln claimed that the risk corridor statute entitled it to payment according to the statutory and regulatory formulas, that HHS had entered into an express or implied contract to make the risk corridor payments, and that the government had taken its property without compensation in violation of the Fifth Amendment’s Takings Clause. The federal government moved to dismiss the case for lack of jurisdiction and for failure to state a claim.
Judge Lettow ruled that the Court of Claims did have jurisdiction over Land of Lincoln’s monetary claims. Claims for money owed under a statute, contract, or the Constitution fall within the jurisdiction of the Court of Claims.
He proceeded, however, to reject each of the plaintiff’s claims on the merits. Applying the Chevron Rule, which calls for judicial deference to administrative regulations, Judge Lettow held that the Affordable Care Act does not clearly entitle health plans to risk corridor payments. The Department of Health and Human Service reasonably interpreted the statute to not require full risk corridor payments on an annual basis. Nothing in Land of Lincoln’s express contract with HHS, or in any implied contract, required full annual risk corridor payments. Indeed, after Congress limited payments to collections for 2015, it is difficult for insurers to argue reliance on any promises from the government. Finally, the court rejected Land of Lincoln’s constitutional claim, holding that its property had not been taken.
Judge Lettow’s decision is not binding, as far as I know, on the other Court of Claims judges before whom other risk corridor cases are pending. But it is a long and well-reasoned decision and is likely to persuade other judges. In the end, however, the opinion only concludes that no risk corridor payments are currently owing, and leaves open, at least a little, whether any payments will be due at the conclusion of the program (a question HHS has left open as well.)
OSHA Regulation Implements ACA Section 1558
A recent regulation implementing the ACA was finalized before the election, on October 13, by the Occupational Safety and Health Administration, which heretofore has not played a significant role in ACA implementation. It establishes procedures for handling retaliation complaints under section 1558 of the ACA.
Section 1558 prohibits employers from retaliating against employees (including former employees or applicants for employment) for receiving premium tax credits or cost-sharing reduction payments under the ACA. Since large employers are only liable for the penalties imposed by the employer mandate if they fail to offer coverage to their full-time employees and one of their full-time employees receives premium tax credits or cost-sharing reduction payments, such retaliation is quite conceivable. Section 1558 also prohibits retaliation against employees who provide information to their employer or to government authorities relating to a violation or reasonably believed violation of the Title I (the insurance provisions) of the ACA; testify or are about to testify in a proceeding concerning such a violation; assist or participate or are about to participate in such a proceeding; or object to or refuse to participate in any activity that the employee believes to violate Title I of the ACA.
The regulation defines “retaliate” broadly as including,
intimidating, threatening, restraining, coercing, blacklisting or disciplining, any employee with respect to the employee’s compensation, terms, conditions, or privileges of employment because the employee (or an individual acting at the request of the employee), has engaged in [a protected act].
Employees who believe that they have been retaliated against may file a complaint, orally or in writing, in any language, with OSHA within 180 days of the alleged violation. OSHA will notify the respondent and relevant federal agencies. Within 20 days or the receipt of the notice of the filing of the complaint, the complainant and respondent can provide OSHA written statements and affidavits. OSHA will provide both parties with information it receives, redacting information as necessary to protect privacy and the confidentiality of witnesses who provide information on a confidential basis.
OSHA will dismiss the complaint unless the complaint and subsequent interviews with the complainant establishes a prima facie case of a violation of the prohibition—that is show that the employee engaged in a protected activity, the respondent knew or suspect this, the employee suffered an adverse action, and the circumstances suggest that the protected activity was a contributing factor to the respondent’s action. A prima facie case may be established by circumstantial evidence, such as a showing that the adverse action took place shortly after the protected activity.
If a prima face case is not alleged, or if the respondent establishes by clear and convincing evidence that it would have taken the same adverse action in the absence of the protected activity, OSHA can refuse to investigate further. If the investigation proceeds, the Assistant Secretary of Labor will issue written findings as to whether there is reasonable cause to believe that retaliation has occurred within 60 days of the complaint. If the Assistant Secretary concludes that there is reasonable cause, the findings will be accompanied with a preliminary order, which can require, where appropriate:
Affirmative action to abate the violation; reinstatement of the complainant to his or her former position, together with the compensation (including back pay and interest), terms, conditions and privileges of the complainant’s employment; and payment of compensatory damages, including, at the request of the complainant, the aggregate amount of all costs and expenses (including attorney and expert witness fees) reasonably incurred.
If the Assistant Secretary concludes that no violation has occurred the complaint will be dismissed. The parties will be notified and the respondent can request up to $1,000 in attorney’s fees from an administrative law judge (ALJ) if the ALJ concludes that the complaint was frivolous or brought in bad faith.
Either party may also appeal the Assistant Secretary’s findings to an ALJ with 30 days. If no appeal is filed of an order in favor of the complainant within 30 days, the order becomes effective as the final order of the Secretary of Labor, not subject to judicial review. Even if there is an appeal, a reinstatement order is effective immediately unless an ALJ stays the order for “exceptional circumstances.”
If ALJ review of the preliminary findings and order or a request for attorneys’ fee is requested, an ALJ will consider the evidence all over again (“do novo”) on the record and may hold a hearing. The Assistant Secretary may participate in the hearing and other federal agencies may file amicus briefs.
The ALJ may find a violation of the retaliation prohibition and issue relief for the complainant if it concludes that a preponderance of the evidence favors the complainant. Even if the complainant meets this standard, the respondent may prevail if it establishes “clear and convincing” evidence that it would have taken the same action absent the protected conduct. If the ALJ either concludes that the complainant has not met its burden or that the respondent has refuted the complainant’s claim, the ALJ can dismiss the complaint and award up to $1,000 in attorneys’ fees to the respondent if it establishes that the complaint was frivolous or in bad faith.
Either party can appeal the ALJ’s decision to the Administrative Review Board within 14 days. If no appeal is filed, the ALJ’s decision becomes final within 30 days. If an appeal is filed, the ALR can decide whether or not to hear the appeal. If it takes the appeal, it will decide whether the ALJ decision was supported by substantial evidence and enter a final order.
Within 60 days of final order, the losing party may appeal to the United States Court of Appeal for the appropriate circuit. The federal district courts have jurisdiction to enforce the final orders of the Secretary of Labor or to hear a complaint by a protected person if the Department of Labor fails to take action within 210 days. Parties may settle complaints at virtually any point in the process subject to approval by OSHA, an ALJ, or the ARB (as appropriate).
from Health Affairs BlogHealth Affairs Blog http://ift.tt/2ezcX3V
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