L.A. Care Health Plan, the largest publicly operated health plan in the country, is pleased to announce that Judge Thomas C. Wheeler of the U.S. Court of Federal Claims ordered the federal government to pay L.A. Care more than $16.7 million in cost-sharing reduction (CSR) payments that the government wrongfully withheld in 2019. L.A. Care is the only health plan, so far, to have prevailed in court on a 2019 CSR claim and obtain a judgment for all 2019 CSR payments owed.
“The court has once again ruled that the Trump Administration is wrong to call CSR payments a bailout for insurance companies,” said John Baackes, L.A. Care CEO. “We are grateful that Judge Wheeler is making the federal government fulfill its responsibilities.”
The Affordable Care Act promised federal reimbursement for any reduction in out of pocket costs, deductibles and copays health plans offered their eligible members. In late 2017, the Trump Administration ended the CSR reimbursements (which had been made for 45 consecutive months) claiming there is no appropriation for the CSR payments owed under the ACA. The Court disagreed, ruling that the federal government has a statutory obligation, as well as a contractual obligation, to make the CSR payments.
The Court previously ruled for L.A. Care last year granting summary judgment in its favor for the CSR payments the government owed L.A. Care for 2017 and 2018 totaling approximately $17.8 million. The judgment for 2019 CSR brings the total amount the Court has ordered the government to pay L.A. Care to $35.4 million.
L.A. Care was represented by Lawrence S. Sher and Conor M. Shaffer of Reed Smith LLP, and an in-house legal team of Augustavia J. Haydel, General Counsel, Ellin Davtyan, Associate General Counsel and Oren Rosenthal, Associate Counsel.