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CMS Ordered to Pay $1.2M in Montana CSR Suit

Analysis  |  By John Commins  
   October 08, 2018

The order follows a federal judge's ruling last month that CMS was still responsible for cost-sharing payments to Montana Health Co-op, even though Congress provided no funding.

A federal claims court has ordered the Centers for Medicare & Medicaid Services to pay Montana Health Co-op more than $1.2 million in cost-sharing payments that the Trump Administration and Congress reneged on last fall.

Judge Elaine D. Kaplan had ruled that the federal government was statutorily obligated to make good on the CSR payments for the fourth quarter of 2017, which Kaplan said "was not vitiated by Congress’s failure to appropriate funds for that purpose."

The $1.2 million payout was the amount that CMS said it would have paid Montana Health for the quarter had the funding not been cut off.

The CSR payments lowered premiums, copays and deductibles for eligible enrollees in the Affordable Care Act Marketplaces.

CMS had been making the payments from 2014 through October 2017, but stopped after Congress refused to appropriate the money. Montana Health and other stakeholders filed suit seeking the payments for the fourth quarter.  

The Trump Administration and the Republican-controlled Congress ignored the pleas of the CSR stakeholders and characterized the payments as a "bailout" for the insurance industry.  

Even without the CSR funding, health insurers still had to provide the coverage at a reduced rate for the eligible enrollees, which prompted silver plan premium hikes for non-eligible enrollees to offset the lost CSR payments.

Julius W. Hobson, Jr., a senior policy advisor with Washington, DC-based Polsinelli, says the claims court ruling is not the end of the fight.

"Until, and unless, the U.S. Supreme Court finally rules on this matter, we will continue to see suits filed and considered by lower federal courts," he says.

"The question is whether the Administration will seek to expedite appellate review on this matter. Otherwise, we will continue to see state-by-state judicial decisions. I have no expectations that Congress will address the matter now or in the near future."

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


The $1.2 million is what CMS said it would have paid Montana Health, had the CSR payments not stopped.

The case is a bellwether for other stakeholders seeking CSR payments from the government.

The Trump Administration characterized the CSR payments as a 'bailout' for health insurance companies.

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