Maine Community Health Options v. United States
This text of 140 S. Ct. 1308 (Maine Community Health Options v. United States) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinions
Justice SOTOMAYOR delivered the opinion of the Court.
*1315The Patient Protection and Affordable Care Act expanded healthcare coverage to many who did not have or could not afford it. The Affordable Care Act did this by, among other things, providing tax credits to help people buy insurance and establishing online marketplaces where insurers could sell plans. To encourage insurers to enter those marketplaces, the Act created several programs to defray the carriers' costs and cabin their risks.
Among these initiatives was the "Risk Corridors" program, a temporary framework meant to compensate insurers for unexpectedly unprofitable plans during the marketplaces' first three years. The since-expired Risk Corridors statute, § 1342, set a formula for calculating payments under the program: If an insurance plan loses a certain amount of money, the Federal Government "shall pay" the plan; if the plan makes a certain amount of money, the plan "shall pay" the Government. See § 1342,
These cases are about whether petitioners-insurers who claim losses under the Risk Corridors program-have a right to payment under § 1342 and a damages remedy for the unpaid amounts. We hold that they do. We conclude that § 1342 of the Affordable Care Act established a money-mandating obligation, that Congress did not repeal this obligation, and that petitioners may sue the Government for damages in the Court of Federal Claims.
I
A
In 2010, Congress passed the Patient Protection and Affordable Care Act,
Insurance carriers had many reasons to participate in these new exchanges. Through the Affordable Care Act, they gained access to millions of new customers *1316with tax credits worth "billions of dollars in spending each year."
This uncertainty could have given carriers pause and affected the rates they set. So the Affordable Care Act created several risk-mitigation programs. At issue here is the Risk Corridors program.1
B
The Risk Corridors program aimed to limit participating plans' profits and losses for the exchanges' first three years (2014, 2015, and 2016). See § 1342,
When it enacted the Affordable Care Act in 2010, Congress did not simultaneously appropriate funds for the yearly payments the Secretary could potentially owe under the Risk Corridors program. Neither did Congress limit the amounts that the Government might pay under § 1342. Nor did the Congressional Budget Office (CBO) "score"-that is, calculate the budgetary impact of-the Risk Corridors program.
In later years, the CBO noted that the Risk Corridors statute did not require the program to be budget neutral. The CBO reported that, "[i]n contrast" to the Act's other risk-mitigation programs, "risk corridor collections (which will be recorded as revenues) will not necessarily equal risk corridor payments, so that program can have net effects on the budget deficit." CBO, The Budget and Economic Outlook: 2014 to 2024, p. 59 (2014). The CBO thus recognized that "[i]f insurers' costs exceed their expectations, on average, the risk corridor program will impose costs on the federal budget."
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Justice SOTOMAYOR delivered the opinion of the Court.
*1315The Patient Protection and Affordable Care Act expanded healthcare coverage to many who did not have or could not afford it. The Affordable Care Act did this by, among other things, providing tax credits to help people buy insurance and establishing online marketplaces where insurers could sell plans. To encourage insurers to enter those marketplaces, the Act created several programs to defray the carriers' costs and cabin their risks.
Among these initiatives was the "Risk Corridors" program, a temporary framework meant to compensate insurers for unexpectedly unprofitable plans during the marketplaces' first three years. The since-expired Risk Corridors statute, § 1342, set a formula for calculating payments under the program: If an insurance plan loses a certain amount of money, the Federal Government "shall pay" the plan; if the plan makes a certain amount of money, the plan "shall pay" the Government. See § 1342,
These cases are about whether petitioners-insurers who claim losses under the Risk Corridors program-have a right to payment under § 1342 and a damages remedy for the unpaid amounts. We hold that they do. We conclude that § 1342 of the Affordable Care Act established a money-mandating obligation, that Congress did not repeal this obligation, and that petitioners may sue the Government for damages in the Court of Federal Claims.
I
A
In 2010, Congress passed the Patient Protection and Affordable Care Act,
Insurance carriers had many reasons to participate in these new exchanges. Through the Affordable Care Act, they gained access to millions of new customers *1316with tax credits worth "billions of dollars in spending each year."
This uncertainty could have given carriers pause and affected the rates they set. So the Affordable Care Act created several risk-mitigation programs. At issue here is the Risk Corridors program.1
B
The Risk Corridors program aimed to limit participating plans' profits and losses for the exchanges' first three years (2014, 2015, and 2016). See § 1342,
When it enacted the Affordable Care Act in 2010, Congress did not simultaneously appropriate funds for the yearly payments the Secretary could potentially owe under the Risk Corridors program. Neither did Congress limit the amounts that the Government might pay under § 1342. Nor did the Congressional Budget Office (CBO) "score"-that is, calculate the budgetary impact of-the Risk Corridors program.
In later years, the CBO noted that the Risk Corridors statute did not require the program to be budget neutral. The CBO reported that, "[i]n contrast" to the Act's other risk-mitigation programs, "risk corridor collections (which will be recorded as revenues) will not necessarily equal risk corridor payments, so that program can have net effects on the budget deficit." CBO, The Budget and Economic Outlook: 2014 to 2024, p. 59 (2014). The CBO thus recognized that "[i]f insurers' costs exceed their expectations, on average, the risk corridor program will impose costs on the federal budget."
Like the CBO, the federal agencies charged with implementing the program agreed that § 1342 did not require budget neutrality. Nine months before the program started, HHS acknowledged that the Risk Corridors program was "not statutorily required to be budget neutral."
Similar guidance came from the Centers for Medicare and Medicaid Services (CMS), the agency tasked with helping the HHS Secretary collect and remit program payments. CMS confirmed that a lack of payments from profitable plans would not relieve the Government from making its payments to the unprofitable ones. See
C
The program's first year, 2014, tallied a deficit of about $2.5 billion. Profitable plans owed the Government $362 million, while the Government owed unprofitable plans $2.87 billion. See CMS, Risk Corridors Payment Proration Rate for 2014 (2015).
At the end of the first year, Congress enacted a bill appropriating a lump sum for CMS' Program Management. See Pub. L. 113-235, Div. G, Tit. II,
"None of the funds made available by this Act ... or transferred from other accounts funded by this Act to the 'Centers for Medicare and Medicaid Services- Program Management' account, may be used for payments under section 1342(b)(1) of Public Law 111-148 (relating to risk corridors)." § 227, id., at 2491.
The program's second year resembled its first. In February 2015, HHS repeated its belief that "risk corridors collections w[ould] be sufficient to pay for all" of the Government's "risk corridors payments."
The 2015 program year also ran a deficit, this time worth about $5.5 billion. See CMS, Risk Corridors Payment and Charge Amounts for the 2015 Benefit Year (2016). Facing a second shortfall, CMS continued to "recogniz[e] that the Affordable Care Act requires the Secretary to make full payments to issuers." CMS, Risk Corridors Payments for 2015, p. 1 (2016). CMS also confirmed that "HHS w[ould] record risk corridors payments due as an obligation of the United States Government for which full payment is required."
The program's final year, 2016, was similar. The Government owed unprofitable insurers about $3.95 billion more than profitable insurers owed the Government. See CMS, Risk Corridors Payment and Charge Amounts for the 2016 Benefit Year (2017). And Congress passed an appropriations bill with the same rider. See Pub. L. 115-31, § 223,
*1318All told, the Risk Corridors program's deficit exceeded $12 billion.
D
The dispute here is whether the Government must pay the remaining deficit. Petitioners in these consolidated cases are four health-insurance companies that participated in the healthcare exchanges: Maine Community Health Options, Blue Cross and Blue Shield of North Carolina, Land of Lincoln Mutual Health Insurance Company, and Moda Health Plan, Inc. They assert that their plans were unprofitable during the Risk Corridors program's 3-year term and that, under § 1342, the HHS Secretary still owes them hundreds of millions of dollars.
These insurers sued the Federal Government for damages in the United States Court of Federal Claims, invoking the Tucker Act,
A divided panel of the United States Court of Appeals for the Federal Circuit ruled for the Government in each appeal. See
Even so, the court held that Congress' appropriations riders impliedly "repealed or suspended" the Government's obligation. Id. , at 1322. Although the panel acknowledged that "[r]epeals by implication are generally disfavored"-especially when the "alleged repeal occurred in an appropriations bill"-it found that the riders here "adequately expressed Congress's intent to suspend" the Government's payments to unprofitable plans "beyond the sum of payments" it collected from profitable plans. Id. , at 1322-1323, 1325.
Judge Newman dissented, observing that the Government had not identified any "statement of abrogation or amendment of the statute," nor any "disclaimer" of the Government's "statutory and contractual commitments." Id. , at 1335. The dissent also reasoned that precedent undermined the court's conclusion and that the appropriations riders could not apply *1319retroactively because the Government had used the Risk Corridors program to induce insurers to enter the exchanges. Id. , at 1336-1339. Emphasizing the importance of Government credibility in public-private enterprise, the dissent warned that the majority's decision would "undermin[e] the reliability of dealings with the government." Id. , at 1340.
A majority of the Federal Circuit declined to revisit the court's decision en banc,
These cases present three questions: First, did § 1342 of the Affordable Care Act obligate the Government to pay participating insurers the full amount calculated by that statute? Second, did the obligation survive Congress' appropriations riders? And third, may petitioners sue the Government under the Tucker Act to recover on that obligation? Because our answer to each is yes, we reverse.
II
The Risk Corridors statute created a Government obligation to pay insurers the full amount set out in § 1342's formula.
An "obligation" is a "definite commitment that creates a legal liability of the government for the payment of goods and services ordered or received, or a legal duty ... that could mature into a legal liability by virtue of actions on the part of the other party beyond the control of the United States." GAO, A Glossary of Terms Used in the Federal Budget Process 70 (GAO-05-734SP, 2005). The Government may incur an obligation by contract or by statute. See
Incurring an obligation, of course, is different from paying one. After all, the Constitution's Appropriations Clause provides that "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law." Art. I, § 9, cl. 7 ; see also GAO, Principles of Federal Appropriations Law 2-3 (4th ed. 2016) (hereinafter GAO Redbook) ("[T]he authority to incur obligations by itself is not sufficient to authorize payments from the Treasury"). Creating and satisfying a Government obligation, therefore, typically involves four steps: (1) Congress passes an organic statute (like the Affordable Care Act) that creates a program, agency, or function; (2) Congress passes an Act authorizing appropriations; (3) Congress enacts the appropriation, granting "budget authority" to incur obligations and make payments, and designating the funds to be drawn; and (4) the relevant Government entity begins incurring the obligation. See id ., at 2-56; see also Op. Comp. Gen., B-193573 (Dec. 19, 1979).
But Congress can deviate from this pattern. It may, for instance, authorize agencies to enter into contracts and "incur obligations in advance of appropriations." GAO Redbook 2-4. In that context, the contracts "constitute obligations binding on the United States," such that a "failure or refusal by Congress to make the necessary appropriation would not defeat the obligation, and the party entitled to payment would most likely be able to recover in a lawsuit."
Congress can also create an obligation directly by statute, without also providing details about how it must be satisfied. Consider, for example, United States v. Langston ,
The GAO shares this view. As the Redbook explains, if Congress created an obligation by statute without detailing how it will be paid, "an agency could presumably meet a funding shortfall by such measures as making prorated payments." GAO Redbook 2-36, n. 39. But "such actions would be only temporary pending receipt of sufficient funds to honor the underlying obligation" and "[t]he recipient would remain legally entitled to the balance."
Put succinctly, Congress can create an obligation directly through statutory language.
Section 1342 imposed a legal duty of the United States that could mature into a legal liability through the insurers' actions-namely, their participating in the healthcare exchanges.
This conclusion flows from § 1342's express terms and context. See, e.g. , Merit Management Group, LP v. FTI Consulting, Inc. , 583 U.S. ----, ----,
Section 1342's adjacent provisions also underscore its mandatory nature. In § 1341 (a reinsurance program) and § 1343 (a risk-adjustment program), the Affordable Care Act differentiates between when the HHS Secretary "shall" take certain actions and when she "may" exercise discretion. See § 1341(b)(2),
Nothing in § 1342 requires the Risk Corridors program to be budget neutral, either. Nor does the text suggest that the Secretary's payments to unprofitable plans pivoted on profitable plans' payments to the Secretary, or that a partial payment would satisfy the Government's whole obligation. Thus, without "any indication" that § 1342 allows the Government to lessen its obligation, we must "give effect to [Section 1342's] plain command." Lexecon ,
The Government does not contest that § 1342's plain terms appeared to create an obligation to pay whatever amount the statutory formula provides. It insists instead that the Appropriations Clause, Art. I, § 9, cl. 7, and the Anti-Deficiency Act,
That does not follow. Neither the Appropriations Clause nor the Anti-Deficiency Act addresses whether Congress itself can create or incur an obligation directly by statute. Rather, both provisions constrain how federal employees and officers may make or authorize payments without appropriations. See U.S. Const., Art. I, § 9, cl. 7 (requiring an "Appropriatio[n] made by Law" before money may "be drawn" to satisfy a payment obligation);
*1322Ramah ,
And contrary to the Government's view, § 1342's obligation-creating language does not turn on whether Congress expressly provided "budget authority" before appropriating funds. Budget authority is an agency's power "provided by Federal law to incur financial obligations,"
The Government's arguments also conflict with wellsettled principles of statutory interpretation. At bottom, the Government contends that the existence and extent of its obligation here is "subject to the availability of appropriations." Brief for United States 41. But that language appears nowhere in § 1342, even though Congress could have expressly limited an obligation to available appropriations or specific dollar amounts. Indeed, Congress did so explicitly in other provisions of the Affordable Care Act.7
*1323This Court generally presumes that " 'when Congress includes particular language in one section of a statute but omits it in another,' " Congress " 'intended a difference in meaning.' " Digital Realty Trust, Inc. v. Somers , 583 U.S. ----, ----,
In sum, the plain terms of the Risk Corridors provision created an obligation neither contingent on nor limited by the availability of appropriations or other funds.
III
The next question is whether Congress impliedly repealed the obligation through its appropriations riders. It did not.
Because Congress did not expressly repeal § 1342, the Government seeks to show that Congress impliedly did so. But "repeals by implication are not favored," Morton v. Mancari ,
This Court's aversion to implied repeals is "especially" strong "in the appropriations context." Robertson v. Seattle Audubon Soc. ,
Langston confirms that the appropriations riders did neither. Recall that in *1324Langston , Congress had established a statutory obligation to pay a salary of $7,500, yet later appropriated a lesser amount.
Vulte reaffirmed that a mere failure to appropriate does not repeal or discharge an obligation to pay. At issue there was whether certain appropriations Acts had repealed a Government obligation to pay bonuses to military servicemen.
Relying on Langston , Vulte rejected that argument. "[I]t is to be remembered," the Court wrote, that the alleged repeals "were in appropriation acts and no words were used to indicate any other purpose than the disbursement of a sum of money for the particular fiscal years."
The parallels among Langston , Vulte , and these cases are clear. Here, like in Langston and Vulte , Congress "merely appropriated a less amount" than that required to satisfy the Government's obligation, without "expressly or by clear implication modif[ying]" it. Langston ,
The relevant agencies' responses to the riders also undermine the case for an implied repeal here. Had Congress "clearly expressed" its intent to repeal, one might have expected HHS or CMS to signal the *1325sea change. Morton ,
Given the Court's potent presumption in the appropriations context, an implied-repeal-by-rider must be made of sterner stuff.
To be sure, this Court's implied-repeal precedents reveal two situations where the Court has deemed appropriations measures irreconcilable with statutory obligations to pay. But neither one applies here.
The first line of cases involved appropriations bills that, without expressly invoking words of "repeal," reached that outcome by completely revoking or suspending the underlying obligation before the Government began incurring it. See United States v. Will ,
Here, by contrast, the appropriations riders did not use the kind of "shall not take effect" language decisive in Will . See
The second strand of precedent turned on provisions that reformed statutory payment formulas in ways "irreconcilable" with the original methods. See United States v. Mitchell ,
The appropriations bills here created no such conflict as in Mitchell and Fisher . The riders did not reference § 1342's payment formula at all, let alone "irreconcilabl[y]" change it. Mitchell , 109 U.S. at 150,
We also find unpersuasive the only pieces of legislative history that the Federal Circuit cited. According to the Court of Appeals, a floor statement and an unpublished GAO letter provided "clear intent" to cancel or "suspend" the Government's Risk Corridors obligation. See 892 F.3d at 1318-1319, 1325-1326. We doubt that either source could ever evince the kind of clear congressional intent required to repeal a statutory obligation through an appropriations rider. See United States v. Kwai Fun Wong ,
The floor statement (which Congress adopted as an "explanatory statement") does not cross the clear-expression threshold. See 160 Cong. Rec. 17805, 18307 (2014); see also § 4,
The GAO letter is even more inapt. In it, the GAO responded to two legislators' inquiry by identifying two sources of available funding for the first year of Risk Corridors payments: CMS' appropriations for the 2014 fiscal year and profitable insurance plans' payments to the Secretary. 892 F.3d at 1318 ; see also App. in No. 17-1994 (CA Fed.), pp. 234-240. Because the rider cut off the first source of funds, the Federal Circuit inferred congressional intent "to temporarily cap" the Government's payments "at the amount of payments" profitable plans made "for each of the applicable years" of the Risk Corridors program. 892 F.3d at 1325. That was error. The letter has little value because it appears nowhere in the legislative record. Perhaps for that reason, the Government does not rely on it.
IV
Having found that the Risk Corridors statute established a valid yet unfulfilled Government obligation, this Court must turn to a final question: Where does petitioners' lawsuit belong, and for what relief? We hold that petitioners properly relied on the Tucker Act to sue for damages in the Court of Federal Claims.
The United States is immune from suit unless it unequivocally consents. United States v. Navajo Nation ,
The Tucker Act, however, does not create "substantive rights." Navajo Nation ,
*1328United States v. Bormes ,
To determine whether a statutory claim falls within the Tucker Act's immunity waiver, we typically employ a "fair interpretation" test. A statute creates a "right capable of grounding a claim within the waiver of sovereign immunity if, but only if, it 'can fairly be interpreted as mandating compensation by the Federal Government for the damage sustained.' " United States v. White Mountain Apache Tribe ,
But there are two exceptions. The Tucker Act yields when the obligation-creating statute provides its own detailed remedies, or when the Administrative Procedure Act,
Petitioners clear each hurdle: The Risk Corridors statute is fairly interpreted as mandating compensation for damages, and neither exception to the Tucker Act applies.
Rarely has the Court determined whether a statute can "fairly be interpreted as mandating compensation by the Federal Government." Mitchell ,
Here again § 1342's mandatory text is significant. Statutory " 'shall pay' language" often reflects congressional intent "to create both a right and a remedy" under the Tucker Act. Bowen ,
Bolstering our finding is § 1342's focus on compensating insurers for past conduct. In assessing Tucker Act actions, this Court has distinguished statutes that "attempt to compensate a particular class of persons for past injuries or labors" from laws that "subsidize future state expenditures." Bowen ,
Nor is there a separate remedial scheme supplanting the Court of Federal Claims' power to adjudicate petitioners' claims.
True, the Tucker Act "is displaced" when "a law assertedly imposing monetary liability on the United States contains its own judicial remedies."
*1330Bormes ,
Unlike those statutes, however, the Affordable Care Act did not establish a comparable remedial scheme. Nor has the Government identified one. So this exception to the Tucker Act is no barrier here.
Neither does the Administrative Procedure Act bar petitioners' Tucker Act suit. To be sure, in Bowen , this Court held in the Medicaid context that a State properly sued the HHS Secretary under the Administrative Procedure Act (not the Tucker Act) in district court (not the Court of Federal Claims) for failure to make statutorily required payments. See
But Bowen is distinguishable on several scores. First, the relief requested there differed materially from what petitioners pursue here. In Bowen , the State did not seek money damages, but instead sued for prospective declaratory and injunctive relief to clarify the extent of the Government's ongoing obligations under the Medicaid program. Unlike § 1342, which "provide[s] compensation for specific instances of past injuries or labors,"
Second, the parties' relationship in Bowen also differs from the one implicated here. The State had employed the Administrative Procedure Act in Bowen because of the litigants' "complex ongoing relationship," which made it important that a district court adjudicate future disputes.
These observations confirm that petitioners properly sued the Government in the Court of Federal Claims. Petitioners' prayer for relief under the Risk Corridors statute looks nothing like the requested redress in Bowen . Petitioners do not ask for prospective, nonmonetary relief to clarify *1331future obligations; they seek specific sums already calculated, past due, and designed to compensate for completed labors. The Risk Corridors statute and Tucker Act allow them that remedy. And because the Risk Corridors program expired years ago, this litigation presents no special concern about managing a complex ongoing relationship or tracking ever-changing accounting sheets. Petitioners' suit thus lies in the Tucker Act's heartland.14
V
In establishing the temporary Risk Corridors program, Congress created a rare money-mandating obligation requiring the Federal Government to make payments under § 1342's formula. And by failing to appropriate enough sums for payments already owed, Congress did simply that and no more: The appropriation bills neither repealed nor discharged § 1342's unique obligation. Lacking other statutory paths to relief, and absent a Bowen barrier, petitioners may seek to collect payment through a damages action in the Court of Federal Claims.15
These holdings reflect a principle as old as the Nation itself: The Government should honor its obligations. Soon after ratification, Alexander Hamilton stressed this insight as a cornerstone of fiscal policy. "States," he wrote, "who observe their engagements ... are respected and trusted: while the reverse is the fate of those ... who pursue an opposite conduct." Report Relative to a Provision for the Support of Public Credit (Jan. 9, 1790), in 6 Papers of Alexander Hamilton 68 (H. Syrett & J. Cooke eds. 1962). Centuries later, this Court's case law still concurs.
The judgments of the Court of Appeals are reversed, and the cases are remanded for further proceedings consistent with this opinion.
It is so ordered.
Together with No. 18-1028, Moda Health Plan, Inc. v. United States (see this Court's Rule 12.4) and Blue Cross and Blue Shield of North Carolina v. United States (see this Court's Rule 12.4); and No. 18-1038, Land of Lincoln Mutual Health Insurance Co. v. United States , also on certiorari to the same court.
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140 S. Ct. 1308, 206 L. Ed. 2d 764, Counsel Stack Legal Research, https://law.counselstack.com/opinion/maine-community-health-options-v-united-states-scotus-2020.