Sanford Health Plan v. United States

Case: 19-1290 Document: 71 Page: 1 Filed: 08/14/2020

United States Court of Appeals
for the Federal Circuit
______________________

SANFORD HEALTH PLAN, MONTANA HEALTH
CO-OP,
Plaintiffs-Appellees

v.

UNITED STATES,
Defendant-Appellant
______________________

2019-1290, 2019-1302
______________________

Appeals from the United States Court of Federal
Claims in Nos. 1:18-cv-00136-EDK, 1:18-cv-00143-EDK,
Judge Elaine Kaplan.

______________________

Decided: August 14, 2020
______________________

DANIEL WILLIAM WOLFF, Crowell & Moring, LLP,
Washington, DC, argued for plaintiffs-appellees. Also rep-
resented by STEPHEN JOHN MCBRADY, SKYE MATHIESON,
CHARLES BAEK.

ALISA BETH KLEIN, Appellate Staff, Civil Division,
United States Department of Justice, Washington, DC, ar-
gued for defendant-appellant. Also represented by MARK
B. STERN, ETHAN P. DAVIS.
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2 SANFORD HEALTH PLAN v. UNITED STATES

LAWRENCE SHER, Reed Smith LLP, Washington, DC,
for amici curiae Blue Cross Blue Shield of North Dakota,
Blue Cross and Blue Shield of Vermont, Local Initiative
Health Authority for L.A. County, Molina Healthcare of
California, Inc. Also represented by COLIN E. WRABLEY,
Pittsburgh, PA.

STEPHEN A. SWEDLOW, Quinn Emanuel Urquhart &
Sullivan, LLP, Chicago, IL, for amicus curiae Common
Ground Healthcare Cooperative.
______________________

Before DYK, BRYSON, and TARANTO, Circuit Judges.
TARANTO, Circuit Judge.
In the Patient Protection and Affordable Care Act (the
ACA), Pub. L. No. 111-148, 124 Stat. 119 (2010), as
amended, Congress directed each State to establish an
online exchange through which insurers may sell health
plans if the plans meet certain requirements. One such re-
quirement is that insurers must agree to reduce the “cost-
sharing” burdens—such as the burdens of making co-pay-
ments and meeting deductibles—of certain of their custom-
ers. When insurers meet that requirement, the ACA says,
the Secretary of Health and Human Services (HHS) shall
reimburse them for the required cost-sharing reductions
they have provided to their customers. 42 U.S.C.
§ 18071(c)(3)(A) (“the Secretary shall make periodic and
timely payments to the issuer equal to the value of the re-
ductions”). This reimbursement seeks to make the insur-
ers whole for the increased payments they make to
healthcare providers when customers do not pay the pro-
viders unreduced cost-sharing amounts.
In October 2017, the Secretary stopped making reim-
bursement payments, due to determinations that such pay-
ments were not within the congressional appropriation
that the Secretary had, until then, been invoking to pay the
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SANFORD HEALTH PLAN v. UNITED STATES 3

reimbursements. In January 2018, Sanford Health Plan—
a seller of insurance through the North Dakota, South Da-
kota, and Iowa exchanges—and Montana Health CO-OP—
a seller of insurance through the Montana and Idaho ex-
changes—brought materially identically actions against
the United States in the Court of Federal Claims. The two
plaintiffs alleged that they were entitled to damages be-
cause the government had violated its statutory obliga-
tion—or, in the alternative, breached an implied-in-fact
contract—by failing to reimburse them for the cost-sharing
reductions they made during the final months of 2017.
The trial court granted summary judgment for the
plaintiffs. Sanford Health Plan v. United States,
139 Fed. Cl. 701 (2018); Montana Health CO-OP v. United
States, 139 Fed. Cl. 213 (2018). In materially identical
opinions, the court concluded that the ACA provision on re-
imbursement of cost-sharing reductions is “money-man-
dating” and that the government is liable for money
damages for its failure to make reimbursements for the
2017 reductions. Sanford, 139 Fed. Cl. at 702, 706–09;
Montana, 139 Fed. Cl. at 214, 218–21. The court did not
reach the contract claim in either case. Sanford,
139 Fed. Cl. at 704 n.4; Montana, 139 Fed. Cl. at 216 n.4.
Based on stipulations as to the amounts due, the court ul-
timately entered final judgments of $360,254.00 for San-
ford and $1,234.058.79 for Montana.
The government appeals. We consolidated the appeals,
and we now affirm. After initial briefing and argument,
the Supreme Court decided Maine Community Health Op-
tions v. United States, 140 S. Ct. 1308 (2020), addressing a
different payment-obligation provision of the ACA. We
conclude that Maine Community makes clear that the cost-
sharing-reduction reimbursement provision imposes an
unambiguous obligation on the government to pay money
and that the obligation is enforceable through a damages
action in the Court of Federal Claims under the Tucker Act,
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4 SANFORD HEALTH PLAN v. UNITED STATES

28 U.S.C. § 1491(a)(1). We see no persuasive basis for dis-
tinguishing these cases from Maine Community.
I
Under the ACA, each State was to “establish an Amer-
ican Health Benefit Exchange.” 42 U.S.C. § 18031(b)(1). 1
Exchanges are “virtual health-insurance markets,” Maine,
140 S. Ct. at 1315, that are designed to “facilitate[] the pur-
chase of qualified health plans,” 42 U.S.C. § 18031(b)(1)(A).
A “qualified health plan” must provide certain “essential
health benefits” and, based on the “full actuarial value of
the benefits provided under the plan,” is designated as
providing one of four “levels of coverage”: bronze, silver,
gold, or platinum, which differ in the percent of the plan
benefits that the insurer pays. Id., § 18022(a), (d). A silver
plan “is designed to provide benefits that are actuarially
equivalent to 70 percent of the full actuarial value of the
benefits provided under the plan,” leaving 30% for the en-
rollee (or someone else) to pay. Id., § 18022(d)(1)(B). To
sell plans on an exchange, an insurer must “offer at least
one qualified health plan in the silver level and at least one
plan in the gold level.” Id., § 18021(a)(1)(C)(ii).
In addition to providing for the basic exchange infra-
structure, the ACA, as relevant here, includes two mecha-
nisms to help certain enrollees in exchange-offered
insurance plans bear the cost of obtaining healthcare
through such plans. One is directly at issue, the other as-
serted by the government to be indirectly relevant. We de-
scribe them in turn.

1 In referring to the ACA, we include the amendment
adopted almost immediately after enactment. Health Care
and Education Reconciliation Act of 2010, Pub. L. No. 111-
152, 124 Stat. 1029 (2010). We have been pointed to no
later changes in the ACA that alter the analysis.
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SANFORD HEALTH PLAN v. UNITED STATES 5

A
The mechanism directly at issue involves reductions in
“cost-sharing”—the contributions to healthcare providers’
charges that enrollees must make by way of “deductibles,
coinsurance, copayments, or similar charges” or “any other
expenditure required of an insured individual” for defined
medical expenses. 42 U.S.C. § 18022(c)(3)(A). Specifically,
section 1402 of the ACA, which is codified at 42 U.S.C.
§ 18071, states that the Secretary of HHS “shall” notify an
insurer offering a plan on an exchange if an “eligible in-
sured” is “enrolled in a qualified health plan” and, for such
an enrollment, that the insurer “shall reduce the cost-shar-
ing under the plan” as specified in subsection (c). Id.,
§ 18071(a)(2). An “eligible insured” must be enrolled in a
silver-level plan. Id., § 18071(b)(1). The “eligible insured”
must also be an individual “whose household income ex-
ceeds 100 percent but does not exceed 400 percent of the
poverty line.” Id., § 18071(b). The amount of the required
cost-sharing reduction varies based on relevant family in-
come. Id., § 18071(c)(1)(A); see also id., § 18071(c)(2) (addi-
tional cost-sharing reductions for lower income enrollees).
Of critical importance for purposes of the present ap-
peals, the ACA guarantees reimbursement to insurers of
the mandated cost-sharing reductions so that the man-
date’s burden falls on the federal government, not the in-
surers that otherwise would pay healthcare providers
amounts not paid to them by enrollees when cost sharing
is reduced:
An issuer of a qualified health plan making reduc-
tions under this subsection shall notify the Secre-
tary [of HHS] of such reductions and the Secretary
shall make periodic and timely payments to the is-
suer equal to the value of the reductions.
Id., § 18071(c)(3)(A) (emphasis added). The ACA reinforces
that payment commitment by providing for the govern-
ment to make advance payments of amounts due. See id.,
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6 SANFORD HEALTH PLAN v. UNITED STATES

§ 18082(c)(3) (directing the Secretary of the Treasury, upon
receiving notice from the Secretary of HHS “if an advance
payment of the cost-sharing reductions . . . is to be made to
the [insurer],” to “make such advance payment at such
time and in such amount as the Secretary [of HHS] speci-
fies in the notice”).
As confirmed by the regulations adopted by the Secre-
tary of HHS, advance payments are merely provisional
transfers, with the government’s payment obligation ulti-
mately fixed by looking back to what cost-sharing reduc-
tions a relevant insurer has actually provided to an eligible
insured (with accompanying increased payments the in-
surer made to healthcare providers). See 45 C.F.R.
§ 156.430. Thus, “the regulations specify that such insur-
ers ‘will receive periodic advance payments based on the
advance payment amounts calculated in accordance’ with
a regulatory formula.” Sanford, 139 Fed. Cl. at 703 (quot-
ing 45 C.F.R. § 156.430(b)(1)); Montana, 139 Fed. Cl. at 215
(same). And “[t]he regulations further provide that HHS
will reconcile the amounts paid in advance and the actual
cost-sharing reductions made.” Sanford, 139 Fed. Cl. at
703 n.2; Montana, 139 Fed. Cl. at 215 n.2 (same); see 45
C.F.R. § 156.430(d) (stating that “HHS will perform peri-
odic reconciliations of any advance payments of cost-shar-
ing reductions provided to” an insurer against “[t]he actual
amount of cost-sharing reductions provided to enrollees and
reimbursed to providers” by the insurer) (emphasis added);
id., § 156.430(e) (providing that if “the actual amounts of
cost-sharing reductions” described in (d) are “[l]ess than
the amount of advance payments provided,” the insurer
“must repay the difference to HHS”; similarly, if advance
payments were too low to reflect actual amounts under (d),
“HHS will reimburse [the insurer] for the difference”).
Despite the payment command regarding cost-sharing
reduction reimbursements, however, the ACA contains no
permanent appropriation referring to such payments.
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SANFORD HEALTH PLAN v. UNITED STATES 7

B
In section 1401, the ACA establishes a second mecha-
nism for helping enrollees in exchange-offered plans to
bear their costs. This mechanism provides a refundable
tax credit to lower the premiums that certain enrollees pay
to their insurers, with the federal government subsidizing
the premium reductions.
Specifically, under section 1401 of the ACA, which is
codified in the Internal Revenue Code, 26 U.S.C. § 36B,
each “applicable taxpayer” is entitled to a tax credit of “an
amount equal to the premium assistance credit amount of
the taxpayer for the taxable year.” 26 U.S.C. § 36B(a). De-
termining who qualifies as an “applicable taxpayer” is
straightforward. “The term ‘applicable taxpayer’ means
. . . a taxpayer whose household income for the taxable year
equals or exceeds 100 percent but does not exceed 400 per-
cent of an amount equal to the poverty line.” See id.,
§ 36B(c)(1)(A). Notably, while the income qualification
mirrors the income standard of the “eligible enrollee” defi-
nition for the cost-sharing reduction program, the premium
tax credit program is available more broadly, because “ap-
plicable taxpayer” for the premium tax credit, unlike “eli-
gible enrollee” for the cost-sharing reduction, is not
restricted to a purchaser of a silver-level plan. 2
Determining the “premium assistance credit
amount”—i.e., the “sum of the premium assistance

2 The cost-sharing reduction provision of the ACA
adds that allowance of a premium tax credit is a prerequi-
site to allowance of a cost-sharing reduction: “No cost-shar-
ing reduction shall be allowed under this section with
respect to coverage for any month unless the month is a
coverage month with respect to which a credit is allowed to
the insured (or an applicable taxpayer on behalf of the in-
sured) under [26 U.S.C. § 36B].” 42 U.S.C. § 18071(f)(2).
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8 SANFORD HEALTH PLAN v. UNITED STATES

amounts . . . with respect to all coverage months of the tax-
payer occurring during the taxable year,” id., § 36B(b)(1)—
is more complicated. Calculated on a monthly basis, the
“premium assistance amount” is the lesser of (1) the
monthly premium for the taxpayer’s plan and (2) the “ex-
cess” of the monthly premium for the “applicable second
lowest cost silver plan with respect to the taxpayer, over
. . . an amount equal to 1/12 of the product of the applicable
percentage and the taxpayer’s household income.” Id.,
§ 36B(b)(2). Congress provided for payment of the pre-
mium tax credits directly to insurers, using language sim-
ilar, though not identical, to the language providing for
payment of cost-sharing reduction reimbursements to in-
surers. Id., § 36B(f); 42 U.S.C. §§ 18081, 18082.
For the refundable tax credits, unlike for the cost-shar-
ing reduction reimbursements, Congress provided for pay-
ment through an express permanent appropriation.
Specifically, the payment of the tax credits is implemented
through 31 U.S.C. § 1324, which provides for the “Refund
of internal revenue collections.” That provision perma-
nently appropriates “[n]ecessary amounts . . . to the Secre-
tary of the Treasury for refunding internal revenue
collections as provided by law,” id., § 1324(a), but only for
expressly listed refunds: “[d]isbursements may be made
from the appropriation made by this section only for . . . re-
funds due from credit provisions” that are then specifically
enumerated, id., § 1324(b)(2). As amended by the ACA, one
such enumerated provision is 26 U.S.C. § 36B. 31 U.S.C.
§ 1324(b)(2). The enumeration does not include the ACA’s
cost-sharing reduction reimbursement provision.
C
The government argues that the premium tax credit
subsidy mechanism, though not directly at issue here, is
indirectly relevant to assessing its liability for non-pay-
ment of cost-sharing reduction reimbursements. That ar-
gument depends on the interaction of the two subsidy
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SANFORD HEALTH PLAN v. UNITED STATES 9

mechanisms in operation. A district court explained two
aspects of that interaction in California v. Trump,
267 F. Supp. 3d 1119 (N.D. Cal. 2017). It explained that,
given how the tax credit is defined, the credit for an enrol-
lee in any plan can rise when the premium for the second-
lowest-cost silver plan rises, id. at 1134, and it also ex-
plained that when many States raised silver plan premi-
ums to offset insurers’ loss of cost-sharing reduction
reimbursements, the result was that many consumers re-
ceived higher premium tax credits, id. at 1133–38. See
Sanford, 139 Fed. Cl. at 709 n.7; Montana, 139 Fed. Cl. at
220 n.7. The government builds on those two points here
to argue that, because premium tax credits are paid to in-
surers, the loss insurers suffer from non-reimbursement of
cost-sharing reductions will often be reduced or wholly
eliminated (or, indeed, more than offset) by premium in-
creases designed to account for the cessation of federal pay-
ment of cost-sharing reduction reimbursements. In the
Sanford and Montana cases, however, the government ac-
cepts that there were no such premium increases for the
2017 period at issue. See Sanford, 139 Fed. Cl. at 709
(“Sanford was unable to raise its premiums to make up for
the shortfall in 2017, because by the time HHS issued its
stop payment order, premiums for that year were set”);
Montana, 139 Fed. Cl. at 220 (same for Montana).
For these cases, therefore, the government’s argument
is necessarily a categorical one. The government argues
that the existence of the statutory mechanism for premium
tax credits categorically eliminates the availability of a
Tucker Act damages action for the nonpayment of cost-
sharing reduction reimbursements, even if, for a particular
period, there were no premium increases that had the pur-
pose or effect of offsetting an insurer’s loss of cost-reduction
reimbursements. In this regard, certain textual intercon-
nections of the two mechanisms are worth noting.
42 U.S.C. § 18071, which provides for cost-sharing re-
ductions and reimbursements, contains several references
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10 SANFORD HEALTH PLAN v. UNITED STATES

to 26 U.S.C. § 36B, the premium tax credit provision. See
42 U.S.C. § 18071(f)(2) (quoted in note 2, supra) (indicating
that allowance of cost-sharing reduction depends on allow-
ance of premium tax credit); id., § 18071(b) (referring to 26
U.S.C. § 36B(c)(1)(B), concerning aliens lawfully present in
the United States); id., § 18071(f)(1) (“Any term used in
this section which is also used in section 36B of title 26
shall have the meaning given such term by such section.”);
id., § 18071(f)(3) (“Any determination under this section
shall be made on the basis of the taxable year for which the
advance determination [concerning certain qualifications
for ACA benefits] is made under section 18082 of this title
and not the taxable year for which the credit under section
36B of title 26 is allowed.”). Moreover, other ACA provi-
sions that provide for various implementation programs,
including direct payments to insurers, address both cost-
sharing reductions and premium tax credits. See 42 U.S.C.
§§ 18081, 18082 (codifying ACA sections 1411 and 1412).
Among those provisions is 42 U.S.C. § 18082(a)(3), which
refers to both forms of subsidy as aimed at reducing “pre-
miums”: “the Secretary of the Treasury makes advance
payments of such credit or reductions to the issuers of the
qualified health plans in order to reduce the premiums pay-
able by individuals eligible for such credit.” Id.
II
In preparation for the inaugural year of the exchanges,
the President requested roughly $4 billion for “carrying
out, except as otherwise provided, sections 1402 and 1412
of the Patient Protection and Affordable Care Act.” Execu-
tive Office of the President, Appendix¸ Budget of the U.S.
Government, Fiscal Year 2014, at 448, available at
https://bit.ly/36YUqGi. Congress declined to provide the
requested appropriation for reimbursement to insurers for
their cost-sharing reductions. See Consolidated Appropri-
ations Act, 2014, Pub. L. No. 113-76, 128 Stat. 5; S. Rep.
No. 113-71, at 123 (2013) (stating that the “recommenda-
tion does not include a mandatory appropriation, requested
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SANFORD HEALTH PLAN v. UNITED STATES 11

by the administration, for reduced cost sharing assistance
for individuals enrolling in qualified health plans pur-
chased through the Health Insurance Marketplace, as pro-
vided for in sections 1402 and 1412 of the ACA”).
In January 2014, despite the absence of a specific ap-
propriation, the Secretary of the Treasury began making
cost-sharing reduction reimbursement payments to insur-
ers. When the House of Representatives brought an action
for an injunction to stop those payments, the Secretary of
HHS and the Secretary of the Treasury (the Secretaries)
explained that they had jointly determined that “the per-
manent appropriation in 31 U.S.C. § 1324, as amended by
the Affordable Care Act, is available to fund all components
of the Act’s integrated system of subsidies for the purchase
of health insurance, including both the premium tax credit
and cost-sharing portions of the advance payments re-
quired by the Act.” United States House of Representatives
v. Burwell, 185 F. Supp. 3d 165, 174 (D.D.C. 2016) (internal
quotations omitted). The district court rejected that posi-
tion, granted summary judgment for the House, and issued
an injunction. Id. at 168, 174–89. In its analysis, the court
described various statutory differences in the treatment of
cost-sharing reductions and tax credits, including in the
provision for advance payment to insurers, and concluded
that such differences show, contrary to the government’s
contention, “the lack of congressional intent to fuse Sec-
tions 1401 and 1402 together through a ‘unified’ program.”
Id. at 178. The district court sua sponte stayed its injunc-
tion pending appeal, id. at 168, 189, and cost-sharing re-
duction reimbursement payments continued.
In October 2017, the Attorney General informed the
Secretaries that it was unlawful to use the permanent ap-
propriation for refundable tax credits to make cost-sharing
reduction reimbursement payments. See Letter from the
Attorney General to the Secretary of the Treasury and the
Acting Secretary of HHS, at 1 (Oct. 11, 2017), available at
https://bit.ly/36Zqzh6. The next day, the Secretary of HHS
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12 SANFORD HEALTH PLAN v. UNITED STATES

announced that cost-sharing reduction reimbursement
payments would be “prohibited unless and until a valid ap-
propriation exists.” Memorandum from the Acting Secre-
tary of HHS to the Administrator of CMS, Payments to
Issuers for Cost-Sharing Reductions, at 1 (Oct. 12, 2017),
available at https://bit.ly/36Zqzh6. With that decision, the
House of Representatives case was settled and the injunc-
tion vacated.
The present actions, filed by Sanford and Montana, fol-
lowed in January 2018. As these cases come before us, each
action involves only unreimbursed cost-sharing reductions
for the last quarter of 2017. It is undisputed that, for that
period, neither insurer set higher premiums to offset the
absence of cost-sharing reduction reimbursement pay-
ments. In these respects, the present two cases differ from
two other cases decided today, Community Health Choice,
Inc. v. United States, No. 2019-1633, and Maine Commu-
nity Health Options v. United States, No. 2019-2102, both
of which involve periods after 2017 for which it is alleged
that the insurers, with the approval of state insurance reg-
ulators, did raise premiums to offset the non-payment of
cost-sharing reduction reimbursements. The trial court, as
noted above, ruled in favor of Sanford and Montana and
entered judgments for stipulated amounts for the 2017 pe-
riod at issue.
The government timely appealed to this court. We
have jurisdiction under 28 U.S.C. § 1295(a)(3).
III
On appeal, the government challenges the trial court’s
determination that the ACA provision commanding pay-
ment of cost-sharing reduction reimbursements, 42 U.S.C.
§ 18071(c)(3), is a money-mandating provision for the vio-
lation of which the insurers here may seek money damages
under the Tucker Act, 28 U.S.C. § 1491(a)(1). That chal-
lenge presents a question of law. See Fisher v. United
States, 402 F.3d 1167, 1173 (Fed. Cir. 2005). We reject the
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SANFORD HEALTH PLAN v. UNITED STATES 13

government’s challenge. Having so concluded, we, like the
trial court, decline to address the alternative claim for
breach of contract.
A
The Supreme Court recently explained the governing
law in Maine Community, drawing on earlier precedents.
As relevant to the statutory claim here, the Tucker Act
gives the Court of Federal Claims jurisdiction, and waives
the sovereign immunity of the United States, for money
claims “against the United States founded [upon] . . . any
Act of Congress.” 28 U.S.C. § 1491(a)(1); Maine Commu-
nity, 140 S. Ct. at 1327. Because the Tucker Act “does not
create ‘substantive rights,’” Maine Community, 140 S. Ct.
at 1327, Tucker Act plaintiffs like Sanford and Montana
who sue the United States for damages for a statutory vio-
lation must show that the statute invoked is a “so-called
money-mandating provision[],” id. at 1329, the label used
to identify a “statutory claim [that] falls within the Tucker
Act’s immunity waiver,” id. at 1328.
The Supreme Court in Maine Community explained
that its precedents establish a general rule to govern when
a statutory provision supports a Tucker Act action. That
rule is the “fair interpretation” test. Id. “A statute creates
a right capable of grounding a claim within the waiver of
sovereign immunity if, but only if, it can fairly be inter-
preted as mandating compensation by the Federal Govern-
ment for the damage sustained.” Id. (quotations omitted);
see United States v. Navajo Nation, 556 U.S. 287, 290
(2009); United States v. White Mountain Apache Tribe, 537
U.S. 465, 472 (2003). The Court in Maine Community reit-
erated that “[s]atisfying this rubric is generally both neces-
sary and sufficient to permit a Tucker Act suit for damages
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14 SANFORD HEALTH PLAN v. UNITED STATES

in the Court of Federal Claims.” 140 S. Ct. at 1328. 3 The
Court added that “if a statutory obligation to pay money is
mandatory, then the congressionally conferred right to re-
ceive money will typically display an intent to provide a
damages remedy for the defaulted amount.” Id. at 1328
n.12 (quotations omitted).
Having recited the general rule, the Supreme Court
further explained: “But there are two exceptions.” Id. at
1328. “The Tucker Act yields when the obligation-creating
statute provides its own detailed remedies”—specifically,
“its own judicial remedies.” Maine Community, 140 S. Ct.
at 1328, 1329–30 (citing United States v. Bormes, 568 U.S.
6, 12–13, 15–16 (2012)). And it yields as well “when the
Administrative Procedure Act, 60 Stat. 237, provides an
avenue for relief.” Id. at 1328 (citing Bowen v. Massachu-
setts, 487 U.S. 879, 900–08 (1988)).
B
The Court applied that framework in Maine Commu-
nity to hold that the government was liable for Tucker Act
damages for violating the ACA’s section 1342(b), 124 Stat.
211–212 (codified at 42 U.S.C. § 18062(b)(1)). See 140 S.
Ct. at 1315. In section 1342 of the ACA, Congress stated
that the Secretary of HHS “shall” create a Risk Corridors
program, under which the Secretary “shall” set certain
thresholds used to ensure that both profits and losses
would be limited for insurers that chose to offer insurance
on the new exchanges for the first three years of the ex-
changes. Maine Community, 140 S. Ct. at 1315–16; 124
Stat. at 211–212. “Plans with profits above a certain
threshold would pay the Government, while plans with

3 The Supreme Court had no occasion to discuss sep-
arately the “illegal exaction” branch of Tucker Act jurisdic-
tion. See Boeing Co. v. United States, No. 2019-2148, at 21
n.6 (Fed. Cir. Aug. 10, 2020).
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SANFORD HEALTH PLAN v. UNITED STATES 15

losses below that threshold would receive payments from
the Government.” Maine Community, 140 S. Ct. at 1316.
“Specifically, § 1342 stated that the eligible profitable
plans ‘shall pay’ the Secretary [of HHS], while the Secre-
tary ‘shall pay’ the eligible unprofitable plans.” Id. 4
In each of the three years of the program’s existence,
the money paid in by insurers turned out to be substan-
tially less than the money the Secretary was required by
§ 1342(b)(1) to pay out. Id. at 1317–18. Based on a se-
quence of post-ACA statutory provisions that limited use of
identified appropriations to make such payments, the Sec-
retary declined to pay out more than was received from the
profitable insurers. Id. Several insurers that had chosen
to offer plans on exchanges and suffered losses qualifying
them for receipt of payments sued the United States for the

4 Specifically, the provision commanding the Secre-
tary to pay specified insurers read:
(1) PAYMENTS OUT.—The Secretary shall pro-
vide under the program established under subsec-
tion (a) that if—
(A) a participating plan’s allowable costs for any
plan year are more than 103 percent but not more
than 108 percent of the target amount, the Secre-
tary shall pay to the plan an amount equal to 50
percent of the target amount in excess of 103 per-
cent of the target amount; and
(B) a participating plan’s allowable costs for any
plan year are more than 108 percent of the target
amount, the Secretary shall pay to the plan an
amount equal to the sum of 2.5 percent of the target
amount plus 80 percent of allowable costs in excess
of 108 percent of the target amount.
§ 1342(b)(1), 124 Stat. at 211.
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16 SANFORD HEALTH PLAN v. UNITED STATES

unpaid amounts under the Tucker Act. Id. at 1318. This
court concluded that § 1342 was money-mandating under
the Tucker Act but that the obligation to pay out amounts
more than insurer payments received had been impliedly
repealed or suspended by congressional appropriations
provisions. Moda Health Plan, Inc. v. United States, 892
F.3d 1311, 1320 n.2 (money-mandating conclusion), 1322–
23, 1325 (implied repeal or suspension conclusion) (Fed.
Cir.), rehearing denied, 908 F.3d 738 (2018). The Supreme
Court disagreed with the implied repeal/suspension conclu-
sion and reversed, holding that Tucker Act relief was avail-
able to the insurers. Maine Community, 140 S. Ct. at 1315,
1319, 1331. 5
The Court first held that the “shall pay” language, un-
modified by any relevant qualifying terms, “imposed a legal
duty of the United States that could mature into a legal
liability through the insurers’ actions—namely, their par-
ticipating in the healthcare exchanges.” Id. at 1320. The
Court next explained that, in ACA § 1342, Congress did not
use the often-used tool of “expressly limit[ing] an obligation
to available appropriations or specific dollar amounts.” Id.
at 1322. On that basis the Court held that the obligation
that ripened into a liability upon the insurers’ actions was
“neither contingent on nor limited by the availability of ap-
propriations or other funds,” id. at 1323, nor, therefore,
qualified by the Appropriations Clause of the Constitution,
art. I, § 9, cl. 7, or the Anti-Deficiency Act, 31 U.S.C. § 1341.
Maine Community, 140 S. Ct. at 1321–23. The Court then

5 Like Sanford and Montana here, the plaintiffs in
Maine Community sought Tucker Act relief based on as-
serted implied-in-fact contracts as an alternative to the as-
sertion founded on the statutory payment provision.
Having agreed with the plaintiffs on the statutory ground,
however, the Supreme Court in Maine Community did not
reach the contract ground. 140 S. Ct. at 1331 n.15.
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SANFORD HEALTH PLAN v. UNITED STATES 17

held that the obligation undergirding the liability was not
repealed by the post-ACA appropriations provisions. Id. at
1323–27.
The Court continued by “turn[ing] to a final question:
Where does [the insurers’] lawsuit belong, and for what re-
lief?,” and in answer to the question, the Court held that
the insurers “properly relied on the Tucker Act to sue for
damages in the Court of Federal Claims.” Id. at 1327. The
Court concluded that § 1342 could fairly be interpreted as
mandating compensation and that “neither exception to
the Tucker Act applies.” Id. at 1328. Accordingly, “[t]he
Risk Corridors statute is one of the rare laws permitting a
damages suit in the Court of Federal Claims.” Id. at 1329.
As to the “fair interpretation” general rule, the Court
stressed the “shall pay” language of the statute. The Court
reiterated that “[s]tatutory ‘“shall pay” language’ often re-
flects congressional intent ‘to create both a right and a rem-
edy’ under the Tucker Act.” Id. at 1329 (quoting Bowen,
487 U.S. at 906 n.42). For the Risk Corridors statute,
“[s]ection 1342’s triple mandate—that the HHS Secretary
‘shall establish and administer’ the program, ‘shall provide’
for payment according to the statutory formula, and ‘shall
pay’ qualifying insurers—falls comfortably within the class
of moneymandating statutes that permit recovery of money
damages in the Court of Federal Claims.” Id. The Court
added that “[b]olstering” its conclusion is “§ 1342’s focus on
compensating insurers for past conduct”; the provision does
not “‘subsidize future state expenditures’” but instead
“uses a backwards-looking formula to compensate insurers
for losses incurred in providing healthcare coverage for the
prior year.” Id. (quoting Bowen, 487 U.S. at 906 n.42). 6

6 The Court stated that its conclusion did “not break
new doctrinal ground.” Id. at 1329 n.13. The Court noted
that it and the Federal Circuit both agreed that § 1342 was
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18 SANFORD HEALTH PLAN v. UNITED STATES

As to the two exceptions to Tucker Act applicability, the
Court held that neither exception applied. The ACA “did
not establish a comparable remedial scheme” that would
displace the Tucker Act. Id. at 1330. And the Administra-
tive Procedure Act (APA) did not bar Tucker Act relief be-
cause the claim by the insurers was quite different from
the claim that had been held outside the Tucker Act, and
within the APA, in Bowen. Id. at 1330–31 (“Petitioners do
not ask for prospective, nonmonetary relief to clarify future
obligations; they seek specific sums already calculated,
past due, and designed to compensate for completed la-
bors.”).
C
For the cost-sharing reduction reimbursement provi-
sion at issue here, 42 U.S.C. § 18071(c)(3), we see no suffi-
cient basis for reaching a different conclusion from the
conclusion the Supreme Court drew for the Risk Corridor
provision at issue in Maine Community.
1
Section 18071(c)(3) uses “shall make . . . payments” lan-
guage—“the Secretary shall make periodic and timely pay-
ments to the issuer equal to the value of the reductions”—
that is indistinguishable from the “shall pay” language at
issue in Maine Community and unmodified by limiting lan-
guage. The obligation is to pay money based on the in-
surer’s specified actions—“participating in the healthcare
exchanges” under the statutorily specified conditions,
Maine Community, 140 S. Ct. at 1320. That obligation log-
ically “mature[d] into a legal liability through the insurers’

money-mandating. Id. The Court also stated that the Fed-
eral Circuit “agrees with [the Supreme Court’s] analysis
broadly, having held that ‘shall pay’ language ‘generally
makes a statute money-mandating’ under the Tucker Act.”
Id.
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SANFORD HEALTH PLAN v. UNITED STATES 19

actions” (here, carrying out the specified cost-sharing re-
ductions). Id.
It makes no difference to this conclusion that Congress
did not specifically appropriate money to make the pay-
ments. The government, having initially argued otherwise
in this case (see Appellant’s Opening Br. at 23–32), now
agrees that Maine Community forecloses a contrary conclu-
sion. See Appellant’s Post-Maine Community Supple-
mental Br. at 6. And the government has not argued that
there is a congressional repeal or suspension applicable to
section 18071(c)(3).
Section 18071(c)(3) readily comes within the general
rule for a statute-based claim under the Tucker Act: its lan-
guage “can fairly be interpreted as mandating compensa-
tion by the Federal Government for the damage sustained.”
Maine Community, 140 S. Ct. at 1328 (quotations omitted).
Indeed, its “shall make . . . payments” command, which is
not qualified by limiting language and which follows other
“shall” directives regarding the cost-sharing reduction du-
ties, is materially indistinguishable from the “triple man-
date” of “shall” directives that the Supreme Court held in
Maine Community “falls comfortably within the class of
moneymandating statutes that permit recovery of money
damages in the Court of Federal Claims.” Id. at 1329; see
id. at 1328 n.12 (explaining that “if a statutory obligation
to pay money is mandatory, then the congressionally con-
ferred ‘right to receive money’ will typically display an in-
tent to provide a damages remedy for the defaulted
amount” (citations omitted)); id. at 1329 (explaining that
“‘[s]tatutory “shall pay” language’ often reflects congres-
sional intent ‘to create both a right and a remedy’ under
the Tucker Act” (quoting Bowen, 487 U.S. at 906 n.42)).
Such language may be enough by itself, but the conclu-
sion is “[b]olster[ed]” here, as it was in Maine Community,
by the character of the obligation as “compensating insur-
ers for past conduct,” i.e., as one looking backward to pay
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20 SANFORD HEALTH PLAN v. UNITED STATES

for expenses already incurred. Id. The present lawsuits
are for amounts that Sanford and Montana expended in
2017, for which they claim reimbursement. More gener-
ally, as explained above, supra p. 6, although the statute
provides for the government to advance funds to insurers
to reflect cost-sharing reductions, those are just provisional
transfers; the payment ultimately due under section 18071
is for actual amounts already expended by insurers to carry
out the cost-sharing reductions while paying healthcare
providers so that enrollees received covered services.
Neither of the “two exceptions” recognized by Maine
Community applies here. The ACA does not contain “its
own detailed remedies”—i.e., “its own judicial remedies,”
Maine Community, 140 S. Ct. at 1328, 1329–30—for viola-
tions of section 18071(c)(3). Nor does the APA apply: as in
Maine Community, the insurers here “do not ask for pro-
spective, nonmonetary relief to clarify future obligations;
they seek specific sums already calculated, past due, and
designed to compensate for completed labors.” Maine Com-
munity, 140 S. Ct. at 1330–31. Indeed, in the present ap-
peals, the government made no argument for applicability
of the APA in its opening brief or in its supplemental brief
filed after Maine Community was decided. 7
2
Despite the foregoing straightforward application of
the Maine Community reasoning to the present cases, the
government argues that Maine Community calls for a dif-
ferent result. The government’s premise is that insurers’

7 The government’s reply brief (at 9–10) refers to the
APA only in passing, when arguing that the absence of a
permanent appropriation defeats application of the Tucker
Act. As we have noted, the government abandoned the ap-
propriations-based argument in this court after the deci-
sion in Maine Community.
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SANFORD HEALTH PLAN v. UNITED STATES 21

loss of cost-sharing reduction reimbursements could cause
the insurers to secure (from state regulators) permission to
raise premiums, and that such higher premiums would
lead to higher premium tax credits under section 1401 of
the ACA, offsetting the loss of the cost-sharing reduction
payments. Under the government’s theory, this sequence
is so self-evident and so reliable that we should understand
Congress to have deprived an insurer of the otherwise-
available Tucker Act remedy for non-receipt of the statuto-
rily promised cost-sharing reduction reimbursements for a
period even when the insurer has not received offsetting
premium tax credits for that period. We are not persuaded.
Accepting the government’s contention would require a
marked departure from the Maine Community analysis,
which the Court indicated did not break new ground in
identifying conditions for availability of Tucker Act relief.
The premium tax credit provision does not alter the com-
pelling force of the “shall make . . . payment” language of
section 18071(c)(3), which readily creates an obligation
that matures into a liability upon the insurer’s taking the
prescribed action, and which readily satisfies the test that
a statute “can fairly be interpreted” as compelling compen-
sation for non-payment. Nor does it make the APA appli-
cable. It also does not bring section 18071(c)(3) within the
exception to Tucker Act coverage “when ‘a law assertedly
imposing monetary liability on the United States contains
its own judicial remedies.’” Maine Community, 140 S. Ct.
at 1329–30 (quoting Bormes, 568 U.S. at 12). The premium
tax credit provision does not provide “judicial remedies” at
all, and it therefore is unlike each of the statutory regimes
to which Maine Community pointed in identifying this ex-
ception. 8 Under the background legal principles set forth

8 The Court in Maine Community pointed to the stat-
utes in Bormes and in Horne v. Department of Agriculture,
569 U.S. 513 (2013), both of which provided specifically for
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22 SANFORD HEALTH PLAN v. UNITED STATES

in Maine Community, section 18071(c)(3) comfortably qual-
ifies as a money-mandating provision for which the Tucker
Act supplies a judicial remedy not present in the ACA itself
(or elsewhere).
The existence of the premium tax credit mechanism in
the ACA is not a persuasive reason to infer a congressional
displacement of the Tucker Act remedy. In terms of rem-
edy, the premium tax credit mechanism supplies an alter-
native way for an insurer to try to obtain money (from the
federal government) to offset the loss caused by the govern-
ment’s violation of section 18071(c)(3). The statutory link-
ages of the cost-sharing reduction and premium tax credit
provisions, recounted supra, include nothing that makes
the latter into the sole means of trying to lessen losses from
a violation of the former.
As noted above, section 18082(a)(3) on its face may be
understood to indicate that government payments to insur-
ers for cost-sharing reductions can help lower “premi-
ums”—presumably because insurers might otherwise seek
higher premiums to enable them to pay healthcare provid-
ers the amounts enrollees are not paying due to cost-shar-
ing reductions. If silver plan premiums are increased,
government payment of premium tax credits to insurers
will then rise. But even if section 18082(a)(3) is understood
as implicitly so recognizing, it does not support the govern-
ment’s theory. That understanding suggests, at the most,
that the premium tax credit mechanism is an additional
means for reducing losses, not that this mechanism for re-
ducing losses displaces the otherwise-clearly-available ju-
dicial remedy under the Tucker Act to become the sole
“remedy.”

traditional remedies that included access to court to chal-
lenge specific agency decisions. 140 S. Ct. at 1330.
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SANFORD HEALTH PLAN v. UNITED STATES 23

The government’s conclusion would mean that the
background body of law making the Tucker Act applicable
to section 18071(c)(3) is displaced even for situations in
which, as in the present two cases, the premium tax credit
mechanism does not in fact make up for losses from section
18071(c)(3)’s violation. In such situations, the result would
be to leave the insurer without redress, counter to Maine
Community’s recognition that the Tucker Act remedy gives
effect to the principle that “[t]he Government should honor
its obligations.” 140 S. Ct. at 1331.
Such a result is especially unwarranted because there
is a separate body of law that more precisely addresses the
problem the government identifies. The premise of the gov-
ernment’s argument is that the premium tax credit provi-
sion can indeed lead to partial or complete offsetting of
losses from non-reimbursement of cost-sharing reductions
and that the government should not in effect be charged
twice for a section 18071(c)(3) violation, once through
raised premium tax credits and again through a damages
award under the Tucker Act. But a categorical displace-
ment of the availability of Tucker Act damages actions is
not necessary to avoid such overpayment. Damages law
deals in a more targeted way with matters such as appro-
priate accounting for offsets and avoidance of double recov-
eries, as we conclude today in Community Health Choice,
Inc. v. United States, No. 2019-1633, and Maine Commu-
nity Health Options v. United States, No. 2019-2102. That
body of law accommodates the practical interaction of the
two subsidy mechanisms without departing from the estab-
lished principles governing Tucker Act coverage of pay-
ment-mandating provisions as most recently set forth in
Maine Community.
IV
For the foregoing reasons, we affirm the judgments of
the Court of Federal Claims.
AFFIRMED