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Anthem Blue Cross Plans Sue for $100 Million in Obamacare Money

Nov. 19, 2019, 5:47 PM

Anthem Blue Cross health plans sold on Affordable Care Act exchanges in California, Colorado, Nevada, Georgia, Kentucky, Connecticut, Indiana, Missouri, New York, Ohio, and Wisconsin are suing the U.S. to recover over $100 million in unpaid Obamacare program funds.

The plans agreed to sell plans on the exchanges based on the government’s promise in the ACA to reimburse them for the losses they expected to incur by covering people previously deemed to be too sick to qualify for coverage, they told the U.S. Court of Federal Claims.

But the government reneged on its promise, paying the plans only a fraction of the money they are owed, the plans said in a complaint filed Nov. 18. The plans now seek to recover the balance the government should have paid them for the 2014, 2015, and 2016 plan years, according to the complaint.

The government has admitted it owes Anthem Blue Cross the money, the complaint said.

This is the latest in a series of cases involving the ACA’s risk corridor program. The U.S. Court of Appeals for the Federal Circuit previously rejected claims brought by insurers such as Maine Community Health Options, Moda Health Plans Inc., and the defunct Land of Lincoln Mutual Health Insurance Co.

The court held in those cases that the government had promised in the ACA to repay the insurers’ risk corridor losses, but Congress later clarified that the program was to be budget neutral.

That is, the Health and Human Services Department could pay insurers that lost money only out of the funds it collected from insurers that made money. The HHS wasn’t obligated to pay the insurers in full because it never collected enough money to do so, the court said.

The U.S. Supreme Court will hear oral arguments on the issue Dec. 10. Blue Cross and Blue Shield of North Carolina is a party in the Supreme Court cases.

Causes of Action: Violation of the ACA and its implementing regulations; breach of implied-in-fact contract.

Relief: Damages of at least $107.5 million; interest; attorneys’ fees and costs.

Response: The U.S. Department of Justice doesn’t comment on pending litigation.

Attorneys: Reed Smith LLP represents the Anthem Blue Cross plans.

The case is Blue Cross of Calif. v. United States, Fed. Cl., No. 1:19-cv-1770, filed 11/18/19.

To contact the reporter on this story: Mary Anne Pazanowski in Washington at mpazanowski@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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