U.S. Dist. Judge Orders Disgorgement of Certain ACA Payments

The ACA imposed a Health Insurance Provider Fee (the “HIPF”) on medical providers but exempted the states from paying it. Notwithstanding Congress’s exemption of the states in the ACA, HHS enacted a regulation that empowered a private actuarial board to require states to account for the HIPF in payments to their respective managed care organizations (“MCOs”)—the medical providers who contract with the states to service their Medicaid recipients.  Five states, Texas, Indiana, Kansas, Louisiana, Nebraska, and Wisconsin, challenged this rule and sought disgorgement of the amounts that they had paid. In March, the U.S.D.C. for the North District of Texas (per O’Conner) found that while the regulation was unlawful, the federal government was not required to disgorge the payments made by the five states.

The court subsequently reconsidered its March order.  On Tuesday, the Court ruled that equitable disgorgement was appropriate because:

Courts of equity exist for precisely these situations, to afford complete relief where a strict adherence to the text or precedent governing remedies at law prevents the plaintiff from fully recovering.

It should be noted that Judge O’Connor has:

  • Blocked regulations prohibiting insurers, doctors, or hospitals from discriminating against transgender patients or women with an abortion in their medical history;
  • Issued an injunction blocking the Obama administration’s rules forbidding schools to discriminate based on gender identity, including transgender status;  and
  • Ended 43 years of judicial oversight of desegregation efforts at Richardson, Texas schools.

Judicial appointments have consequences.

2 thoughts on “U.S. Dist. Judge Orders Disgorgement of Certain ACA Payments”

  1. The following may seem like a semantic quibble, but it seems important to me.

    "Judicial appointments have consequences" is a true statement, but almost always the consequences were what was intended. That's because judicial appointments are made by politicians. When a politician appoints a judge there are expectations of what that judge will do, and it's a rare surprise when the appointing official is disappointed.

    The problem we have to deal with is that when we elected that politician, or allowed it to happen by our apathy, then our political failure has consequences. I think it's often that secondary effect that's ignored by the ostriches among us who would bury their heads in the sand, proclaiming "none of those candidates are satisfactory to me."

    1. My impression is that there used to be more surprises. But in recent decades the vetting (by private entities before nomination) has gotten extraordinarily thorough.

      And it also seems that it doesn't matter much whether lower-level judges are particularly good at cobbling together a scaffolding of legal reasoning around the result they want to achieve, because so few cases make it through appeal.

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