1

In the United States Court of Federal Claims 

No. 16-967C

(Filed: July 31, 2017)

* * * * * * * * * * * * * * * * * * * * * * * * * *

MAINE COMMUNITY HEALTH OPTIONS, 

Plaintiff,

v.

THE UNITED STATES,

Defendant.

* * * * * * * * * * * * * * * * * * * * * * * * * *

Stephen McBrady, Washington, DC, for plaintiff. Daniel Wolff and

Xavier Baker, of counsel.

Marc S. Sacks, United States Department of Justice, Commercial 

Litigation Branch, Civil Division, Washington, DC, for defendant. Charles 

E. Canter, Terrance A. Mebane, Frances M. McLaughlin, L. Misha 

Preheim, and Phillip M. Seligman, of counsel. Also on the briefs were 

Chad A. Readler, Acting Assistant Attorney General, Ruth A. Harvey, 

Director, Kirk T. Manhardt, Deputy Director. 

OPINION

BRUGGINK, Judge.

This is a claim for statutory entitlement to payment under the “Risk 

Corridors Program” (“RCP”) created by section 1342 of the Affordable 

Care Act (“ACA”), codified at 42 U.S.C. § 18062 (2012) (“section 1342”). 

The RCP is in essence a program in which insurers, and potentially the 

government, share both the risk and reward inherent in setting plan 

premiums. Plaintiff, Maine Community Health Options (“CHO”) is a nonprofit corporation with its principal place of business in Lewiston, Maine. 

Money mandating 

statute; Affordable Care 

Act; Risk Corridors 

Program; 42 U.S.C. § 

18062; Appropriations

riders; Limitation on use 

of funds. 
2

It provides health insurance to its members under the federally-facilitated 

market place in Maine and New Hampshire. CHO is approved by the 

Centers for Medicare and Medicaid Services (“CMS”) to offer qualified 

health care plans (“QHPs”). Plaintiff alleges that it is owed but has not been 

paid approximately $23 million under the RCP program for program years 

2014 and 2015. CHO filed a motion for summary judgment on November 

3, 2016. Defendant filed its opposition and moved for dismissal under 

Rules 12(b)(1) and 12(b)(6) on January 13, 2017. In an order dated March 

9, 2017, we denied defendant’s motion to dismiss for lack of jurisdiction 

and ripeness and preserved the remaining issues raised in plaintiff’s motion 

for summary judgment and defendant’s motion to dismiss for failure to 

state a claim. We also asked for additional targeted briefing. That briefing 

is complete. Supplemental oral argument was heard on July 24, 2017. 

We conclude that Congress timely barred the use of appropriated 

funds to pay any amounts due under the RCP program beyond those 

collected from participating health care insurers. That conclusion makes it 

unnecessary to pursue defendant’s alternative argument that the statute 

cannot be construed to make the government a guarantor of deficiencies in 

collections under the risk corridors program. 

BACKGROUND

The general way in which the program operates is that insurers 

whose costs for a calendar year exceed a target amount are entitled to a 

payment to partially recoup those expenses. Insurers whose costs are below 

the target amount pay a percentage of that delta into the program. The 

target amount is set with regard to the premiums established for each year. 

In this way, all participating insurers share in the risk and reward of setting 

premiums too high or too low. This lawsuit poses the question of whether 

the government has obligated itself to share in the risk by making up the 

difference when payments into the program fail to satisfy the amounts 

owed to insurers whose costs exceed the target. 

There is only one count in the complaint: “Violation of Statutory and 

Regulatory Mandate to Make Payments.” Plaintiff moved for summary 

judgment on that count, arguing that section 1342 mandates payment by the 

Department of Health and Human Services (“HHS”) on a yearly basis if 

qualifying costs exceed a certain amount, and it is undisputed that 

plaintiff’s costs did exceed that amount in the years 2014 and 2015.1

 1 Although the RCP applies to calendar years 2014, 2015, and 2016, any 
3

Defendant does not dispute that the amounts plaintiff calculated on a 

yearly basis are correct. Instead it moves for dismissal for failure to state a 

claim for two legal reasons. First, defendant argues that Congress intended 

the RCP to be “budget neutral,” meaning that section 1342 limits the 

government’s payment obligations to the amounts collected from insurers 

whose costs are below the target amount and who therefore have paid into 

the RCP. If HHS collects less from insurers who must pay into the program 

than it owes to insurers who are due payment, then, according to defendant, 

the government is under no obligation to make up the difference with other 

funding sources. In sum, while section 1342 mandates the payment of 

money by HHS, that obligation is limited to the fees collected by the 

program. There is no underwriting by the government of deficits generated 

by the program.

Defendant’s second and independent argument is that, even if the 

statutory language of the RCP provisions is construed to create an openended obligation on the part of the federal government to make up the 

deficits in the operation of the risk corridors, Congress timely barred the 

use of any appropriated funds other than fees collected in appropriations

riders in 2014 and 2015 and that expression of congressional intent trumps 

any different obligation arguably created by section 1342.

In response, plaintiff asserts that Congress’ failure to amend or 

repeal the RCP reflects that it was not intended to be budget neutral when it 

was originally passed and remains so today. Plaintiff also argues that the 

appropriations riders were not effective to limit the government’s liability 

under the statute because section 1342 had already created an obligation 

before the riders were passed. Plaintiff urges that the riders should not be 

read to have retrospective effect.

Four other judges of this court have considered these and similar 

arguments. All found jurisdiction and that the claims were not premature. 

Blue Cross & Blue Shield of N.C. v. United States, 131 Fed. Cl. 457 (2017);

Moda Health Plan, Inc. v. United States, 130 Fed. Cl. 436 (2017); Health 

Republic Ins. Co. v. United States, 129 Fed. Cl. 757 (2016); Land of 

Lincoln Mut. Health Ins. Co. v. United States, 129 Fed. Cl. 81 (2016). 

 

payment due for 2016 would not be calculated until July 2017, thus it could 

not have been included in the complaint.
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Three of the judges went on to address the merits of insurers’ claims and 

the government’s defense of failure to state a claim. Two judges arrived at a 

different conclusion than the third. Compare Land of Lincoln, 129 Fed. Cl. 

at 108 (holding that the statute was ambiguous and deferring to the 

agency’s interpretation that payments need neither be made yearly nor in 

any amount over what HHS collects under the program), and Blue Cross, 

131 Fed. Cl. at 475 (holding that the plain language of the statute and 

regulation do not create an annual deadline to make RCP payments), with 

Moda, 130 Fed. Cl. at 455, 460-65 (holding, inter alia, that the statute is not 

budget-neutral and that the appropriations riders did not vitiate HHS’ yearly 

payment obligation). Here, we have already held that section 1342 is 

money mandating, although we preserved defendant’s contention that the 

mandate is capped by fees received. See Maine Cmty. Health Options v. 

United States, No. 16-967C (Fed. Cl. Mar. 9, 2017) (order denying Def.’s 

Mot. to Dismiss for lack of jurisdiction). 

I. LEGISLATIVE HISTORY

We begin with some of the legislative history of the act, which is 

illustrative of the history of the particular provisions at issue. On September 

17, 2009, the Senate Committee on Health, Education, Labor, and Pensions 

reported its version of the ACA to the floor. S. 1679, 111th Cong. § 142. 

This version included an express provision that authorized HHS to use 

money in the Treasury for RCP payments to QHP issuers.2 Over a month 

later, the Senate Committee on Finance subsequently reported its own 

version of the legislation. S. 1796, 111th Cong. § 1001 (2009). This version 

contained no reference to funding the RCP and modeled more closely the 

language eventually adopted in section 1342 of the ACA. Id.

Once the final draft of the ACA was prepared, the Congressional 

Budget Office (“CBO”) released its budget scoring on March 20, 2010, 

notably omitting the RCP from the scoring and attributing no expenses to it. 

Letter from Douglas W. Elmendorf, Director, Cong. Budget Office, to 

Nancy Pelosi, Speaker, House of Representatives, Tbl. 2 (March 20, 2010). 

 2 “(B) FUNDING.—There is hereby appropriated to the Start-Up Fund, out 

of any moneys in the Treasury not otherwise appropriated an amount 

requested by the Secretary of Health and Human Services as necessary to—

. . . (iii) make payments under paragraph (3).” S.1679 § 3106(c)(1)(B). 

Paragraph 3 would have created a risk corridor program.
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Congress relied on the CBO’s report in passing the ACA, as stated in the 

legislation itself, “(1) [b]ased on . . . (CBO) estimates, this Act will reduce 

the Federal deficit between 2010 and 2019. (2) CBO projects this Act will 

continue to reduce budget deficits after 2019.” Pub. L. No. 111-148, § 

1563(a), 124 Stat. 270; see also Land of Lincoln, 129 Fed. Cl. at 104.

On March 23, 2010, the ACA became law, including section 1342, 

which states:

(a) In general. 

The Secretary shall establish and administer a program of risk 

corridors for calendar years 2014, 2015, and 2016 under 

which a qualified health plan offered in the individual or 

small group market shall participate in a payment adjustment 

system based on the ratio of the allowable costs of the plan to

the plan’s aggregate premiums. Such program shall be based 

on the program for regional participating provider 

organizations under part D of title XVIII of the Social 

Security Act [42 USCS §§ 1395w-101 et seq.].

(b) Payment methodology.

(1) Payments out. The Secretary shall provide under the 

program established under subsection (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 Secretary shall pay to 

the plan an amount equal to 50 percent of the target 

amount in excess of 103 percent 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.

(2) Payments in. The Secretary shall provide under the 

program established under subsection (a) that if--
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(A) a participating plan’s allowable costs for any plan 

year are less than 97 percent but not less than 92 

percent of the target amount, the plan shall pay to the 

Secretary an amount equal to 50 percent of the excess 

of 97 percent of the target amount over the allowable 

costs; and

(B) a participating plan’s allowable costs for any plan 

year are less than 92 percent of the target amount, the 

plan shall pay to the Secretary an amount equal to the 

sum of 2.5 percent of the target amount plus 80 percent 

of the excess of 92 percent of the target amount over 

the allowable costs.

42 U.S.C. § 18062. The statute is silent here and elsewhere as to funding 

for the payments out other than the implication that the payments in could 

be used in that manner.

II. REGULATORY FRAMEWORK

The details of how the RCP would be administered and when 

payments were due or would be made were largely left to HHS. It 

published a final payment rule on March 23, 2012, stating in relevant part:

(a) General requirement. A QHP issuer must adhere to the 

requirements set by HHS in this subpart and in the annual 

HHS notice of benefit and payment parameters for the 

establishment and administration of a program of risk 

corridors for calendar years 2014, 2015, and 2016.

(b) HHS payments to health insurance issuers. QHP issuers 

will receive payment from HHS in the following amounts, 

under the following circumstances:

(1) When a QHP’s allowable costs for any benefit year 

are more than 103 percent but not more than 108 

percent of the target amount, HHS will pay the QHP 

issuer an amount equal to 50 percent of the allowable 

costs in excess of 103 percent of the target amount; 

and

(2) When a QHP’s allowable costs for any benefit year 

are more than 108 percent of the target amount, HHS 
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will pay to the QHP issuer 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.

(c) Health insurance issuers’ remittance of charges. QHP 

issuers must remit charges to HHS in the following amounts, 

under the following circumstances:

(1) If a QHP’s allowable costs for any benefit year are 

less than 97 percent but not less than 92 percent of the 

target amount, the QHP issuer must remit charges to 

HHS in an amount equal to 50 percent of the 

difference between 97 percent of the target amount and 

the allowable costs; and

(2) When a QHP’s allowable costs for any benefit year 

are less than 92 percent of the target amount, the QHP 

issuer must remit charges to HHS in an amount equal 

to the sum of 2.5 percent of the target amount plus 80 

percent of the difference between 92 percent of the 

target amount and the allowable costs.

(d) Charge submission deadline. A QHP issuer must remit 

charges to HHS within 30 days after notification of such 

charges.

45 C.F.R. § 153.510 (2012); 78 Fed. Reg. 15,410, 15,531 (Mar. 11, 2013) 

(adding subsection (d)). At the same time, HHS also published an impact 

analysis of the new regulation. 77 Fed. Reg. 17,220, 17,243 (Mar. 23, 

2012). It stated: 

CBO estimates that risk adjustment payments and collections 

are equal in the aggregate . . . . CBO did not score the impact 

of the risk corridors program, but assumed collections would 

equal payments to plans in the aggregate. The payments and 

receipts in risk adjustment and reinsurance are financial 

transfers between issuers and the entities running those 

programs.

Id. At 17,244.
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III. AGENCY ACTION

The seemingly definitive statement notwithstanding, in the years 

following the adoption of its final rule, HHS took less-than-consistent 

positions with respect to whether the RCP would be implemented in a 

budget-neutral manner. During the comment and answer period for the 

2013 final rule, HHS stated that “[t]he risk corridors program is not 

statutorily required to be budget neutral. Regardless of the balance of 

payments and receipts, HHS will remit payments as required under section 

1342 of the Affordable Care Act.” 78 Fed. Reg. at 15,473. Later, however, 

in its 2015 payment rule comment and answer, HHS stated it “intend[ed] to 

implement [RCP] in a budget neutral manner, and may make future 

adjustments, either upward or downward to this program (for example, . . . 

[HHS] may modify the ceiling on allowable administrative costs) to the 

extent necessary to achieve this goal.” 79 Fed. Reg. 13,744, 13,787 (Mar. 

11, 2014). One month later, HHS issued a bulletin outlining a pro rata 

approach for “payments out” if the “payments in” were not sufficient and 

promising that it would issue further guidance on risk corridor payments if 

the collections did not cover them entirely at the conclusion of the threeyear program. Pl.’s Mot. Summ. J. Addendum A Doc. 5. HHS confirmed 

on two other separate occasions its intent for the RCP to be budget neutral 

over the course of the three-year program; yet it simultaneously recognized 

that, if there is a shortfall, “the Affordable Care Act requires the Secretary 

to make full payments to issuers,” and “HHS will use other sources of 

funding for the risk corridors payments, subject to the availability of 

appropriations.” 79 Fed. Reg. 30,240, 30,260 (May 27, 2014); 80 Fed. Reg. 

10,750, 10,779 (Feb. 27, 2015).

On October 1, 2015, HHS announced that it would only be able to 

pay 12.6% of amounts due for 2014 due to lower payments in than 

requested payments out. Approximately one month later, HHS 

communicated that it owed $241,717 to CHO, but would only be paying the 

pro-rated amount of $30,499.53. On the same day, however, HHS also 

informed QHP issuers that all unfulfilled payments out for the RCP were 

required to be paid in full and would be treated as fiscal year 2015 

obligations for the government. The following year, HHS notified QHP 

issuers that it would allocate the full amount of collections for benefit year 

2015 toward benefit year 2014 payments and use benefit year 2016 

collections to satisfy everything that remained, although it concluded that 

any outstanding payments at the end of the three-year program would be 
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“subject to the availability of appropriations.” Pl.’s Mot. Summ. J. 

Addendum A Doc. 11.

In summary, HHS has attempted to maintain the general position 

that the RCP is not statutorily required to be budget neutral, but that HHS 

intended to implement it in a budget neutral manner. According to its 

interpretation, any additional payments owed but not covered by the RCP 

would be paid subject to the availability of appropriations. 

IV. APPROPRIATIONS RIDERS

Both parties acknowledge that the chronology of events is especially 

critical, particularly pertaining to the appropriations riders. As CHO noted 

and the government agreed, the earliest possible HHS payments to QHP 

issuers could not occur before July 2015, when plaintiff submitted its cost 

information for benefit year 2014 to HHS. See Oral Arg. Tr. 54-55 (Feb. 

15, 2017); Def.’s Suppl. Br. 8. HHS set a deadline of July 31, 2015 for 

insurers to submit premium and cost data for the preceding calendar year to 

HHS, and it set a deadline of August 1, 2016, for the 2015 calendar year. It 

began making payments for the proceeding years in December of 2015 and 

2016. 

In February 2014, prior to any plan data and payments, Congress 

asked the Government Accountability Office (“GAO”) to determine what 

sources of funding would be available when RCP payments were due to 

QHP issuers. U.S. Gov’t Accountability Office, GAO Op. B-325630, 

Department of Health and Human Services--Risk Corridor Program 1 

(2014). GAO responded that the CMS Program Management (“PM”) 

appropriation, essentially the operating budget, and “user fees” (RCP 

collections) could be used to make payments, but only if the appropriations 

from fiscal year 2014 were re-enacted.3 Id. at 4-5. The GAO report did not 

mention any other sources of funding as available to the program.

On December 16, 2014, Congress adopted an appropriation for fiscal 

 3 Re-enactment was required because “[a]n appropriation in a regular, 

annual appropriation law may be construed to be permanent or available 

continuously only if the appropriation . . . expressly provides that it is 

available after the fiscal year covered by the law in which it exists.” 31 

U.S.C. § 1301(c) (2012). This appropriation did not expressly provide such 

an availability.
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year 2015. Beyond deciding not to adopt the same language as the previous 

year, Congress affirmatively prevented CMS Program Management funds 

from being used to satisfy an obligations under the RCP. The appropriation 

states:

None of the funds made available by this Act from the 

Federal Hospital Insurance Trust Fund or the Federal 

Supplemental Medical Insurance Trust Fund, 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).

Consolidated and Furthering Continuing Appropriations Act 2015, Pub. L. 

No. 113-235, div. G, title II, § 227, 128 Stat. 2130, 2491 (2014). The 

Chairman of the House Committee on Appropriations explained the 

reasoning behind this measure:

In 2014, HHS issued a regulation stating that the risk corridor 

program will be budget neutral, meaning that the federal 

government will never pay out more than it collects from 

issuers over the three year period risk corridors are in effect. 

The agreement includes new bill language to prevent the 

CMS Program Management appropriation account from 

being used to support risk corridors payments.

160 Cong. Rec. H9838 (daily ed. Dec.11, 2014). Congress thus expressly 

barred the use of appropriated funds for RCP payments and implicitly 

limited HHS to user fees funds to satisfy RCP payments.

Congress adopted an identical appropriation limitation the following 

year, which further included the following:

In addition to the amounts otherwise available for ‘‘Centers 

for Medicare and Medicaid Services, Program Management’’, 

the Secretary of Health and Human Services may transfer up 

to $305,000,000 to such account from the Federal Hospital 

Insurance Trust Fund and the Federal Supplementary Medical 

Insurance Trust Fund to support program management 

activity related to the Medicare Program: Provided, that 
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except for the foregoing purpose, such funds may not be used 

to support any provision of Public Law 111–148 or Public 

Law 111–152 (or any amendment made by either such Public 

Law) or to supplant any other amounts within such account.

Consolidated Appropriations Act, 2016, Pub. L. No. 114-113, div. H, title 

II, §§ 225-226, 129 Stat. 2242, 2624-25 (2015). The import is that extra 

funds appropriated to Medicare’s operating budget could not be used to 

meet other obligations created by the ACA, such as the RCP. Similar to the 

year before, a Senate Committee Report detailed that this appropriation 

rider was aimed at protecting discretionary funds (operating funds) from 

being used for RCP payments because that was never their intended 

purpose. S. Rep. No. 114-74, at 12 (2015). 

DISCUSSION

Insofar as relevant here, the Tucker Act gives this court jurisdiction 

to hear claims for money against the United States founded upon any Act of 

Congress or any regulation. 28 U.S.C. §1491(a)(1) (2012). As the 

Supreme Court has made clear, however, the Tucker Act is merely 

jurisdictional; it is not a grant of substantive rights. United States v. Testan, 

424 U.S. 392, 398 (1976). A successful plaintiff must point to a source in 

substantive law that creates liability. “[A] waiver of the traditional

sovereign immunity ‘cannot be implied but must be unequivocally 

expressed,’” Id. at 953-54 (citing United States v. King, 395 U.S. 1, 4 

(1969)). 

I. Statutory Interpretation

Plaintiff believes that this court’s inquiry begins, and more 

importantly, ends with the text of section 1342’s payment out provision, 

which states:

(1) Payments out. The Secretary shall provide under the 

program established under subsection (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 Secretary shall pay to 

the plan an amount equal to 50 percent of the target 
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amount in excess of 103 percent 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.

42 U.S.C. § 18062(b) (emphasis supplied). The use of “shall pay” creates 

an enforceable obligation, according to plaintiff.

As we held previously, there is no question that the statute 

commands payment of money by the Secretary. Thus the court has 

jurisdiction to decide whether plaintiff is entitled to payment, but whether 

the government’s payment obligation is limited in some way by other 

provisions or by subsequent legislation remains unanswered by the 

language quoted above. The government urges that it is limited by both. 

The question generally stated then is whether the RCP contemplates merely 

a divvying up of fees received or if the Treasury is obligated to make up 

any difference. Defendant urges that Congress did not intend to obligate 

any payment of money beyond what is collected under the program and 

that, in any event, it expressly limited the funds available to make RCP 

payments in appropriation legislation. We do not reach the first issue 

because the answer to the second question is clear. Congress controls the 

purse. Within certain limitations, which we find not to be relevant here, it 

has the right to nullify what would otherwise appear to be binding 

commitments, and it did so here. 

II. Statutory Amendment Via Appropriation

We hold that Congress clearly and timely expressed its intention that 

public funds not be used to pay deficiencies arising under section 1342, at 

least for fiscal years 2015 and 2016. While the application of this fact is 

complicated in part by the lack of symmetry between the program years, 

which operate on a calendar basis, and fiscal years, which run from October 

1 to September 30, it is undisputed that the appropriations riders at issue 

were adopted prior to what we view as the key dates: the end of benefit year 

2014 and the end of benefit year 2015. We are thus not confronted with a 
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situation in which the interdict comes after the entitlement is fixed.4 

We begin with the proposition that Congress’ power to spend, or not, 

is unimpeded by its earlier actions. This axiom of federal law has 

consequences as applied to the interplay between substantive legislation, 

such as the ACA, and the appropriations needed to fund it. The relevant 

principles are drawn from a few key decisions of the Supreme Court. 

In United States v. Mitchell, 109 U.S. 146 (1883), an Indian 

interpreter for the Secretary of the Interior claimed he had not been paid his 

statutory salary. Congress had in 1834 dictated a salary of $400 per year. 

Yet Mr. Mitchell, who worked between 1878 and 1882, had been paid only 

$300 per year. Beginning in 1877, Congress had, in its annual 

appropriations for Indian affairs, specifically limited salaries for individuals 

like Mr. Mitchell to $300 per year. The Court observed the following:

We find, therefore, this state of legislation: by the Revised 

Statutes, the salaries of interpreters were fixed . . . at $400 . . . 

. By the acts in force during the appellee’s term of service, 

the appropriation for the annual pay of interpreters was $300 

each, and a large sum was set apart for their additional 

compensation, to be distributed by the Secretary of the 

Interior at his discretion.

This course of legislation . . . distinctly reveals a change in 

the policy of Congress on this subject–namely that instead of 

establishing a salary for interpreters at a fixed amount and 

cutting off all other emoluments and allowances, Congress 

intended to reduce the salaries and place a fund at the disposal 

of the Secretary of the Interior. 

Id. at 149. 

The Court noted that it did not have before it a simple case of a 

failure to appropriate sufficient funds to cover an obligation: “On the 

contrary, in this case Congress has in other ways expressed its purpose to 

reduce for the time being the salaries of interpreters.” Id at 150. The court 

found that his salary was fixed by the subsequent appropriation acts and not 

 4 Thus plaintiff’s concerns regarding retroactivity are not implicated.
14

the earlier 1834 act. 

A similar result obtained in United States v. Dickerson, 310 U.S. 554 

(1940). Congress in 1922 had authorized the payment of an enlistment 

bonus to every soldier who re-enlisted within three months after the date of 

his discharge. The plaintiff had been honorably discharged at the 

termination of his enlistment in July 1938. He re-enlisted one day later. He 

was denied a bonus, however, because in June 1938 Congress, in a 

resolution appended to an appropriations bill, directed that no part of any 

appropriation for the fiscal year ending June 30, 1939, could be used to pay 

re-enlistment bonuses, “notwithstanding” the prior statute. Id. at 555. The 

Court of Claims ruled in favor of the soldier, on the grounds that the prior 

legislation had not been repealed. The Supreme Court reversed. It held that 

“[t]here can be no doubt that Congress could suspend or repeal the 

authorization contained in Section 9, and it could accomplish its purpose by 

an amendment to an appropriation bill, or otherwise.” Id. (citing Mitchell, 

109 U.S. at 150). Because of sloppy legislative drafting, the Court was 

confronted with the argument that the resolution was not phrased in a clear 

enough manner to warrant setting aside the bonus. A review of the 

legislative history of the provision persuaded the Court that Congress’ 

intent was clear. 

Although it involved application of the Compensation Clause of 

Article III, § 1, United States v. Will, 449 U.S. 200 (1980), also assists the 

government here. The primary question there was whether Congress had 

timely intercepted judicial pay raises before they took effect at the 

beginning of four different calendar years. While the protection afforded by 

the Compensation Clause is not relevant here, the Court’s observations 

about how to implement subsequent appropriations limitations if they 

undercut substantive provisions offer us guidance. Although repeals by 

implication are disfavored, particularly if they arise in appropriations 

legislation, Congress can suspend or repeal a statute in force by an 

amendment to appropriations bill. Id. at 222 (citing Mitchell, 109 U.S. at 

150). The “whole question depends on the intention of Congress as 

expressed in the statutes.” Id. Because Congress’ intent in Will was 

unmistakable, the only limitation on its power to reverse the pay increases 

was the Compensation Clause, which only applied in two of the years at 

issue; “[t]o say that Congress could not alter a method of calculating 

salaries before it was executed would mean the Judicial Branch could 

command Congress to carry out an announced future intent as to a decision 
15

the Constitution vest exclusively in the Congress.” Id. at 228.

These three cases establish that Congress can effect a change to a 

substantive obligation that was earlier created through language in 

subsequent appropriations legislation. Thus the “shall pay” language of 

section 1342 is not dispositive in the face of two appropriations riders that 

limit the sources of funding for that obligation. We must therefore parse 

those appropriations to answer the question. 

III. The Effect Of The Appropriations Legislation

Given that section 1342’s payments in and payments out are 

accounted for on a yearly basis, the amount owed by or owed to an insurer 

in the RCP cannot be known until the end of the plan year after all of the 

expenses for that year are accounted for. The plan years correspond to 

calendar years. Thus the government’s liability to any particular insurer for 

a particular year cannot be known until the last day of that calendar year.5

 

Congress passed the two relevant appropriations provisions in 

December of 2014 and 2015. The 2014 bill applies by its terms to fiscal 

year 2015, and the 2015 bill applies to fiscal year 2016. The government’s 

fiscal year begins in October of the preceding calendar year. Thus, for the 

2014 plan year (calendar year), even assuming that payment could be made 

as soon as costs were completely fixed on the final day of the year, any 

federal funds necessary to make RCP payments would come from 2015 

fiscal year funds. The same is true for the following year (2015 payments 

could only be made from fiscal year 2016 funds). Thus we find that 

Congress timely intercepted its RCP obligations in those years by passing 

the appropriations provisions in December of each year. 

Obligation necessarily precedes payment, and the obligation here 

matured at the end of benefit year 2014. This is because HHS was required 

to collect an entire year of data before compiling the information and 

determining RCP payment amounts. See 42 U.S.C. § 18062; 45 C.F.R. § 

153.510. Once the benefit year concluded, the data was theoretically final, 

needing only to be reported and interpreted to ascertain what obligations 

 5 Or perhaps even beyond that date since, as defendant pointed out during 

oral argument, insurance claims are regularly submitted for a plan year 

during the first few months of a subsequent year.
16

existed within the RCP.

The effect of these riders was to prevent HHS from using its CMS 

operating fund to meet any government liability created by the RCP. This 

left HHS with only the user fees as available to make RCP payments. 

Plaintiff has not suggested an alternative source of funding for these 

payments, and we think for good reason. Other federal funds available to 

HHS are specifically set aside to pay benefits under Medicare and 

Medicaid. In order to touch those pools of money, Congress must expressly 

direct some other use for those funds. Plaintiff argues instead, citing several 

Court of Claims decisions, that the source of the funding is immaterial once 

the obligation is created. The Judgment Fund can be used to make up a 

shortfall, posits plaintiff. As we explained earlier, however, the law in this 

regard is not so simple. Congress can limit or forestall the payment of 

obligations it has earlier created through subsequent legislation, even by 

means of appropriations legislation. 

The decisions of the Court of Claims and the Federal Circuit are 

largely consistent. Although the result in Norcross v. United States, 142 Ct. 

Cl. 763 (1958), was favorable to the complainant, the court’s reasoning 

does not dictate the result plaintiff wishes for here. A congressman had 

employed a clerk in his office, unaware that she was an Austrian citizen. 

Congress had adopted in 1952 an appropriations rider that placed limits, 

during that fiscal year, on hiring foreign nationals. Plaintiff had been 

employed in February 1952. The case was not heard until 1958, a year in 

which, as Judge Jones noted, the limitations no longer had effect because, 

“the restriction does not apply to funds appropriated by a subsequent 

Congress, unless the restriction were again attached,” which it was not. He 

then helpfully suggested to his former colleagues in Congress that there 

was no reason “why a subsequent Congress may not pay the reasonable 

value of services actually rendered even though the funds of the 1952 

appropriation act could not be used.”6 Id. at 766. Despite the creative result, 

the point remains that Congress’ subsequent directions, expressed even in 

appropriations riders, can control prior promises. 

Another opinion by Judge Jones, Gibney v. United States, 114 Ct. 

 6 Judge Jones acknowledged “some difference of opinion” as to his 

reasoning, but noted, citing scripture, that the court agreed she should be 

paid. Id. at 767.
17

Cl. 38 (1949), dealt with an attempt to limit the government’s liability for 

overtime pay. The legislative restriction provided that “none of the funds 

appropriated for the Immigration and Naturalization Service shall be used 

to pay compensation for overtime services other than as provided in the 

Federal Employees Pay Act of 1945.” Id. at 48-49. In ruling for the 

employee, Judge Jones explained that

The judgment of a court has nothing to do with the means--

with the remedy for satisfying a judgment. It is the business 

of courts to render judgments, leaving to Congress and the 

executive officers the duty of satisfying them. Neither is a 

public officer’s right to his legal salary dependent upon an 

appropriation to pay it. Whether it is to be paid out of one 

appropriation or out of another; whether Congress appropriate 

an insufficient amount, or a sufficient amount, or nothing at 

all, are questions which are vital for the accounting officers, 

but which do not enter into the consideration of a case in the 

courts. 

Id. at 52. The court explained that “a pure limitation on an appropriation 

bill does not have the effect of either repealing or even suspending an 

existing statutory obligation any more than the failure to pay a note in the 

year in which it was due would cancel the obligation stipulated in the note.” 

Id. at 50-51. Judge Jones distinguished Dickerson by explaining that, unlike 

the legislation in Gibney, which it viewed as strictly a limitation on the use 

of particular funds for a particular year, the history of the legislation in 

Dickerson demonstrated a clear intent to suspend the legislative 

authorization. In the case at bar, it is precisely the demonstrated clear 

Congressional intent that prevents the payment of federal funds to make 

RCP payments. 

The Federal Circuit has had occasion twice to address Congress’ 

dealings with “payments in lieu of taxes.” The first was Highland FallsFort Montgomery Central School District v. United States, 48 F.3d 1166 

(Fed. Cir. 1995). There the court noted that Congress had, beginning in 

1950, continually re-authorized a program of compensating local school 

districts for the loss of property tax revenue due to the presence of large 

federal military installations. The statute provided that, “the local 

educational agency shall be entitled to receive for such fiscal year such 

amount as, in the judgment of the Secretary [of Education], is equal to the 
18

[financial burden imposed.]” 20 U.S.C. § 237(a)(2) (1988 & Supp. V 1993) 

(repealed 1994). There were other provisions that provided subsidies under 

other, related circumstances. The statute recognized, however, the 

possibility that appropriations might be insufficient to fully fund all the 

eligible recipients under any of the applicable provisions. In that case, a 

recipient under section 237 was not only given priority, it was assured “100 

percentum of the amount to which it is entitled as computed under that 

section.” Id. § 240(c) (repealed 1994). Despite that provision, from 1989 to 

1993, Congress did not appropriate sufficient funds to fully fund the 

program, and it further capped the amount payable to section 237 recipients 

at $15 million. The Department of Education followed those appropriation 

restrictions rather than the language of section 240. 

The Federal Circuit endorsed DOE’s approach:

[W]e have great difficulty imagining a more direct statement 

of congressional intent than the instructions in the 

appropriations statutes at issue here. For example, the 

appropriation statue for fiscal year 1989 stated: “$15,000,000 

shall be for entitlements under section 2 [Sec. 237] of said 

Act.”

Highland Falls, 48 F.3d at 1170. 

Moreover, the circuit court relied on two statutory provisions which 

it viewed as controlling. 31 U.S.C. § 1341(a)(1)(A) (2012) provides that 

“[a]n officer or employee of the United States Government . . . may not . . . 

make or authorize an expenditure . . . exceeding an amount available in an 

appropriation . . . for the expenditure.” Also, 31 U.S.C. § 1532 states that an 

“amount available under law may be withdrawn from one appropriation 

account and credited to another . . . only when authorized by law.” In other 

words, an agency may not spend more money than Congress authorizes for 

it to use on a particular program, nor may it cannibalize one reticule to 

supplement another. 

In Prairie County v. United States, 782 F.3d 685 (2015), the Federal 

Circuit had occasion to revisit the payment in lieu program. It recognized 

that “[i]t has long been established that the mere failure of Congress to 

appropriate funds, without further words modifying or repealing, expressly 

or by clear implication, the substantive law, does not in and of itself defeat 
19

a Government obligation created by statute.” Id. at 689 (quoting N.Y. 

Airways v. United States, 369 F.2d 743, 748 (Ct. Cl. 1966)).7 Nevertheless, 

the court in Prairie County noted that Congress had spoken clearly when it 

wrote in 31 U.S.C. § 6906 that, “notwithstanding any other provision of this 

chapter no funds may be made available except to the extent provided in 

advance in appropriation Acts.” 782 F.3d at 690.

In Prairie County the court distinguished several cases cited by 

plaintiff in this cases: Salazar v. Ramah Navajo Chapter, 567 U.S. 182 

(2012), and Cherokee Nation of Oklahoma v. Leavitt, 543 U.S. 631 (2005). 

As the Prairie County court stated, where a government contract obligation 

exists, the government may be compelled to pay more than it originally 

appropriated. 782 F.3d at 687. This differs, however, from cases involving 

a benefits program because “there is greater room in benefits programs to 

find the government’s liability limited to the amount appropriated.” Id. at 

689 (quoting Greenlee County v. United States, 487 F.3d 871, 879 (Fed. 

Cir. 2007)). Accordingly, Ramah and Leavitt are not controlling and the 

court’s reasoning in Prairie County aligns with how we view similar 

precedent here.

Further, we agree with defendant that Slattery v. United States, 635 

F.3d 1298 (Fed. Cir. 2011), and United States v. Langston, 118 U.S. 389 

(1886), do not lead to a different result. Slattery involved a contract claim 

against a non-appropriated fund instrumentality, and the court was 

presented with a question of jurisdiction. While it is true that the absence of 

general appropriations supporting the Federal Deposit Insurance 

Corporation did not deter the Federal Circuit from finding jurisdiction and 

potential liability, the court did not speak to the issue relevant here. In the 

present action, the remaining question is not the court’s jurisdiction to hear 

money claims, the agency involved is not a non-appropriated fund 

instrumentality, and, most relevant for our purposes, the claim is not for 

breach of contract. As we discussed above, the Court has developed a 

different approach in judging Congress’ ability to use appropriations 

limitations to bar recoveries in the case of statutory “benefits” as distinct 

 7 We view it as telling, as well, that despite the statutory basis for the 

airlines’ claims in N.Y. Airways, the court described Congress’s own view 

that the obligations were more in the nature of contracts. See 369 F.2d at 

747.
20

from contract claims.8

Langston dealt with the salary of America’s ambassador to Haiti. By 

statute the ambassador’s salary had been pegged at $7,500, and that amount 

had been specifically appropriated for that purpose for several years. The 

annual appropriations included the statement that the appropriation “shall 

be in full for the annual salaries thereof from and after July 1, 1878.” 

Langston, 118 U.S. at 390. Beginning in 1882, however, this language was 

omitted and the appropriation was for only $5,000. The Court sustained the 

ambassador’s claim for the differential in pay, despite the absence of an 

appropriation for the full amount because of the earlier language indicating 

that the $7,500 salary should continue beyond 1878, and also because the 

later statute did not purport to cap his pay at $5,000: 

[A] statute fixing the annual salary of a public officer at a 

named sum, without limitation as to time, should not be 

deemed abrogated or suspended by subsequent enactments 

which merely appropriated a less amount for the services of 

that officer for particular fiscal years, and which contained no 

words that expressly, or by clear implication, modified or 

repealed the previous law. 

Langston, 118 U.S. at 394. The specificity of the earlier promise, in short, 

was not overcome by a later appropriation short of the promised amount. 

The present facts offer a reverse scenario. The language of 

entitlement is not specific with respect to Congress’s intent to appropriate, 

but its subsequent language disavowing any such obligation is clear. 

Finally, also relevant is the Federal Circuit’s decision in Star-Glo 

Assocs., LP v. United States, 414 F.3d 1349 (Fed. Cir. 2005). There, 

Congress had established a program to be administered by the Department 

of Agriculture to compensate Florida citrus growers for the compelled 

 8 The same would be true for breach of trust cases, and constitutional 

takings claims wherein government liability is either fixed by the 

constitution, and thus not subject to appropriations limitations, or by 

statutorily-created duties that create a fiduciary relationship between the 

government and some third party, such as Native American tribes. 
21

destruction of diseased trees. The program operated for two years before 

Congress, in October 2000, adopted an appropriations statute with respect 

to the fiscal year 2000, which provided that the Secretary of Agriculture 

“shall use $58,000,000 of the funds of the Commodity Credit Corporation 

to carry out this section, to remain available until expended.” Id. at 1352. 

There is no question that the plaintiff growers complied with the applicable 

regulations and would have been compensated but for the appropriations 

cap. The Court of Federal Claims held, despite the fact that plaintiffs had 

applied for compensation prior to the exhaustion of the appropriated funds, 

they could not recover because the cap barred further payments. 59 Fed. Cl. 

724, 733 (2004). The Federal Circuit affirmed, although on a somewhat 

different basis. Initially it agreed with the applicability of the cap. Relying 

on legislative history as well as the language of the appropriations statute, it 

concluded that there was “no room to doubt that Congress intended benefits 

available under section 810 to be capped at $58,000,000.” Id. at 1355. 

The plaintiffs in Star-Glo argued, however, that the fact that their 

applications were submitted prior to the exhaustion of funds made the cap 

irrelevant, and that it made the facts distinguishable from, for example, 

Highland-Falls, where the appropriation had been exhausted prior to the 

plaintiff seeking additional funds. The circuit court found it unnecessary to 

reach the question, however, because it ruled that plaintiff did not qualify 

for any further payments under the terms of the statute. Id. at 1357-58. 

Although it is difficult to harmonize the decisions in this lengthy 

history, we believe they lead to following controlling principles. Mere nonappropriation of sufficient funds to meet an existing obligation created by 

statute9 will not thwart the courts’ enforcement of the obligation. Whether 

Congress, in subsequent appropriations legislation, can block enforcement 

of a substantive obligation depends, ultimately, on how clearly it expresses 

its intent to do so. 

These principles dictate the result here. Congress made clear its 

intention that no public funds be spent to reimburse risk corridor 

participants beyond their user fee contributions. It asked GAO what monies 

were available to HHS to make risk corridor payments. GAO answered that 

user fees and the CMS program management fund were the only sources 

 9 We recognize that the case law dealing with contractual obligations, the 

takings clause, or those arising out of Indian trusts, is sui generis.
22

available. Congress expressly blocked the use of the latter, leaving only the 

former. The government’s obligation was thus capped to the amount 

brought in from user fees. We are not presented with possible exceptions to 

this outcome. There were no contract commitments and Congress did not 

merely fail to address the source of funding. It affirmatively barred the use 

of public funds in a timely manner, predating the maturation of any 

obligation to make statutory entitlement payments.

We recognize that Judge Wheeler arrived at a different conclusion in 

Moda Health after examining the same cases. We respectfully disagree 

with his conclusion. He relied heavily on a distinction present in the 

legislation in Dickerson and Will, two cases in which appropriation bars 

were enforced to thwart the implementation of rights arising from 

substantive legislation. In both cases, Congress had used, in substance, the 

phrase, “the appropriation in this or any other Act.” I.e., Congress was 

ensuring that the agencies would not subvert its intent by funding the 

programs at issue from other sources. Not finding that language in the 

appropriations riders in the present circumstances, he held that they did not 

limit the substantive obligation created by section 1432. Moda, 130 Fed. Cl. 

At 460-61. We disagree. These appropriations provisions were adopted 

after Congress inquired of GAO concerning available funding for the RCP 

payments. Congress was presented with two potential pools of money for 

RCP payments and clearly eliminated one of them, thus expressly limiting 

payments to the other pool—user fees. Once those funds were exhausted, 

the government’s liability was capped.

Furthermore, we remain unconvinced by plaintiff’s argument that 

Congress’ failure to amend or repeal the RPC indicated that it did not 

intend the program to be budget neutral. We agree with defendant that it is 

imprudent to determine Congress’ intent based merely upon what it was 

unable to do. The legislative history of the statute does not lend itself to 

plaintiff’s interpretation. In fact, Congress opted to follow a committee 

design for section 1342 without an enumerated appropriation, declining to 

mimic a different committee’s design which specifically included an 

appropriation. Compare S. 1796, 111th Cong., with S. 1679, 111th Cong. 

Congress had every opportunity to include an appropriation as it had in 

other sections of the ACA, see, e.g., 42 U.S.C. §§ 18001(g)(1), 

18031(a)(1), 18042(g), 18043(c), 18121(b), and remove any doubt of 

budget neutrality, but declined to do so. While the CBO’s decision to omit 

any reference to the RCP in the ACA scoring is not dispositive, it does 
23

suggest that plaintiff is incorrect. Plaintiff’s position is further hampered in 

light of the subsequent appropriations riders that explicitly restrict where 

funding could be obtained after the GAO highlighted which sources may be 

available. As discussed previously, even if there were a mature obligation, 

Congress can amend it via appropriations legislation. See Dickerson, 310 

U.S. at 555. Nonetheless, the actions or inactions of a previous Congress 

are not binding on a later Congress.

Although we raised the issue of the availability of the Judgment 

Fund for additional briefing, we conclude that the issue is immaterial. 

Retreat to the Judgment Fund assumes a liability in the first instance. See 

Office of Pers. Mgmt. v. Richmond, 496 U.S. 414, 432 (1990). We cannot 

order the payment of monies out of the Treasury beyond those arising from 

user fees.

CONCLUSION

Plaintiff’s motion for summary judgment is denied. Defendant’s 

motion to dismiss for failure to state a claim is granted. The Clerk is 

directed to dismiss the complaint and enter judgment accordingly. No costs. 

s/ Eric G. Bruggink

ERIC G. BRUGGINK

Senior Judge