In the United States Court of Federal Claims

No. 17-2057C 

(Filed: June 10, 2019) 

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

MAINE COMMUNITY HEALTH OPTIONS, * 

* 

Plaintiff, * Affordable Care Act; Cost-Sharing 

* Reduction Payments; 42 U.S.C. § 18071; 

v. * Statutory Violation; Implied-in-Fact

* Contract; Motion for Summary Judgment, 

THE UNITED STATES, * RCFC 56

* 

Defendant. * 

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

Stephen McBrady, Washington, DC, for plaintiff. 

Christopher J. Carney, United States Department of Justice, Washington, DC, for defendant. 

OPINION AND ORDER

SWEENEY, Chief Judge 

Plaintiff Maine Community Health Options contends that the federal government ceased 

making the cost-sharing reduction payments to which it and other insurers are entitled under the 

Patient Protection and Affordable Care Act (“Affordable Care Act”), Pub. L. No. 111-148, 124 

Stat. 119 (2010), and its implementing regulations. In its February 15, 2019 Opinion and Order, 

the court determined that plaintiff was entitled to recover the cost-sharing reduction payments 

that the government did not make for 2017. Plaintiff subsequently amended its complaint to add 

claims for the payments that the government did not make for 2018 and moved for summary 

judgment on those claims. For the reasons set forth below, the court grants plaintiff’s motion.1

 1

 For simplicity, and to facilitate any appellate review, this decision includes the 

background and analysis previously set forth in the court’s February 15, 2019 Opinion and 

Order. 
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I. BACKGROUND

A. The Affordable Care Act

Congress enacted the Affordable Care Act as part of a comprehensive scheme of health 

insurance reform.2

 See generally King v. Burwell, 135 S. Ct. 2480 (2015). Specifically, the Act 

includes “a series of interlocking reforms designed to expand coverage in the individual health 

insurance market.” Id. at 2485. In conjunction with these reforms, the Act provided for the 

establishment of an American Health Benefit Exchange (“exchange”) in each state by January 1, 

2014, to facilitate the purchase of “qualified health plans” by individuals and small businesses. 

42 U.S.C. §§ 18031, 18041 (2012); accord King, 135 S. Ct. at 2485 (describing an exchange as 

“a marketplace that allows people to compare and purchase insurance plans”). Qualified health 

plans can be offered at four levels (bronze, silver, gold, and platinum) that differ based on how 

much of a plan’s benefits an insurer must cover under the plan.3 42 U.S.C. § 18022(d)(1). 

 Among the reforms included in the Affordable Care Act were two aimed at ensuring that 

individuals have access to affordable insurance coverage and health care: the premium tax credit 

enacted in section 1401 of the Act, 26 U.S.C. § 36B (2012), and the cost-sharing reduction 

program enacted in section 1402 of the Act, 42 U.S.C. § 18071. “The premium tax credits and 

the cost-sharing reductions work together: the tax credits help people obtain insurance, and the 

cost-sharing reductions help people get treatment once they have insurance.” California v. 

Trump, 267 F. Supp. 3d 1119, 1123 (N.D. Cal. 2017). 

1. Premium Tax Credit 

The first of these two reforms, the premium tax credit, is designed to reduce the insurance 

premiums paid by individuals whose household income is between 100% and 400% of the 

poverty line. See 26 U.S.C. § 36B(c)(1)(A); 42 U.S.C. § 18082(c)(2)(B)(i); accord 26 C.F.R. 

§ 1.36B-2(a) to (b) (2017); 45 C.F.R. § 156.460(a)(1) (2017). The Secretary of the Department 

of Health and Human Services (“Secretary of HHS”) is required to determine whether 

individuals enrolling in qualified health plans on an exchange are eligible for the premium tax 

credit and, if so, to notify the Secretary of the United States Department of the Treasury 

(“Treasury Secretary”) of that fact. 42 U.S.C. § 18082(c)(1). The Treasury Secretary, in turn, is 

required to make periodic advance payments of the premium tax credit to the insurers offering 

the qualified health plans in which the eligible individuals enrolled. Id. § 18082(c)(2)(A). The 

insurers are required to use these advance payments to reduce the premiums of the eligible 

individuals. Id. § 18082(c)(2)(B)(i); see also 26 U.S.C. § 36B(f) (describing the process for 

 2 Seven days after enacting the Affordable Care Act, Congress enacted the Health Care 

and Education Reconciliation Act of 2010, Pub. L. No. 111-152, 124 Stat. 1029, which included 

additional provisions related to health insurance reform. 

3

 For example, for a silver-level qualified health plan, insurers are required to provide 

coverage for 70% of the benefits offered under the plan. 42 U.S.C. § 18022(d)(1)(B). Insurers 

offering qualified health plans on an exchange must offer at least one silver-level plan and one 

gold-level plan. Id. § 18021(a)(1)(C)(ii). 
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annually reconciling an individual’s actual premium tax credit with the advance payments of the 

credit). To fund the premium tax credit, Congress amended a preexisting permanent 

appropriation to allow for the payment of refunds arising from the credit. See 31 U.S.C. § 1324 

(2012) (“Necessary amounts are appropriated . . . for refunding internal revenue collections as 

provided by law . . . . Disbursements may be made from the appropriation made by this section 

only for . . . refunds due from credit provisions of [26 U.S.C. § 36B].”). 

2. Cost-Sharing Reductions 

 The other reform, cost-sharing reductions, is designed to reduce the out-of-pocket 

expenses (such as deductibles, copayments, and coinsurance4

) paid by individuals whose 

household income is between 100% and 250% of the poverty line. See 42 U.S.C. 

§§ 18022(c)(3), 18071(c)(2); accord 45 C.F.R. §§ 155.305(g), 156.410(a). Insurers offering 

qualified health plans are required to reduce eligible individuals’ cost-sharing obligations by 

specified amounts,5 42 U.S.C. § 18071(a), and the Secretary of HHS is required to reimburse the 

insurers for the cost-sharing reductions they make, see id. § 18071(c)(3)(A) (“[T]he Secretary [of 

HHS] shall make periodic and timely payments to the issuer equal to the value of the 

reductions.”). 

The Secretary of HHS is afforded some discretion in the timing of the reimbursements: 

once he determines which individuals are eligible for cost-sharing reductions, he must notify the 

Treasury Secretary “if an advance payment of the cost-sharing reductions . . . is to be made to the 

issuer of any qualified health plan” and, if so, the time and amount of such advance payment. Id. 

§ 18082(c)(3). Pursuant to this authority, the Secretary of HHS established a reimbursement 

schedule by which the government “would make monthly advance payments to issuers to cover 

projected cost-sharing reduction amounts, and then reconcile those advance payments at the end 

of the benefit year to the actual cost-sharing reduction amounts.” Patient Protection and 

Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2014, 78 Fed. Reg. 

15,410, 15,486 (Mar. 11, 2013) (to be codified at 45 C.F.R. § 156.430); see also 45 C.F.R. 

§ 156.430(b)(1) (“A [qualified health plan] issuer will receive periodic advance payments [for 

cost sharing reductions].”). The amount of the cost-sharing reduction payments owed to insurers 

is based on information provided to HHS by the insurers. See 45 C.F.R. § 156.430(c) (requiring 

insurers to report to HHS, “for each policy, the total allowed costs for essential health benefits 

charged for the policy for the benefit year, broken down by . . . (i) [t]he amount the [insurer] 

 4

 “The term ‘cost-sharing’ includes . . . deductibles, coinsurance, copayments, or similar 

charges,” but not “premiums, balance billing amounts for non-network providers, or spending for 

non-covered services.” 42 U.S.C. § 18022(c)(3). 

5

 To be eligible for cost-sharing reductions, an individual must enroll in a silver-level 

qualified health plan. 42 U.S.C. § 18071(b)(1). Under a standard silver-level plan, insurers are 

required to provide coverage for 70% of the benefits offered under the plan. Id.

§ 18022(d)(1)(B). However, for eligible individuals, that percentage increases to 73% (when 

household income is between 200% and 250% of the poverty line), 87% (when household 

income is between 150% and 200% of the poverty line), or 94% (when household income is 

between 100% and 150% of the poverty line). Id. § 18071(c)(2). 
-4- 

paid[,] (ii) [t]he amount the enrollee(s) paid[, and] (iii) [t]he amount the enrollee(s) would have 

paid under the standard plan without cost-sharing reductions”). 

The Affordable Care Act did not include any language appropriating funds to make the 

cost-sharing reduction payments. 

3. Requirements for Insurers

To offer a health insurance plan on an exchange in any given year––and become eligible 

to receive payments for the premium tax credit and cost-sharing reductions––an insurer must 

satisfy certain requirements established by the Secretary of HHS. See, e.g., 42 U.S.C. 

§ 18041(a)(1) (authorizing the Secretary of HHS to “issue regulations setting standards for 

meeting the requirements under [title I of the Affordable Care Act] with respect to––(A) the 

establishment and operation of Exchanges . . . ; (B) the offering of qualified health plans through 

such Exchanges; . . . and (D) such other requirements as the Secretary determines appropriate”). 

The requirements include (1) obtaining certification that any plan it intends to offer is a qualified 

health plan, see, e.g., 45 C.F.R. §§ 155.1000, .1010, 156.200; (2) submitting rate and benefit 

information before the open enrollment period for the applicable year, see, e.g., id. §§ 155.1020, 

156.210; and (3) executing a standard Qualified Health Plan Issuer Agreement (“QHPI 

Agreement”) with the Centers for Medicare and Medicaid Services (“CMS”), an agency of 

HHS,

6 for that year,7 see id. § 155.260(b) (requiring exchanges to execute agreements with 

entities that will gain access to personally identifiable information submitted to the exchanges 

that address privacy and security standards and obligations); see also id. § 155.20 (defining 

“exchange” to include exchanges established and operated by either a state or HHS). 

With respect to the latter requirement, each QHPI Agreement includes the following 

recitals:

 6

 The Secretary of HHS delegated to the Administrator of CMS (1) his authority––

granted in section 1301 of the Affordable Care Act––“pertaining to defining qualified health 

plans”; (2) his authority––granted in section 1311 of the Affordable Care Act––“pertaining to 

affordable choices of health benefit plans”; and (3) his authority––granted in section 1321 of the 

Affordable Care Act––“pertaining to the State’s flexibility in operation and enforcement of 

[exchanges] and related requirements.” Delegation of Authorities, 76 Fed. Reg. 53,903, 53,903 

(Aug. 30, 2011); see also 42 U.S.C. §§ 18021 (codifying section 1301 of the Affordable Care 

Act), 18031 (codifying section 1311 of the Affordable Care Act), 18041 (codifying section 1321 

of the Affordable Care Act).

7

 The QHPI Agreements for 2017 and 2018 include, as relevant in this case, identical 

language. See Ctrs. for Medicare & Medicaid Servs., Dep’t of Health & Human Servs., Plan

Year 2017 QHP Issuer Agreement, https://www.cms.gov/CCIIO/Resources/Regulations-andGuidance/Downloads/Plan-Year-2017-QHP-Issuer-Agreement.pdf (last visited Feb. 1, 2019); 

Ctrs. for Medicare & Medicaid Servs., Dep’t of Health & Human Servs., Plan Year 2018 QHP

Issuer Agreement, https://www.qhpcertification.cms.gov/s/PlanYear2018_ 

QHPIssuerAgreement_FFMSPM.pdf (last visited Feb. 1, 2019) (collectively, “Agreements”). 
-5- 

WHEREAS:

1. Section 1301(a) of the Affordable Care Act . . . provides that [Qualified 

Health Plans] are health plans that are certified by an Exchange and, among 

other things, comply with the regulations developed by the Secretary of the 

Department of Health and Human Services under section 1321(a) and other 

requirements that an applicable Exchange may establish.

2. [Qualified Health Plan Issuer] is an entity licensed by an applicable State 

Department of Insurance . . . as an Issuer and seeks to offer through the 

[Federally-facilitated Exchange] in such State one or more plans that are 

certified to be [Qualified Health Plans].

3. It is anticipated that periodic [Advance Payments of the Premium Tax Credit], 

advance payments of [Cost-Sharing Reductions], and payments of [Federallyfacilitated Exchange] user fees will be due between CMS and [Qualified 

Health Plan Issuer].

4. [Qualified Health Plan Issuer] and CMS are entering into this Agreement to 

memorialize the duties and obligations of the parties, including to satisfy the 

requirements under 45 CFR 155.260(b)(2). 

Now, therefore, in consideration of the promises and covenants herein contained, 

the adequacy of which the Parties acknowledge, [Qualified Health Plan Issuer] 

and CMS agree as follows . . . . 

Agreements 1. Section I of each agreement is titled “Definitions.” Id. at 1-3. Section II of each 

agreement, titled “Acceptance of Standard Rules of Conduct,” addresses standards related to 

personally identifiable information (as set forth in 45 C.F.R. § 155.260) and communications 

with CMS’s Data Services Hub. Id. at 3-6. Section III of each agreement is titled “CMS 

Obligations” and provides, in its entirety: 

a. CMS will undertake all reasonable efforts to implement systems and processes 

that will support [Qualified Health Plan Issuer] functions. In the event of a 

major failure of CMS systems and/or processes, CMS will work with 

[Qualified Health Plan Issuer] in good faith to mitigate any harm caused by 

such failure.

b. As part of a monthly payments and collections reconciliation process, CMS 

will recoup or net payments due to [Qualified Health Plan Issuer] against 

amounts owed to CMS by [Qualified Health Plan Issuer] in relation to 

offering of [Qualified Health Plans] or any entity operating under the same tax 

identification number as [Qualified Health Plan Issuer] (including 

overpayments previously made), including the following types of payments: 

[Advance Payments of the Premium Tax Credit], advance payments of [CostSharing Reductions], and payment of Federally-facilitated Exchange user fees.
-6- 

Id. at 6. The remaining sections of the agreements contain various boilerplate provisions, see id. 

at 6-9, including several related to the termination of the agreements, id. at 6-7. One 

termination-related clause provides:

[Qualified Health Plan Issuer] acknowledges that termination of this Agreement 

1) may affect its ability to continue to offer [Qualified Health Plans] through the 

[Federally-facilitated Exchange]; 2) does not relieve [Qualified Health Plan 

Issuer] of applicable obligations to continue providing coverage to enrollees; and 

3) specifically does not relieve [Qualified Health Plan Issuer] of any obligation 

under applicable State law to continue to offer coverage for a full plan year. 

Id. at 7. Each agreement is to be executed by authorized representatives of the insurer and CMS. 

Id. at 10-11 (2017 agreement), 9-10 (2018 agreement). 

In addition, in most circumstances, insurers must make their qualified health plans 

available on the exchanges for the entire year for which the plans were certified. 45 C.F.R. 

§ 156.272(a). 

B. Termination of Cost-Sharing Reduction Payments

 On April 10, 2013, before the exchanges opened for business, President Barack H.

Obama submitted to Congress his budget for fiscal year 2014. See Office of Mgmt. & Budget, 

Exec. Office of the President, Fiscal Year 2014 Budget of the United States Government to 

Congress (2013). The budget included a request for a line-item appropriation for cost-sharing 

reduction payments. See id. at App. 448; accord Ctrs. for Medicare & Medicaid Servs., Dep’t of 

Health & Human Servs., Fiscal Year 2014 Justification of Estimates for Appropriations 

Committees 184 (2013). However, Congress did not provide the requested appropriation. See

Consolidated Appropriations Act, 2014, Pub. L. No. 113-76, 128 Stat. 5; see also S. Rep. No. 

113-71, at 123 (2013) (“The Committee recommendation does not include a mandatory 

appropriation, requested by the administration, for reduced cost sharing assistance . . . as 

provided for in sections 1402 and 1412 of the [Affordable Care Act].”). In fact, it is undisputed 

by the parties that Congress has never specifically appropriated funds to reimburse insurers for 

their cost-sharing reductions.8

 It is further undisputed that Congress has never (1) expressly 

prevented––in an appropriations act or otherwise––the Secretary of HHS or the Treasury 

Secretary from expending funds to make cost-sharing reduction payments or (2) amended the 

Affordable Care Act to eliminate the cost-sharing reduction payment obligation. 

 Although Congress did not specifically appropriate funds for cost-sharing reduction 

payments, the Obama administration began making advance payments to insurers for cost-

 8

 Whether Congress will appropriate funds for cost-sharing reduction payments in the 

future is an open question. Cf. Patient Protection and Affordable Care Act; HHS Notice of 

Benefit and Payment Parameters for 2020, 84 Fed. Reg. 227, 283 (Jan. 24, 2019) (“The 

Administration supports a legislative solution that would appropriate [cost-sharing reduction]

payments . . . .”).
-7- 

sharing reductions in January 2014. See Ctrs. for Medicare & Medicaid Servs., Dep’t of Health 

& Human Servs., Guidance Related to Reconciliation of the Cost-Sharing Reduction Component 

of Advance Payments for Benefit Years 2014 and 2015 27 (2016). It made the payments from 

“the same account from which the premium tax credit” advance payments were made––in other 

words, from the permanent appropriation described in 31 U.S.C. § 1324. Letter from Sylvia M. 

Burwell, Director of the Office of Mgmt. & Budget, to Ted Cruz and Michael S. Lee, U.S. 

Senators 4 (May 21, 2014), http://www.cruz.senate.gov/files/documents/Letters/20140521_ 

Burwell_Response.pdf. 

 On November 21, 2014, the United States House of Representatives (“House”) sued the 

Obama administration in the United States District Court for the District of Columbia (“D.C. 

district court”) to stop the payment of cost-sharing reduction reimbursements to insurers. See 

generally U.S. House of Representatives v. Burwell, No. 1:14-cv-01967-RMC (D.D.C. filed 

Nov. 21, 2014). The D.C. district court ruled for the House, holding: 

The Affordable Care Act unambiguously appropriates money for Section 1401 

premium tax credits but not for Section 1402 reimbursements to insurers. Such an 

appropriation cannot be inferred. None of Secretaries’ extra-textual arguments—

whether based on economics, “unintended” results, or legislative history—is 

persuasive. The Court will enter judgment in favor of the House of 

Representatives and enjoin the use of unappropriated monies to fund 

reimbursements due to insurers under Section 1402. The Court will stay its 

injunction, however, pending appeal by either or both parties. 

U.S. House of Representatives v. Burwell, 185 F. Supp. 3d 165, 168 (D.D.C. 2016). The Obama 

administration appealed the ruling. See generally U.S. House of Representatives v. Azar

(“Azar”), No. 16-5202 (D.C. Cir. filed July 6, 2016). However, the United States Court of 

Appeals for the District of Columbia Circuit (“D.C. Circuit”) stayed the appeal to allow 

President-elect Donald J. Trump and his future administration time to determine how to proceed. 

See Mot. Hold Briefing Abeyance 1-2, Azar, No. 16-5202 (Nov. 21, 2016); Order, Azar, No. 16-

5202 (Nov. 21, 2016). 

The Trump administration continued the previous administration’s practice of making 

advance cost-sharing reduction payments to insurers. However, on October 11, 2017, the United 

States Attorney General sent a letter to the Treasury Secretary and the Acting Secretary of HHS 

advising that “the best interpretation of the law is that the permanent appropriation for ‘refunding 

internal revenue collections,’ 31 U.S.C. § 1324, cannot be used to fund the [cost-sharing 

reduction] payments to insurers authorized by 42 U.S.C. § 18071.” Letter from Jefferson B. 

Sessions III, U.S. Attorney General, to Steven Mnuchin, Sec’y of the Treasury, and Don Wright, 

M.D., M.P.H., Acting Sec’y of HHS 1 (Oct. 11, 2017), http://www.hhs.gov/sites/default/files/

csr-payment-memo.pdf. Based on this guidance, the Acting Secretary of HHS directed, the 

following day, that “[cost-sharing reduction] payments to issuers must stop, effective 

immediately,” and that such “payments are prohibited unless and until a valid appropriation 
-8- 

exists.” Memorandum from Eric Hargan, Acting Sec’y of HHS,9 to Seema Verma, 

Administrator of the Ctrs. for Medicare & Medicaid Servs. (Oct. 12, 2017), http://www.hhs.gov/ 

sites/default/files/csr-payment-memo.pdf. 

C. Reaction to the Termination of Cost-Sharing Reduction Payments

 The Trump administration’s termination of cost-sharing reduction payments did not come 

as a surprise to insurers: 

Anticipating that the Administration would terminate [cost-sharing reduction] 

payments, most states began working with the insurance companies to develop a 

plan for how to respond. Because the Affordable Care Act requires insurance 

companies to offer plans with cost-sharing reductions to customers, the federal 

government’s failure to meet its [cost-sharing reduction] payment obligations 

meant the insurance companies would be losing that money. So most of the states 

set out to find ways for the insurance companies to increase premiums for 2018 

(with open enrollment beginning in November 2017) in a fashion that would 

avoid harm to consumers. And the states came up with an idea: allow the 

insurers to make up the deficiency through premium increases for silver plans 

only. In other words, allow a relatively large premium increase for silver plans, 

but no increase for bronze, gold, or platinum plans. 

 As a result, in these states, for everyone between 100% and 400% of the 

federal poverty level who wishes to purchase insurance on the exchanges, the 

available tax credits rise substantially. Not just for people who purchase the silver 

plans, but for people who purchase other plans too. 

California, 267 F. Supp. 3d at 1134-35 (footnote omitted). In other words, by raising premiums 

for silver-level qualified health plans, the insurers would obtain more money from the premium 

tax credit program, which would help mitigate the loss of the cost-sharing reduction payments.10 

 9

 Eric Hargan was named Acting Secretary of HHS on October 10, 2017. See Press 

Release, The White House, President Donald J. Trump Announces Intent to Nominate Personnel 

to Key Administration Posts (Oct. 10, 2017), https://www.whitehouse.gov/presidentialactions/president-donald-j-trump-announces-intent-nominate-personnel-key-administrationposts-22/. 

10 Notably, increasing silver-level qualified health plan premiums would not harm most 

consumers who qualify for the premium tax credit because the credit increases as the premium 

increases. See California, 267 F. Supp. 3d at 1134 (“[T]he amount [of the premium tax credit] is 

based on the cost of the second-cheapest silver plan available on the exchange in your 

geographic area, and then adjusted based on your income (that is, based on where you fall on the 

spectrum between 100% and 400% of the federal poverty level). So, if premiums for the secondcheapest silver plan in your area go up, the amount of your tax credit will go up by a 

corresponding amount. See 26 U.S.C. § 36B.”); see also id. at 1122 (“[M]ost state regulators 
-9- 

Accord id. at 1139 (agreeing with the states “that the widespread increase in silver plan 

premiums will qualify many people for higher tax credits, and that the increased federal 

expenditure for tax credits will be far more significant than the decreased federal expenditure for 

[cost-sharing reduction] payments”). This approach is commonly referred to as “silver loading,” 

and many states appear to have endorsed it, see id. at 1137 (“Even before the Administration 

announced its decision, 38 states accounted for the possible termination of [cost-sharing 

reduction] payments in setting their 2018 premium rates. And now that the announcement has 

been made, even more states are adopting [the] strategy [of increasing silver-level plan premiums 

to obtain additional premium tax credit payments].” (footnote omitted)). 

D. Other Litigation 

While the states and insurers were working on ways to mitigate the loss of cost-sharing 

reduction payments, the parties in the case on appeal at the D.C. Circuit began discussing that

case’s disposition. Joint Status Report 1-2, Azar, No. 16-5202 (Nov. 30, 2017). Ultimately, at 

the request of the parties, the D.C. Circuit dismissed the appeal, Order, Azar, No. 16-5202 (May 

16, 2018), and the D.C. district court vacated the portion of its ruling in which it provided that 

“reimbursements paid to issuers of qualified health plans for the cost-sharing reductions 

mandated by Section 1402 of the Affordable Care Act, Pub. L. 111-148, are ENJOINED pending 

an appropriation for such payments,” Order, Azar, No. 1:14-cv-01967-RMC (May 18, 2018). 

A separate lawsuit was filed by seventeen states and the District of Columbia in the 

United States District Court for the Northern District of California (“California district court”) to 

compel the Trump administration to continue making the advance cost-sharing reduction 

payments to insurers. See generally California v. Trump, No. 3:17-cv-05895-VC (N.D. Cal. 

filed Oct. 13, 2017). The California district court denied the states’ motion for a preliminary 

injunction. California, 267 F. Supp. 3d at 1121-22, 1140. Eventually, the states requested a stay 

of the proceedings or, alternatively, dismissal of the suit without prejudice, explaining:

[S]taying the proceedings is warranted to avoid disturbing the status quo given the 

general success of the practice commonly referred to as “silver-loading” which 

mostly curbed the harm caused by the federal government’s unjustified cessation 

of cost-sharing reduction (CSR) subsidies mandated by Section 1402 of the 

Patient Protection and Affordable Care Act (ACA). At the same time, because of 

the real threat of the federal government taking action to prohibit silver-loading, 

the Court should retain jurisdiction, thus allowing the Plaintiff States to 

expeditiously seek appropriate remedies from this Court for the protection of their 

citizens. Alternatively, if the Court determines that a stay is not appropriate at 

this time, the Plaintiff States respectfully request that the Court dismiss the action 

without prejudice. 

Mot. for Order Staying Proceedings or, in the Alternative, Dismissing Action Without Prejudice

2, California, No. 3:17-cv-05895-VC (July 16, 2018); cf. HHS Notice of Benefit and Payment 

 

have devised responses that give millions of lower-income people better health coverage options 

than they would otherwise have had.”).
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Parameters for 2020, 84 Fed. Reg. at 283 (“The Administration supports a legislative solution 

that would appropriate CSR payments and end silver loading. In the absence of Congressional 

action, we seek comment on ways in which HHS might address silver loading, for potential 

action in future rulemaking applicable not sooner than plan year 2021.”). The California district

court dismissed the case without prejudice on July 18, 2018. Order Dismissing Case Without 

Prejudice, California, No. 3:17-cv-05895-VC (July 18, 2018). 

E. Effect of Cost-Sharing Reduction Payment Termination on Plaintiff

 Plaintiff is a nonprofit corporation, organized as a Consumer Operated and Oriented 

Plan under section 1332 of the Affordable Care Act, that offers qualified health plans on Maine’s 

exchange.11 It began offering qualified health plans on the exchange in 2014, and continued to 

offer such plans in 2015, 2016, 2017, and 2018. As of the end of 2017, plaintiff had the largest 

number of exchange-insured individuals in Maine. Plaintiff began receiving monthly advance 

cost-sharing reduction payments in January 2014 and, as with every other insurer offering 

qualified health plans on the exchanges, stopped receiving these payments effective October 12, 

2017. Plaintiff asserts that this cessation of payments has caused it to suffer large financial 

losses.

F. Procedural History

Plaintiff filed a complaint in this court on December 28, 2017, to recover the cost-sharing 

reduction payments that the government has not made for 2017.12 It asserted two claims for 

relief, contending that in failing to make the cost-sharing reduction payments to insurers, the 

government violated the statutory and regulatory mandate and breached an implied-in-fact 

contract. Plaintiff moved for summary judgment and defendant cross-moved to dismiss the 

complaint. In its February 15, 2019 Opinion and Order, the court determined that plaintiff was 

entitled to recover the unpaid cost-sharing reduction reimbursements for 2017 under both the 

violation-of-statute and breach-of-an-implied-in-fact-contract claims, and directed the parties to 

 11 It appears that the facts in this subsection, which are derived from the allegations in 

plaintiff’s complaint, are undisputed. 

12 A number of other insurers have filed suit in this court seeking to recover unpaid costsharing reduction reimbursements. See, e.g., Common Ground Healthcare Coop. v. United 

States, No. 17-877C (Chief Judge Sweeney); Local Initiative Health Auth. for L.A. Cty. v. 

United States, No. 17-1542C (Judge Wheeler); Cmty. Health Choice, Inc. v. United States, No. 

18-5C (Chief Judge Sweeney); Sanford Health Plan v. United States, Nos. 18-136C and 19-569C 

(Judge Kaplan); Mont. Health Co-op v. United States, Nos. 18-143C and 19-568C (Judge 

Kaplan); Molina Healthcare of Cal., Inc. v. United States, No. 18-333C (Judge Wheeler); Health 

Alliance Med. Plans, Inc. v. United States, No. 18-334C (Judge Campbell-Smith); Blue Cross & 

Blue Shield of Vt. v. United States, No. 18-373C (Judge Horn); Guidewell Mut. Holding Corp. 

v. United States, No. 18-1791C (Judge Griggsby); Harvard Pilgrim Health Care, Inc. v. United 

States, No. 18-1820C (Judge Smith); Blue Cross & Blue Shield of N.D. v. United States, No. 18-

1983C (Judge Horn). 
-11- 

file a joint status report indicating the amount due to plaintiff.

13 See generally Me. Cmty. Health 

Options v. United States, 142 Fed. Cl. 53 (2019). 

 The court also issued decisions in two other cost-sharing reduction cases on February 15, 

2019. See generally Common Ground Healthcare Coop. v. United States, 142 Fed. Cl. 38 

(2019); Cmty. Health Choice, Inc. v. United States, 141 Fed. Cl. 744 (2019), appeal docketed, 

No. 19-1633 (Fed. Cir. Mar. 8, 2019). In both of those decisions, the court determined that the 

plaintiffs were entitled to recover unpaid cost-sharing reduction reimbursements for 2018. See

Common Ground, 142 Fed. Cl. at 53; Cmty. Health Choice, 141 Fed. Cl. at 770. Consequently, 

with the court’s approval, plaintiff filed an amended complaint in which it alleges that in failing 

to make the cost-sharing reduction payments to insurers for 2018, the government violated the 

statutory and regulatory mandate and breached an implied-in-fact contract. Plaintiff then filed a 

motion for summary judgment in which it adopts all of the arguments it advanced in support of 

its claims for 2017 and all of the arguments advanced by the plaintiffs in Common Ground and 

Community Health Choice. Similarly, in its response in opposition to plaintiff’s motion, 

defendant adopts all of the arguments it advanced in opposition to plaintiff’s claims for 2017 and 

the claims for 2018 asserted by the plaintiffs in Common Ground and Community Health 

Choice. Finally, in a joint status report filed on June 7, 2019, the parties represented that the 

amount due to plaintiff for 2017––in accordance with the court’s February 15, 2019 Opinion and 

Order––is $846,493.02, and the amount due to plaintiff for 2018––in the event that the court 

rules in plaintiff’s favor on its claim for 2018––is $18,384,382.25. The court is now prepared to 

rule.

 

II. STANDARD OF REVIEW

Plaintiff moves for summary judgment pursuant to Rule 56 of the Rules of the United 

States Court of Federal Claims (“RCFC”). Summary judgment is appropriate when there is no 

genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. 

RCFC 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is material if it “might 

affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 

U.S. 242, 248 (1986). An issue is genuine if it “may reasonably be resolved in favor of either 

party.” Id. at 250. Entry of summary judgment is mandated against a party who fails to establish 

“an element essential to that party’s case, and on which that party will bear the burden of proof at 

trial.” Celotex Corp., 477 U.S. at 322. Statutory construction and contract interpretation “are 

questions of law amenable to resolution through summary judgment.” Stathis v. United States, 

120 Fed. Cl. 552, 561 (2015); accord Varilease Tech. Group, Inc. v. United States, 289 F.3d 795, 

798 (Fed. Cir. 2002) (“Contract interpretation is a question of law generally amenable to 

 13 The court had the benefit of full briefing and oral argument in three cost-sharing 

reduction cases: Common Ground Healthcare Cooperative v. United States, No. 17-877C, 

Maine Community Health Options v. United States, No. 17-2057C, and Community Health 

Choice, Inc. v. United States, No. 18-5C. The plaintiffs in all three cases alleged that the 

government violated the cost-sharing reduction statutes and regulations, and the plaintiffs in two 

of the cases alleged a breach of an implied-in-fact contract. Thus, in ruling on the parties’ 

motions in this case, the court, when applicable, considered the parties’ arguments in all three 

cases. 
-12- 

summary judgment.”); Anderson v. United States, 54 Fed. Cl. 620, 629 (2002) (“The plaintiff’s 

entitlement . . . rests solely upon interpretation of the cited statute and is thus amenable to 

resolution by summary judgment.”), aff’d, 70 F. App’x 572 (Fed. Cir. 2003) (unpublished 

opinion). 

III. DISCUSSION

 As noted above, in seeking to recover the cost-sharing reduction payments not made by 

the government, plaintiff asserts two claims for relief. The court addresses each in turn.

A. Violation of Statute

Plaintiff first contends that the government’s failure to make the payments was a 

violation of the cost-sharing reduction provisions of the Affordable Care Act and its 

implementing regulations. Plaintiff further contends that Congress’s failure to specifically 

appropriate funds for cost-sharing reduction payments does not suspend or terminate the 

government’s obligation to make the payments. Defendant disagrees, arguing that Congress 

expressed its intent that cost-sharing reduction payments should not be made absent a specific 

appropriation for that purpose by not appropriating funds for cost-sharing reductions in the 

Affordable Care Act or thereafter. Consequently, defendant contends, monetary damages––

payable from the Judgment Fund––are unavailable from this court. 

 

1. The Government Is Obligated to Make Cost-Sharing Reduction Payments to Plaintiff

Notwithstanding the Absence of a Specific Appropriation for That Purpose

 To determine whether Congress intended the government to make cost-sharing reduction 

payments to insurers, the court first turns to the language of the Affordable Care Act. See Lamie 

v. U.S. Tr., 540 U.S. 526, 534 (2004) (“The starting point in discerning congressional intent is 

the existing statutory text.”); see also Conn. Nat’l Bank v. Germain, 503 U.S. 249, 253-54 (1992) 

(“[C]ourts must presume that a legislature says in a statute what it means and means in a statute 

what it says there.”). In addition to evaluating the specific provision of the Affordable Care Act 

establishing the cost-sharing reduction program, the court must read that provision in the context 

of the Affordable Care Act as a whole. See King v. St. Vincent’s Hosp., 502 U.S. 215, 221 

(1991) (following “the cardinal rule that a statute is to be read as a whole, since the meaning of 

statutory language, plain or not, depends on context” (citation omitted)); Crandon v. United 

States, 494 U.S. 152, 158 (1990) (“In determining the meaning of the statute, we look not only to 

the particular statutory language, but to the design of the statute as a whole and to its object and 

policy.”); Kokoszka v. Belford, 417 U.S. 642, 650 (1974) (“When ‘interpreting a statute, the 

court will not look merely to a particular clause in which general words may be used, but will 

take in connection with it the whole statute (or statutes on the same subject) and the objects and 

policy of the law, as indicated by its various provisions, and give to it such a construction as will 

carry into execution the will of the Legislature . . . .’” (quoting Brown v. Duchesne, 60 U.S. 183, 

194 (1856))); see also Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 843 

n.9 (1984) (“If a court, employing traditional tools of statutory construction, ascertains that 

Congress had an intention on the precise question at issue, that intention is the law and must be 

given effect.”); Kilpatrick v. Principi, 327 F.3d 1375, 1384 (Fed. Cir. 2003) (“[I]n determining 
-13- 

whether Congress has directly spoken to the point at issue, a court should attempt to discern 

congressional intent either from the plain language of the statute or, if necessary, by resort to the 

applicable tools of statutory construction[.]”). If congressional intent regarding the obligation to 

make cost-sharing reduction payments can be ascertained from evaluating the text of the 

Affordable Care Act, then the court’s inquiry on this issue is complete. See Conn. Nat’l Bank, 

503 U.S. at 254. 

 The statutory provision governing cost-sharing reductions sets forth an unambiguous 

mandate: “the Secretary [of HHS] shall make periodic and timely payments” to insurers “equal 

to the value of the reductions” made by the insurers. 42 U.S.C. § 18071(c)(3)(A); accord Local 

Initiative Health Auth. for L.A. Cty. v. United States, 142 Fed. Cl. 1, 11 (2019) (“That provision 

can only mean one thing: the Government must repay [Qualified Health Plans] for their [costsharing reduction] expenses. The unambiguous ‘shall make’ language indicates a binding 

obligation to pay that the Court is powerless to construe any differently.”); Mont. Health Co-op 

v. United States, 139 Fed. Cl. 213, 218 (2018) (“[T]he statutory language clearly and 

unambiguously imposes an obligation on the Secretary of HHS to make payments to health 

insurers that have implemented cost-sharing reductions on their covered plans as required by the 

[Affordable Care Act].”),

14 appeal docketed, No. 19-1302 (Fed. Cir. Dec. 12, 2018); see also

SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1354 (2018) (“The word ‘shall’ generally imposes a 

nondiscretionary duty.”); Gilda Indus., Inc. v. United States, 622 F.3d 1358, 1364 (Fed. Cir. 

2010) (“When a statute directs that a certain consequence ‘shall’ follow from specified 

contingencies, the provision is mandatory and leaves no room for discretion.”); cf. Moda Health 

Plan, Inc. v. United States, 892 F.3d 1311, 1320 (2018) (concluding that similar language in 

section 1342 of the Affordable Care Act––indicating that the Secretary of HHS “shall establish” 

a risk corridors program pursuant to which the Secretary of HHS “shall pay” risk corridors 

payments––is “unambiguously mandatory”), petition for cert. filed, 87 U.S.L.W. 3330 (U.S. Feb. 

4, 2019). Moreover, the mandatory payment obligation fits logically within the statutory scheme 

established by Congress. The cost-sharing reduction payments were meant to reimburse insurers 

for paying an increased share of their insureds’ cost-sharing obligations, 42 U.S.C. 

§ 18071(a)(2), (c)(3)(A), and the reduction of insureds’ cost-sharing obligations was meant to 

make obtaining health care more affordable, see, e.g., id. § 18071(c)(1)(A) (describing how costsharing reductions would be achieved by reducing insureds’ out-of-pocket limits). In short, the 

plain language, structure, and purpose of the Affordable Care Act reflect the intent of Congress 

to require the Secretary of HHS to make cost-sharing reduction payments to insurers. 

Defendant does not dispute this conclusion. Rather, it contends that the cost-sharing 

reduction payment obligation is unenforceable because Congress never specifically appropriated 

funds––either in the Affordable Care Act or thereafter––to make cost-sharing reduction 

payments. 

 14 The judge who decided Montana Health Co-op––the Honorable Elaine D. Kaplan––

subsequently issued a substantively identical ruling in another case. See Sanford Health Plan v. 

United States, 139 Fed. Cl. 701 (2018), appeal docketed, No. 19-1290 (Fed. Cir. Dec. 11, 2018). 
-14- 

a. The Lack of Specific Appropriating Language in the Affordable Care Act

As defendant observes, the Affordable Care Act does not include any language 

specifically appropriating funds for cost-sharing reduction payments. Defendant also correctly 

observes that the Act’s cost-sharing reduction provision lacks any appropriating language, while 

its companion provision––the premium tax credit––included an explicit funding mechanism.15 

Compare Affordable Care Act § 1401(d) (amending the permanent appropriation set forth in 31 

U.S.C. § 1324 to allow for the payment of the premium tax credit), with id. § 1402 (containing 

no appropriating language). According to defendant, the absence of any funding mechanism for 

cost-sharing reduction payments, and Congress’s decision to provide a funding mechanism for 

premium tax credit payments and not cost-sharing reduction payments, reflect the intent of 

Congress, when enacting the Affordable Care Act, to preclude liability for cost-sharing reduction 

payments. Defendant is mistaken for several reasons. 

First, it is well settled that the government can create a liability without providing for the 

means to pay for it. See, e.g., Moda Health Plan, 892 F.3d at 1321 (“[I]t has long been the law 

that the government may incur a debt independent of an appropriation to satisfy that debt, at least 

in certain circumstances.”); Collins v. United States, 15 Ct. Cl. 22, 35 (1879) (“[T]he legal 

liabilities incurred by the United States under . . . the laws of Congress . . . may be created where 

there is no appropriation of money to meet them . . . .”). Thus, the absence of a specific 

appropriation for cost-sharing reduction payments in the Affordable Care Act does not, on its 

own, extinguish the government’s obligation to make the payments. 

 Second, that Congress provided a funding mechanism for premium tax credit payments 

and not for cost-sharing reduction payments does not reflect congressional intent to foreclose 

liability for the latter. Defendant relies on the proposition that when “Congress includes 

particular language in one section of a statute but omits it in another section of the same Act, it is 

generally presumed that Congress acts intentionally and purposely in the disparate inclusion or 

exclusion.” Russello v. United States, 464 U.S. 16, 23 (1983) (quoting United States v. Wong 

Kim Bo, 472 F.2d 720, 722 (5th Cir. 1972)); accord Digital Realty Trust, Inc. v. Somers, 138 S. 

Ct. 767, 777 (2018). Here, although Congress may have acted intentionally by treating the two

related provisions differently,16 it is difficult to discern what that intent might be. In addition to 

the intent inferred by defendant, there are other reasonable explanations for the disparity. One 

possible explanation is that it was a simple matter to add the premium tax credit to a preexisting

permanent appropriation in the Internal Revenue Code for the payment of tax credits, whereas no 

such permanent appropriation existed that would apply to cost-sharing reduction payments. 

Another possible explanation is that Congress understood that other funds available to HHS 

 15 Both provisions appear in subpart A of part I of subtitle E of the Affordable Care Act, 

which is titled “Premium Tax Credits and Cost-Sharing Reductions.” 124 Stat. at 213-24. 

16 Alternatively, it is possible that the disparate treatment does not reflect any intent at 

all. As the United States Supreme Court (“Supreme Court”) recognized in King, “[t]he 

Affordable Care Act contains more than a few examples of inartful drafting.” 135 S. Ct. at 2492. 

Thus, Congress’s failure to include any appropriating language in the cost-sharing reduction 

provision may simply have been an oversight. 
-15- 

could be used to make the cost-sharing reduction payments; indeed, the cost-sharing reduction 

provision lacks any language, such as “subject to the availability of appropriations,” reflecting 

Congress’s recognition that appropriations were unavailable, see Greenlee Cty., Ariz. v. United 

States, 487 F.3d 871, 878 (Fed. Cir. 2007) (observing that “in some instances the statute creating 

the right to compensation . . . may restrict the government’s liability . . . to the amount 

appropriated by Congress” with language such as “subject to the availability of appropriations”). 

A third possible explanation is that Congress intended to defer appropriating funds for costsharing reduction payments until 2014, when insurers began to offer qualified health plans on the 

exchanges and incur cost-sharing reduction liabilities. Because it is unclear which of these 

explanations––if any––is correct, the court declines to ascribe any particular intent to Congress 

based on Congress’s disparate treatment of the two provisions. 

 Third, the court is unpersuaded by defendant’s related contention that insurers’ ability to 

increase premiums for their silver-level qualified health plans to obtain greater premium tax 

credit payments, and thus offset any losses from the government’s nonpayment of cost-sharing 

reduction reimbursements, is evidence that Congress did not intend to provide a statutory

damages remedy for the government’s failure to make the cost-sharing reduction payments. 

Accord Local Initiative, 142 Fed. Cl. at 15; Mont. Health Co-op, 139 Fed. Cl. at 221. Defendant 

does not identify any statutory provision permitting the government to use premium tax credit 

payments to offset its cost-sharing reduction payment obligation (even if insurers intentionally 

increased premiums to obtain larger premium tax credit payments to make up for lost costsharing reduction payments). Nor does defendant identify any evidence in the Affordable Care 

Act’s legislative history suggesting that Congress intended to limit its liability to make costsharing reduction payments by increasing its premium tax credit payments. That insurers and 

states discovered a way to mitigate the insurers’ losses from the government’s failure to make 

cost-sharing reduction payments does not mean that Congress intended this result. Moreover, 

defendant’s concern that Congress could not have intended to allow a double recovery of costsharing reduction payments is not well taken. The increased amount of premium tax credit 

payments that insurers receive from increasing silver-level plan premiums are still premium tax 

credit payments, not cost-sharing reduction payments. Indeed, under the statutory scheme as it 

exists, even if the government were making the required cost-sharing reduction payments, 

insurers could (to the extent permitted by their state insurance regulators) increase their silverlevel plan premiums; in such circumstances, it could not credibly be argued that the insurers 

were obtaining a double recovery of cost-sharing reduction payments. While the premium tax 

credit and cost-sharing reduction provisions were enacted to reduce an individual’s health-carerelated costs (to obtain insurance and to obtain health care, respectively), they are not substitutes 

for each other.17

 17 The California district court’s decision in California v. Trump does not assist 

defendant. Although the court described how insurers are coping with the lost cost-sharing 

reduction payments by raising silver-level qualified health plan premiums to obtain larger 

premium tax credit payments, nowhere in its decision does the court hold that the government’s 

liability for cost-sharing reduction payments is lessened or eliminated by the government making 

larger premium tax credit payments to insurers. Indeed, the court very clearly emphasized that 

the premium tax credit program and the cost-sharing reduction program were separate and 

distinct. See California, 267 F. Supp. 3d at 1131. Moreover, the court’s discussion of the 
-16- 

 Fourth, it would defy common sense to conclude that Congress obligated the Secretary of 

HHS to reimburse insurers for their mandatory cost-sharing reductions without intending to 

actually reimburse the insurers. If Congress did not intend to create such an obligation, it would 

not have included any provision for reimbursing cost-sharing reductions in the Act. 

 In sum, Congress’s failure to include any appropriating language in the Affordable Care 

Act does not reflect congressional intent to preclude liability for cost-sharing reduction 

payments. This conclusion, however, does not end the court’s analysis because defendant also 

argues that Congress’s subsequent failure to appropriate funds to make cost-sharing reduction 

payments through annual appropriations acts or otherwise signals congressional intent to 

foreclose liability. 

b. The Lack of Specific Appropriating Language in Subsequent Appropriations Acts

 The Appropriations Clause of the United States Constitution provides that “[n]o Money 

shall be drawn from the Treasury, but in Consequence of Appropriations made by Law[.]” U.S. 

Const. art. I, § 9, cl. 7. The statute commonly referred to as the Antideficiency Act further 

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

or authorize an expenditure or obligation exceeding an amount available in an appropriation or 

fund for the expenditure or obligation[.]” 31 U.S.C. § 1341(a)(1)(A). These directives are

unambiguous: disbursements from the United States Treasury require an appropriation from 

Congress. However, “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 a Government obligation created by statute.” N.Y. Airways, Inc. v. United States, 

369 F.2d 743, 748 (Ct. Cl. 1966) (per curiam), cited in Moda Health Plan, 892 F.3d at 1321-22; 

cf. Moda Health Plan, 892 F.3d at 1322 (recognizing that the Supreme Court “rejected the notion 

that the Anti-Deficiency Act’s requirements somehow defeat the obligations of the 

government”). 

 Defendant does not contend that any appropriations acts––or, indeed, any statutes at all––

enacted after the Affordable Care Act contain language that “expressly or by clear implication” 

modifies or repeals the Act’s cost-sharing reduction payment obligation. Rather, it relies on 

Congress’s complete failure to appropriate funds for cost-sharing reduction payments as 

evidence that Congress intended to suspend the cost-sharing reduction payment obligation. 

Defendant’s reliance is misplaced. None of the appropriations acts enacted after the Affordable 

Care Act expressly or impliedly disavowed the payment obligation; they were completely silent 

on the issue. Thus, this case is distinguishable from those relied upon by defendant––Mitchell v. 

United States, 109 U.S. 146 (1883), Dickerson v. United States, 310 U.S. 554 (1940), and United 

States v. Will, 449 U.S. 200 (1980)––that concerned situations in which Congress made 

 

approach taken by insurers to obtain increased premium tax credit payments was included within 

its analysis of “whether the absence of a preliminary injunction would harm the public and 

impede the objectives of health care reform.” Id. at 1133. In other words, the court’s focus was 

on how the increase in premiums would affect the public, and not on the government’s obligation 

to make payments to insurers. 
-17- 

affirmative statements in appropriations acts that reflected an intent to suspend the underlying 

substantive law. Accord Local Initiative, 142 Fed. Cl. at 14. 

Here, Congress has had ample opportunity to modify, suspend, or eliminate the statutory 

obligation to make cost-sharing reduction payments but has not done so. Congress’s inaction 

stands in stark contrast to its treatment of the Affordable Care Act’s risk corridors program. 

Under that program, which was established in section 1342 of the Affordable Care Act, the 

Secretary of HHS was required to make annual payments to insurers pursuant to a statutory 

formula. 42 U.S.C. § 18062; Moda Health Plan, 892 F.3d at 1320. However, Congress included 

riders in two appropriations acts enacted after the Affordable Care Act that prohibited 

appropriated funds from being used to make risk corridors payments. See Consolidated 

Appropriations Act, 2016, Pub. L. No. 114-113, div. H, tit. II, § 225, 129 Stat. 2242, 2624; 

Consolidated and Further Continuing Appropriations Act, 2015, Pub. L. No. 113-235, div. G, tit. 

II, § 227, 128 Stat. 2130, 2491. These riders have been interpreted to suspend the government’s 

obligation to make risk corridors payments from appropriated funds. Moda Health Plan, 892 

F.3d at 1322-29. Congress has never enacted any such appropriations riders with respect to costsharing reductions payments, even when cost-sharing reduction payments were being made––

during both the Obama and Trump administrations––from the permanent appropriation for tax 

credits described in 31 U.S.C. § 1324. Thus, the congressional inaction in this case may be 

interpreted, contrary to defendant’s contention, as a decision not to suspend or terminate the 

government’s cost-sharing reduction payment obligation.18

 In short, Congress’s failure to appropriate funds to make cost-sharing reduction payments 

through annual appropriations acts or otherwise does not reflect a congressional intent to 

foreclose, either temporarily or permanently, the government’s liability to make those payments. 

2. Plaintiff Can Recover Unpaid Cost-Sharing Reduction Reimbursements in the United 

States Court of Federal Claims

 Plaintiff asserts that because the government has breached its statutory obligation to make 

cost-sharing reduction payments, recovery is available in the United States Court of Federal 

Claims (“Court of Federal Claims”) under the Tucker Act. The Tucker Act, the principal statute 

governing the jurisdiction of this court, waives sovereign immunity for claims against the United 

States, not sounding in tort, that are founded upon the United States Constitution, a federal 

statute or regulation, or an express or implied contract with the United States. 28 U.S.C. 

§ 1491(a)(1) (2012). It is merely a jurisdictional statute and “does not create any substantive 

right enforceable against the United States for money damages.” United States v. Testan, 424 

U.S. 392, 398 (1976). Instead, the substantive right must appear in another source of law, such 

as a “money-mandating constitutional provision, statute or regulation that has been violated, or 

 18 The court recognizes that drawing inferences from congressional inaction can be 

highly problematic. See Pension Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633, 650 (1990) 

(“Congressional inaction lacks ‘persuasive significance’ because ‘several equally tenable 

inferences’ may be drawn from such inaction . . . .” (quoting United States v. Wise, 370 U.S. 

405, 411 (1962)); Schneidewind v. ANR Pipeline Co., 485 U.S. 293, 306 (1988) (“This Court 

generally is reluctant to draw inferences from Congress’ failure to act.”).
-18- 

an express or implied contract with the United States.” Loveladies Harbor, Inc. v. United States, 

27 F.3d 1545, 1554 (Fed. Cir. 1994) (en banc). It is well accepted that a statute “is moneymandating for jurisdictional purposes if it ‘can fairly be interpreted as mandating compensation 

for damages sustained as a result of the breach of the duties [it] impose[s].’” Fisher v. United 

States, 402 F.3d 1167, 1173 (Fed. Cir. 2005) (panel portion) (quoting United States v. Mitchell, 

463 U.S. 206, 219 (1983)). Under this rule, “[i]t is enough . . . that a statute creating a Tucker 

Act right be reasonably amenable to the reading that it mandates a right of recovery in damages. 

While the premise to a Tucker Act claim will not be ‘lightly inferred,’ a fair inference will do.” 

United States v. White Mountain Apache Tribe, 537 U.S. 465, 473 (2003) (citation omitted). 

The cost-sharing reduction provision of the Affordable Care Act, codified at 42 U.S.C. 

§ 18071, is a money-mandating statute for Tucker Act purposes: the Secretary of HHS is 

required to reimburse insurers for their mandatory cost-sharing reductions, 42 U.S.C. 

§ 18071(c)(3)(A), and his failure to make such payments is a violation of that duty that deprives 

the insurers of money to which they are statutorily entitled. Accord Local Initiative, 142 Fed. Cl.

at 10; Mont. Health Co-op, 139 Fed. Cl. at 217; see also Moda Health Plan, 892 F.3d at 1320 n.2 

(holding that the statute providing for risk corridors payments “is money-mandating for 

jurisdictional purposes”). Consequently, an insurer that establishes that the government failed to 

make the cost-sharing reduction payments to which the insurer was entitled can recover the 

amount due in this court.19 

 Moreover, the lack of a specific appropriation for cost-sharing reduction payments does 

not preclude such a recovery. Appropriations merely constrain government officials’ ability to 

obligate or disburse funds. See Moda Health Plan, 892 F.3d at 1322 (“The Anti-Deficiency Act 

simply constrains government officials. . . . Budget authority is not necessary to create an 

obligation of the government; it is a means by which an officer is afforded that authority.”); 

 19 Defendant appears to contend that for plaintiffs to recover under a money-mandating 

statute, they must separately establish that the statute authorizes a damages remedy for its 

violation. Defendant is incorrect. Although some money-mandating statutes include a separate 

provision authorizing a damages remedy, see, e.g., 41 U.S.C. § 7104(b) (2012) (allowing 

contractors to bring claims arising under the Contract Disputes Act of 1978 in the Court of 

Federal Claims), other money-mandating statutes pursuant to which the Court of Federal Claims 

can enter judgment do not, see, e.g., 5 U.S.C. § 5942 (2012) (governing federal employees’ 

entitlement to a remote duty allowance); 37 U.S.C. § 204 (2012) (governing military service 

members’ entitlement to basic pay). Indeed, “[t]o the extent that the Government would demand 

an explicit provision for money damages to support every claim that might be brought under the 

Tucker Act, it would substitute a plain and explicit statement standard for the less demanding 

requirement of fair inference that the law was meant to provide a damages remedy for breach of 

a duty.” White Mountain Apache Tribe, 537 U.S. at 477; accord Fisher, 402 F.3d at 1173 (en 

banc portion) (“[T]he determination that the source is money-mandating shall be determinative 

both as to the question of the court’s jurisdiction and thereafter as to the question of whether, on 

the merits, plaintiff has a money-mandating source on which to base his cause of action.”); Mont. 

Health Co-op, 139 Fed. Cl. at 217 n.5 (“Plaintiffs have never been required to make some 

separate showing that the money-mandating statute that establishes this court’s jurisdiction over 

their monetary claims also grants them an express (or implied) cause of action for damages.”).
-19- 

Ferris v. United States, 27 Ct. Cl. 542, 546 (1892) (“An appropriation per se merely imposes 

limitations upon the Government’s own agents; it is a definite amount of money intrusted to 

them for distribution; but its insufficiency does not pay the Government’s debts, nor cancel its 

obligations, nor defeat the rights of other parties.”). Thus, the lack of an appropriation, standing 

alone, does not constrain the court’s ability to entertain a claim that the government has not 

discharged the underlying statutory obligation or to enter judgment for the plaintiff on that claim. 

See Slattery v. United States, 635 F.3d 1298, 1321 (Fed. Cir. 2011) (en banc) (“[T]he 

jurisdictional foundation of the Tucker Act is not limited by the appropriation status of the 

agency’s funds or the source of funds by which any judgment may be paid.”); N.Y. Airways, 369 

F.2d at 752 (“[T]he failure of Congress or an agency to appropriate or make available sufficient 

funds does not repudiate the obligation; it merely bars the accounting agents of the Government 

from disbursing funds and forces the carrier to a recovery in the Court of Claims.”); Collins, 15 

Ct. Cl. at 35 (remarking that a legal liability “incurred by the United States under . . . the laws of 

Congress,” such as “[t]he compensation to which public officers are legally entitled . . . , exists 

independently of the appropriation, and may be enforced by proceedings in this court”). 

 In fact, judgments of this court are payable from the Judgment Fund, see 31 U.S.C. 

§ 1304(a)(3)(A), which “is a permanent, indefinite appropriation . . . available to pay many 

judicially and administratively ordered monetary awards against the United States,” 31 C.F.R. 

§ 256.1 (2016); accord Bath Iron Works Corp. v. United States, 20 F.3d 1567, 1583 (Fed. Cir. 

1994) (stating that 31 U.S.C. § 1304 “was intended to establish a central, government-wide 

judgment fund from which judicial tribunals administering or ordering judgments, awards, or 

settlements may order payments without being constrained by concerns of whether adequate 

funds existed at the agency level to satisfy the judgment”). Indeed, as applicable here, “funds 

may be paid out [of the Judgment Fund] only on the basis of a judgment based on a substantive 

right to compensation based on the express terms of a specific statute.” Office of Pers. Mgmt. v. 

Richmond, 496 U.S. 414, 432 (1990); accord Moda Health Plan, 892 F.3d at 1326 (“[A]ccess to 

the Judgment Fund presupposes liability.”); cf. 31 U.S.C. § 1304(a)(1) (indicating that the 

Judgment Fund is available when “payment is not otherwise provided for”). Because plaintiff’s 

claim arises from a statute mandating the payment of money damages in the event of its 

violation, the Judgment Fund is available to pay a judgment entered by the court on that claim.20

 20 Defendant acknowledged this possibility in other litigation. See Defs.’ Mem. Supp. 

Mot. Summ. J. 20, Burwell, 185 F. Supp. 3d at 165 (No. 1:14-cv-01967-RMC) (“The 

[Affordable Care] Act requires the government to pay cost-sharing reductions to issuers. The 

absence of an appropriation would not prevent the insurers from seeking to enforce that statutory 

right through litigation. Under the Tucker Act, a plaintiff may bring suit against the United 

States in the Court of Federal Claims to obtain monetary payments based on statutes that impose 

certain types of payment obligations on the government. If the plaintiff is successful, it can 

receive the amount to which it is entitled from the permanent appropriation Congress has made 

in the Judgment Fund. The mere absence of a more specific appropriation is not necessarily a 

defense to recovery from that Fund.” (citations omitted)); Defs.’ Mem. Opp’n Pl.’s Mot. Summ. 

J. 12-13, Burwell, 185 F. Supp. 3d at 165 (No. 1:14-cv-01967-RMC) (“Indeed, had Congress not 

permanently funded the cost-sharing reductions, it would have exposed the government to 

litigation by insurers, who could bring damages actions under the Tucker Act premised on the 

government’s failure to make the mandatory cost-sharing reduction payments that the Act 
-20- 

3. Plaintiff Is Entitled to Recover Unpaid Cost-Sharing Reduction Reimbursements

Plaintiff seeks to recover the cost-sharing reduction payments it did not receive for 2017 

and 2018. As noted above, plaintiff has established that the government is obligated to 

reimburse it for its cost-sharing reductions pursuant to 42 U.S.C. § 18071(c)(3)(A) and that the 

government stopped making such reimbursements in October 2017. Accordingly, as the court 

determined in its February 15, 2019 Opinion and Order, plaintiff is entitled to recover the costsharing reduction payments that the government did not make for 2017. 

 With respect to 2018, defendant contends––as discussed above, albeit in the course of 

arguing that the structure of the Affordable Care Act reflects a congressional intent to preclude 

cost-sharing reduction payments absent an appropriation for that purpose––that plaintiff’s ability 

to increase the premiums for its silver-level qualified health plans to obtain greater premium tax 

credit payments precludes recovery under the Act’s cost-sharing reduction provision. 

Specifically, defendant asserts that the statutory scheme enacted by Congress permits insurers to 

make up any lost cost-sharing reduction payments by increasing silver-level plan premiums, 

which would prevent monetary injury to insurers. Defendant also expresses concern that 

allowing insurers to both obtain greater premium tax credits and obtain a judgment for their lost 

cost-sharing reduction payments would provide an unwarranted windfall for insurers. As noted 

above, the court is not convinced by defendant’s arguments. Accordingly, it finds that plaintiff 

may recover the cost-sharing reduction payments that the government did not make for 2018. 

B. Breach of an Implied-in-Fact Contract

In addition to alleging that the government violated its statutory obligation to make costsharing reduction payments, plaintiff contends that the government’s failure to make such 

payments amounts to a breach of an implied-in-fact contract. “An agreement implied in fact is 

‘founded upon a meeting of minds, which, although not embodied in an express contract, is 

inferred, as a fact, from conduct of the parties showing, in the light of the surrounding 

circumstances, their tacit understanding.’” Hercules, Inc. v. United States, 516 U.S. 417, 424 

(1996) (quoting Balt. & Ohio R. Co. v. United States, 261 U.S. 592, 597 (1923)). To establish 

the existence of an implied-in-fact contract with the United States, a plaintiff must demonstrate 

“(1) mutuality of intent to contract, (2) consideration, (3) lack of ambiguity in offer and 

acceptance, and (4) authority on the part of the government agent entering the contract.” Suess 

 

requires.”); Defs.’ Reply Mem. Supp. Mot. Summ. J. 9, Burwell, 185 F. Supp. 3d at 165 (No. 

1:14-cv-01967-RMC) (“[T]he House’s interpretation of the [Affordable Care Act]—under which 

the Act would require the government to make the cost-sharing payments but provide no 

appropriation for doing so directly—would invite potentially costly lawsuits under the Tucker 

Act. The House asserts that insurers could not prevail in such suits ‘[a]bsent a valid 

appropriation.’ But courts have held that the absence of an appropriation does not necessarily 

preclude recovery from the Judgment Fund in a Tucker Act suit. The House does not explain 

how, given this precedent, the government could avoid Tucker Act litigation by insurers in the 

wake of a ruling that the ACA did not permanently fund the cost-sharing reduction payments that 

the Act directs the government to make.” (citations omitted)).
-21- 

v. United States, 535 F.3d 1348, 1359 (Fed. Cir. 2008); accord Trauma Serv. Grp. v. United 

States, 104 F.3d 1321, 1326 (Fed. Cir. 1997). Here, plaintiff generally alleges that the promise 

of cost-sharing reduction payments set forth in 42 U.S.C. § 18071(c)(3)(A) induced it to offer 

qualified health plans on the exchange, and that by offering such plans, it accepted the 

government’s offer and entered into unilateral contract. Alternatively, plaintiff contends that it 

entered into bilateral contracts with the government, culminating in the execution of the QHPI 

Agreements, in which the parties agreed that plaintiff was required to offer cost-sharing 

reductions to its eligible insureds.21 In response, defendant argues that plaintiff has not 

established the existence of a valid implied-in-fact contract with the government for three 

reasons: the Affordable Care Act did not create an implied-in-fact contract to make cost-sharing 

reduction payments, HHS lacks the authority to enter into a contract to make cost-sharing 

reduction payments, and the QHPI Agreements preclude the existence of an implied-in-fact 

contract to make cost-sharing reduction payments.

 The court first addresses plaintiff’s contention that 42 U.S.C. § 18071(c)(3)(A) is an offer 

to make cost-sharing reduction payments to insurers that offered qualified health plans on the 

exchanges. The Supreme Court has provided the following guidance: 

[A]bsent some clear indication that the legislature intends to bind itself 

contractually, the presumption is that “a law is not intended to create private 

contractual or vested rights but merely declares a policy to be pursued until the 

legislature shall ordain otherwise.” This well-established presumption is 

grounded in the elementary proposition that the principal function of a legislature 

is not to make contracts, but to make laws that establish the policy of the state. 

Policies, unlike contracts, are inherently subject to revision and repeal, and to 

construe laws as contracts when the obligation is not clearly and unequivocally 

expressed would be to limit drastically the essential powers of a legislative body. 

. . . Thus, the party asserting the creation of a contract must overcome this wellfounded presumption, and we proceed cautiously both in identifying a contract 

within the language of a regulatory statute and in defining the contours of any 

contractual obligation. 

Nat’l R.R. Passenger Corp. v. Atchison, Topeka & Santa Fe Ry. Co., 470 U.S. 451, 465-66 

(1985) (citations omitted) (quoting Dodge v. Bd. of Educ., 302 U.S. 74, 79 (1937)); accord Moda 

 21 The difference between unilateral and bilateral contracts was explained in the 

Restatement (First) of Contracts: “A unilateral contract is one in which no promisor receives a 

promise as consideration for his promise. A bilateral contract is one in which there are mutual 

promises between two parties to the contract; each party being both a promisor and a promisee.” 

Restatement (First) of Contracts § 12 (Am. Law Inst. 1931). However, that terminology was 

removed from the Restatement (Second) of Contracts. See Restatement (Second) of Contracts 

§ 1 cmt. f (Am. Law Inst. 1981) (“Section 12 of the original Restatement defined unilateral and 

bilateral contracts. It has not been carried forward because of doubt as to the utility of the 

distinction, often treated as fundamental, between the two types.”). Given the court’s resolution 

of plaintiff’s claim, the distinction is not relevant in this case.
-22- 

Health Plan, 892 F.3d at 1329; Brooks v. Dunlop Mfg. Inc., 706 F.3d 624, 630-31 (Fed. Cir. 

2012). 

To determine whether 42 U.S.C. § 18071(c)(3)(A) “gives rise to a contractual obligation, 

‘it is of first importance to examine the language of the statute.’” Nat’l R.R. Passenger Corp., 

470 U.S. at 466 (quoting Dodge, 302 U.S. at 78); accord Brooks, 706 F.3d at 631. Plaintiff does 

not, and cannot, contend that the statute alone contains language manifesting an intent to 

contract. Rather, it asserts that the combination of the statute, the implementing regulations, and 

the government’s conduct in making cost-sharing reduction payments until October 2017 reflects 

the parties’ intent to contract. In support of its position, plaintiff relies primarily on Radium 

Mines, Inc. v. United States, 153 F. Supp. 403 (Ct. Cl. 1957). In that case, the United States 

Atomic Energy Commission issued a regulation titled “Ten Year Guaranteed Minimum Price,” 

which provided: 

To stimulate domestic production of uranium and in the interest of the common 

defense and security the United States Atomic Energy Commission hereby 

establishes the guaranteed minimum prices specified in paragraph (b) of this 

section, for the delivery to the Commission, in accordance with the terms of this 

section during the ten calendar years following its effective date . . . , of domestic 

refined uranium, high-grade uranium-bearing ores and mechanical concentrates, 

in not less than the quantity and grade specified in paragraph (e) of this section. 

Id. at 404 (quoting 10 C.F.R. § 60.1(a) (1949)). The court rejected the defendant’s contention 

that the regulation was “a mere invitation to the industry to make offers to the Government” and 

instead agreed with the plaintiff that the regulation “was an offer, which ripened into a contract 

when it was accepted by the plaintiff’s putting itself in a position to supply the ore or the refined 

uranium described in it.” Id. at 405. 

The argument raised by plaintiff here is similar to the one advanced by the plaintiff in 

Moda Health Plan with respect to the risk corridors program. The risk corridors program was 

one of three programs established in the Affordable Care Act to mitigate the risk faced by 

insurers “and discourage insurers from setting higher premiums to offset that risk,” Moda Health 

Plan, 892 F.3d at 1314, pursuant to which the Secretary of HHS was required to make annual 

payments to insurers in accordance with a statutory formula, id. at 1320; 42 U.S.C. § 18062. The 

United States Court of Appeals for the Federal Circuit concluded in Moda Health Plan that “the 

overall scheme of the risk corridors program lacks the trappings of a contractual arrangement 

that drove the result in Radium Mines,” explaining: 

[In Radium Mines], the government made a “guarantee,” it invited uranium 

dealers to make an “offer,” and it promised to “offer a form of contract” setting 

forth “terms” of acceptance. Not so here. 

 The risk corridors program is an incentive program designed to encourage 

the provision of affordable health care to third parties without a risk premium to 

account for the unreliability of data relating to participation of the exchanges—

not the traditional quid pro quo contemplated in Radium Mines. Indeed, an 
-23- 

insurer that included that risk premium, but nevertheless suffered losses for a 

benefit year as calculated by the statutory and regulatory formulas would still be 

entitled to seek risk corridors payments. 

892 F.3d at 1330 (citations omitted). It further observed that the dispute in Radium Mines was 

distinguishable: 

[T]he parties in Radium Mines, one of which was the government, never disputed 

that the government intended to form some contractual relationship at some time 

throughout the exchange. The only question there was whether the regulations 

themselves constituted an offer, or merely an invitation to make offers. Radium 

Mines is only precedent for what it decided. 

Id. Accordingly, it concluded that “no statement by the government evinced an intention to form 

a contract” to make risk corridors payments, and that “[t]he statute, its regulations, and HHS’s 

conduct all simply worked towards crafting an incentive program.” Id. 

The risk corridors program differs from the cost-sharing reduction program in one 

significant manner: in the risk corridors program, insurers receive payments as an incentive to 

lower their premiums, while in the cost-sharing reduction program, insurers are reimbursed by 

the government for cost-sharing reductions that they are statutorily required to make. In other 

words, the cost-sharing reduction program is less of an incentive program and more of a quid pro 

quo. Accordingly, that aspect of Moda Health Plan’s analysis is inapplicable in this case.22 

Accord Local Initiative, 142 Fed. Cl. at 17. 

In fact, although 42 U.S.C. § 18071(c)(3)(A) and its implementing regulation (45 C.F.R. 

§ 156.430) do not include language traditionally associated with contracting, such as “offer,” 

“acceptance,” “consideration,” or “contract,” the parties’ intent to enter into a contractual 

relationship can be implied from the quid pro quo nature of the cost-sharing reduction program, 

plaintiff’s offering of qualified health plans on the exchange with the mandated cost-sharing 

reductions, and the government’s reimbursement of plaintiff’s cost-sharing reductions from 

January 2014, when the payments first became due, until October 2017. Accord AycockLindsey Corp. v. United States, 171 F.2d 518, 521 (5th Cir. 1948) (holding that when the head of 

the pertinent agency “published bulletins and promulgated rules providing for the payment of 

subsidies to those . . . who accepted the offer by voluntarily coming under, and complying with, 

the [relevant] Act, there was revealed the traditional essentials of a contract, namely, an offer and 

an acceptance, to the extent that we should hesitate to hold that there was not at least an implied 

contract to pay subsidies,” and further holding that “[i]n view of the numerous requirements for 

the [plaintiff] to put himself in position to receive the payments, we regard the subsidies not as 

gratuities but as compensatory in nature”), cited in Army & Air Force Exch. Serv. v. Sheehan, 

456 U.S. 728, 740 n.11 (1982) (identifying Aycock-Lindsey as a decision in which a contract 

 22 Nevertheless, Moda Health Plan precludes the court from relying on Radium Mines

because, unlike in Radium Mines, the parties in this case dispute whether the government 

intended to form a contractual relationship for the reimbursement of insurers’ cost-sharing 

reductions. 
-24- 

was “inferred from regulations promising payment”). In other words, the government offered to 

reimburse insurers for their mandated cost-sharing reductions, plaintiff accepted that offer by 

offering the qualified health plans with reduced cost-sharing obligations, and consideration was 

exchanged (plaintiff supplied qualified health plans that helped the government reduce the 

number of uninsured individuals, and the government made cost-sharing reduction payments to 

plaintiff).23 

 Moreover, contrary to defendant’s contention, the Secretary of HHS and his delegate, the 

Administrator of CMS, possessed the authority to enter into a contract with insurers to make 

cost-sharing reduction payments. Implied-in-fact contracts with the United States can only be 

made by “an authorized agent of the government.” Trauma Serv. Grp., 104 F.3d at 1326; accord

Kania v. United States, 650 F.2d 264, 268 (Ct. Cl. 1981) (“The claimant for money damages for 

breach of an express or implied in fact contract must show that the officer who supposedly made 

the contract had authority to obligate appropriated funds.”). Specifically, “the Government 

representative ‘whose conduct is relied upon must have actual authority to bind the government 

in contract.’” City of El Centro v. United States, 922 F.2d 816, 820 (Fed. Cir. 1990) (quoting 

Juda v. United States, 6 Cl. Ct. 441, 452 (1984)). Actual authority may be express or implied. 

See Salles v. United States, 156 F.3d 1383, 1384 (Fed. Cir. 1998); H. Landau & Co. v. United 

States, 886 F.2d 322, 324 (Fed. Cir. 1989). “Authority to bind the [g]overnment is generally 

implied when such authority is considered to be an integral part of the duties assigned to a 

[g]overnment employee.” H. Landau & Co., 886 F.2d at 324 (quoting John Cibinic, Jr. & Ralph 

C. Nash, Jr., Formation of Government Contracts 43 (1982)) (alteration in original); see also

United States v. Winstar Corp., 518 U.S. 839, 890 n.36 (1996) (“The authority of the executive 

to use contracts in carrying out authorized programs is . . . generally assumed in the absence of 

express statutory prohibitions or limitations[.]” (quoting 1 Ralph C. Nash, Jr. & John Cibinic, Jr., 

Federal Procurement Law 5 (3d ed. 1977))). 

 There can be no doubt that making cost-sharing reduction payments is an integral part of 

the duties assigned to the Secretary of HHS because the Secretary of HHS is required to make 

such payments pursuant to 42 U.S.C. § 18071(c)(3)(A). Defendant contends, however, that in 

accordance with the Antideficiency Act, the Secretary of HHS lacks actual authority to contract 

for the reimbursement for cost-sharing reductions. The court is not persuaded. The 

Antideficiency Act provides that a government “officer or employee . . . may not . . . involve 

[the] government in a contract or obligation for the payment of money before an appropriation is 

made unless authorized by law[.]” 31 U.S.C. § 1341(a)(1)(B). The reimbursement of costsharing reductions is authorized by law––42 U.S.C. § 18071(c)(3)(A). Thus, the Antideficiency 

Act’s prohibition is inapplicable in this case. Accord N.Y. Airways, 369 F.2d at 752 (“Since it 

has been found that the [agency’s] action created a ‘contract or obligation (which) is authorized 

by law’, obviously the statute [prohibiting contract obligations in excess of appropriated funds] 

has no application to the present situation . . . .”); Local Initiative, 142 Fed. Cl. at 18-19. In 

short, the Secretary of HHS possesses at least the implied actual authority to contractually bind 

the government to make cost-sharing reduction payments. 

 23 Defendant does not contend that there was a lack of consideration. 
-25- 

Defendant further contends that the QHPI Agreements executed by plaintiff and CMS 

preclude the existence of an implied-in-fact contract to make cost-sharing reduction payments. 

As defendant notes, “[t]he existence of an express contract precludes the existence of an implied 

contract dealing with the same subject, unless the implied contract is entirely unrelated to the 

express contract.” Atlas Corp. v. United States, 895 F.2d 745, 754-55 (Fed. Cir. 1990), cited in

Schism v. United States, 316 F.3d 1259, 1278 (Fed. Cir. 2002) (en banc); see also Klebe v. 

United States, 263 U.S. 188, 192 (1923) (“A contract implied in fact is one inferred from the 

circumstances or acts of the parties; but an express contract speaks for itself and leaves no place 

for implications.”). However, the QHPI Agreements only address the reconciliation of costsharing reduction payments, and do not create any duties or obligations to make cost-sharing 

reduction payments in the first instance.24 The relevant provision set forth under the “CMS 

Obligations” heading––“As part of a monthly payments and collections reconciliation process, 

CMS will recoup or net payments due to [plaintiff] against amounts owed to CMS by [plaintiff] 

in relation to offering of [Qualified Health Plans] . . . including . . . advance payments of [CostSharing Reductions],” Agreements 6––merely requires CMS, as part of a monthly reconciliation 

process, to make payments to insurers that underestimated their cost-sharing obligations and 

collect payments from insurers that overestimated their cost-sharing obligations. See Nw. Title 

Agency, Inc. v. United States, 855 F.3d 1344, 1347 (Fed. Cir. 2017) (“When the contract’s 

language is unambiguous it must be given its ‘plain and ordinary’ meaning . . . .” (quoting Coast 

Fed. Bank, FSB v. United States, 323 F.3d 1035, 1040 (Fed. Cir. 2003) (en banc))). Indeed, 

CMS could not “recoup or net payments” to an insurer unless the government had already made 

an advance cost-sharing reduction payment to the insurer. 

 Moreover, the relevant provision in the QHPI Agreements’ recitals––“[i]t is anticipated 

that periodic . . . advance payments of [Cost-Sharing Reductions] . . . will be due between CMS 

and [plaintiff],” Agreements 1–– is not a promise to make advanced cost-sharing reduction 

payments but is merely an expression that such payments were expected. See Nat’l By-Prod., 

Inc. v. United States, 405 F.2d 1256, 1263 (Ct. Cl. 1969) (“Before a representation can be 

contractually binding, it must be in the form of a promise or undertaking . . . and not a mere 

statement of intention, opinion, or prediction.”). In fact, it forms the factual predicate for the 

provision describing CMS’s reconciliation obligations. 

 Furthermore, the QHPI Agreements mostly address the privacy and security obligations 

set forth in 45 C.F.R. § 155.260. Accordingly, the QHPI Agreements concern a subject entirely 

unrelated to the purported implied-in-fact contract, and therefore do not preclude the finding of 

an implied-in-fact contract. 

In sum, plaintiff has established the existence of an implied-in-fact contract to make costsharing reduction payments. Thus, the court also must determine whether plaintiff has 

established that the government has breached the implied-in-fact contract. “To recover for 

breach of contract, a party must allege and establish: (1) a valid contract between the parties, (2) 

an obligation or duty arising out of the contract, (3) a breach of that duty, and (4) damages 

 24 Defendant ultimately concedes this point in its reply brief. See Def.’s Reply 10 (“The 

Government agrees with plaintiff that the QHP[I] Agreements do not establish a contract for the 

payment of [cost-sharing reductions].”). 
-26- 

caused by the breach.” San Carlos Irrigation & Drainage Dist. v. United States, 877 F.2d 957, 

959 (Fed. Cir. 1989); accord Trauma Serv. Grp., 104 F.3d at 1325 (“To prevail, [plaintiff] must 

allege facts showing both the formation of an express contract and its breach.”). Plaintiff has 

established the existence of a valid contract, a government obligation to make cost-sharing 

reduction payments, and the government’s failure to make such payments, leaving only the issue 

of damages. 

 “The general rule in common law breach of contract cases is to award damages that will 

place the injured party in as good a position as he or she would have been [in] had the breaching 

party fully performed.” Estate of Berg v. United States, 687 F.2d 377, 379 (Ct. Cl. 1982). Thus, 

the injured party “must show that but for the breach, the damages alleged would not have been 

suffered.” San Carlos Irrigation & Drainage Dist., 111 F.3d at 1563; accord Boyajian v. United 

States, 423 F.2d 1231, 1235 (Ct. Cl. 1970) (per curiam) (“Recovery of damages for a breach of 

contract is not allowed unless acceptable evidence demonstrates that the damages claimed 

resulted from and were caused by the breach.”). “One way the law makes the non-breaching 

party whole is to give him the benefits he expected to receive had the breach not occurred.” 

Glendale Fed. Bank, FSB v. United States, 239 F.3d 1374, 1380 (Fed. Cir. 2001). These 

expected benefits––expectancy damages––“are recoverable provided they are actually foreseen 

or reasonably foreseeable, are caused by the breach of the promisor, and are proved with 

reasonable certainty.” Bluebonnet Sav. Bank, F.S.B. v. United States, 266 F.3d 1348, 1355 (Fed. 

Cir. 2001); accord Fifth Third Bank v. United States, 518 F.3d 1368, 1374-75 (Fed. Cir. 2008). 

 The injured party has the burden of proving damages caused by the breach of contract. 

See Northrop Grumman Computing Sys., Inc. v. United States, 823 F.3d 1364, 1368 (Fed. Cir. 

2016); accord Bluebonnet Sav. Bank FSB v. United States, 67 Fed. Cl. 231, 238 (2005) 

(explaining that a plaintiff has the burden to prove expectancy damages by demonstrating what 

would have happened but for defendant’s breach of contract), aff’d, 466 F.3d 1349 (Fed. Cir. 

2006). The burden then shifts to the breaching party to establish “that plaintiff’s damages claims 

should be reduced or denied.” Duke Energy Progress, Inc. v. United States, 135 Fed. Cl. 279, 

287 (2017). Here, plaintiff has shown that but for the government’s breach, it would have 

received the full amount of the cost-sharing reduction payments to which it was entitled; there is 

no dispute that plaintiff’s damages were foreseen, caused by the government’s breach, and can 

be determined with reasonable certainty. Defendant has not attempted to rebut plaintiff’s claim 

of breach-of-contract damages, either through argument or evidence.25 Accordingly, plaintiff 

has established its entitlement to breach-of-contract damages in the amount of the unpaid costsharing reduction reimbursements. 

 25 In arguing that the government did not violate 42 U.S.C. § 18071(c)(3)(A), defendant 

asserts that insurers’ ability to increase premiums for their silver-level qualified health plans to 

obtain greater premium tax credit payments, and thus offset any losses resulting from the 

nonpayment of cost-sharing reduction reimbursements, is evidence that Congress did not intend 

to provide a statutory damages remedy for the government’s failure to make the cost-sharing 

reduction payments. However, defendant did not advance a similar argument in responding to 

plaintiff’s breach-of-contract claim. 
-27- 

IV. CONCLUSION

 For the reasons set forth above, the court concludes that the government’s failure to make 

cost-sharing reduction payments to plaintiff violates 42 U.S.C. § 18071 and constitutes a breach 

of an implied-in-fact contract. Therefore, it GRANTS plaintiff’s motion for summary judgment

with respect to the cost-sharing reduction payments it did not receive for 2018. Based on this 

ruling and the ruling set forth in the court’s February 15, 2019 Opinion and Order, plaintiff is 

entitled to recover damages in the amount of $19,230,875.27, which represents $846,493.02 in 

unpaid cost-sharing reduction reimbursements for 2017 and $18,384,382.25 in unpaid costsharing reduction reimbursements for 2018. No costs. The clerk shall enter judgment 

accordingly.

IT IS SO ORDERED.

 s/ Margaret M. Sweeney 

MARGARET M. SWEENEY

Chief Judge