Six States Win Refund of Obamacare Fees

Courthouse News reports:

A federal judge in Texas ordered the government Tuesday evening to pay back six states nearly $840 million in questionable Obamacare fees on state Medicaid programs.

U.S. District Judge Reed O’Connor concluded plaintiffs Texas, Indiana, Kansas, Louisiana, Wisconsin and Nebraska are entitled to disgorgement “as a means of enforcing” the Affordable Care Act’s statutory mandate exempting states from paying the health insurance provider fee, abbreviated as HIPF in court documents.

“The court finds that the [Administrative Procedure Act] and the ACA entitle plaintiffs to disgorgement because the APA waives immunity for ‘a suit seeking to enforce [a] statutory mandate,’ and disgorgement in this case enforces defendant’s compliance with the ACA’s mandate specifically exempting the states from paying the HIPF,” Judge O’Connor wrote in a 17-page ruling.

Led by Texas, the states sued in 2015, claiming the ACA gave no clear notice to states that the fees would be required to continue federal funding for their Medicaid and Child Health Insurance Program, or CHIP. They say that when they found out about the fee, notice was given by a “private entity wielding legislative authority.”

Judge O’Connor explained that the disgorgement would “ordinarily constitute ‘substitute’ relief” that is barred by sovereign immunity because the specific fees cannot be traced, and the states can only ask for the return of the “monetary equivalent” that does not qualify as “specific” relief required for an immunity waiver under the APA.

The struggles of ObamaCare.