On May 16, 2018, the U.S. Court of Appeals for the District of Columbia Circuit granted the parties’ Joint Motion for Remand to vacate the Court’s injunction on HHS’s cost-sharing reduction (CSR) payments. The Joint Motion for Remand flows from the parties’ conditional settlement reached in December 2017, and as explained by the parties, the remand and vacatur would “obviate the need for the courts to decide a dispute between the political branches that those branches are now prepared to resolve amicably.”

Based on the terms of the settlement agreement filed with the Court, it does not appear that CSR payments will be reinstated, but it is clear that the District Court’s injunction will have no binding precedential value on pending or future cases. “[T]he Parties agree that the district court’s holding on the merits should not in any way control the resolution of the same or similar issues should they arise in other litigation, and hereby waive any right to argue that the judgment of the district court or any of the district court’s orders or opinions in this case have any preclusive effect in any other litigation.” A copy of the Joint Motion for Remand can be found here. A copy of the D.C. Court of Appeal’s Order granting remand can be found here.

This suit arose because of CSR payments made by HHS and the U.S. Department of the Treasury under the Affordable Care Act (ACA). CSR payments are subsidy payments made to insurance companies to help offset the costs of silver-level plans, which the ACA requires be available to qualifying low-income consumers with incomes up to 250 percent of the Federal Poverty Level. These plans reduce the amount qualifying consumers pay for deductibles, copayments, and coinsurance. The U.S. House of Representatives filed suit in July 2014, alleging that there was no appropriation for CSR payments and that HHS’s then-ongoing payments should be enjoined. On cross-motions for summary judgment, the District Court ruled for the U.S. House of Representatives on the merits. See U.S. House of Representatives v. Burwell, 185 F. Supp. 3d 165 (D.D.C. 2016). The Court specifically “enjoin[ed] any further reimbursements under Section 1402 until a valid appropriation [was] in place.” Id. at 189. However, the District Court stayed the injunction pending appeal. Id.

Following the presidential election, the Trump administration put the appeal in abeyance, but in May 2017, a coalition of States and the District of Columbia moved to intervene in the appeal, which was granted. HHS then requested a legal opinion from the Attorney General regarding CSR payments, and on October 11, 2017, the Attorney General concluded “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 CSR payments to insurers authorized by 42 U.S.C. § 18071.”  Attorney General Letter at 1 (Oct. 11, 2017). The next day, HHS sent a memorandum to CMS explaining that “CSR payments are prohibited unless and until a valid appropriation exists.”  Memorandum from Acting Sec’y of HHS Eric Hargan to Adm’r of CMS Seema Verma, Payments to Issuers for Cost-Sharing Reductions (CSRs), at 1 (Oct. 12, 2017), available here.

As part of the conditional settlement between the House, HHS, and the interveners, the parties filed a Joint Request for Indicative Ruling with the D.C. District Court asking if the District Court would vacate its injunction upon remand. The District Court issued an indicative ruling stating that if this case were remanded it would grant the requested relief. Request available here; Order available here. Following additional briefing at the request of the D.C. Court of Appeals as to whether “exceptional circumstances” were required for remand and vacatur, the D.C. Court of Appeals granted the requested relief on May 16, 2018.