Nos. 18-1023, 18-1028, and 18-1038

In the Supreme Court of the United States
MAINE COMMUNITY HEALTH OPTIONS, PETITIONER
v.
UNITED STATES OF AMERICA
ON WRITS OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT

BRIEF FOR THE RESPONDENT

NOEL J. FRANCISCO
Solicitor General
Counsel of Record
JOSEPH H. HUNT
Assistant Attorney General
EDWIN S. KNEEDLER
Deputy Solicitor General
HASHIM M. MOOPPAN
Deputy Assistant Attorney
General
JONATHAN C. BOND
Assistant to the Solicitor
General
MARK B. STERN
ALISA B. KLEIN
Attorneys
Department of Justice
Washington, D.C. 20530-0001
SupremeCtBriefs@usdoj.gov
(202) 514-2217

Additional Captions Listed on Inside Cover

 MODA HEALTH PLAN, INC., ET AL., PETITIONERS
v.
UNITED STATES OF AMERICA
LAND OF LINCOLN MUTUAL HEALTH INSURANCE
COMPANY, AN ILLINOIS NONPROFIT MUTUAL
INSURANCE CORPORATION, PETITIONER
v.
UNITED STATES OF AMERICA

 QUESTIONS PRESENTED

In Section 1342 of the Patient Protection and Affordable Care Act (ACA), 42 U.S.C. 18001 et seq., Congress
directed the Department of Health and Human Services
(HHS) to establish a temporary “risk corridors” program for the years 2014, 2015, and 2016. 42 U.S.C.
18062. Under that program, HHS would collect “payments in” from relatively profitable insurers and make
“payments out” to relatively unprofitable insurers pursuant to statutory formulas. Ibid. (capitalization and
emphasis omitted). The ACA did not appropriate any
funding for the risk-corridors program. Instead, Congress deferred the issue of funding to the annual appropriations process. In the appropriations acts that covered the program years, Congress permitted HHS to
use “payments in” to make “payments out,” but it explicitly prohibited HHS from using the only other funds
that were potentially available to make such payments.
HHS accordingly made risk-corridors “payments out”
using only the amounts it had collected from insurers as
“payments in.”
Petitioners brought these actions asserting statutory and implied-in-fact contract claims and seeking
money damages for additional amounts that they
claimed were due to them as “payments out” under the
ACA’s formulas beyond the sums that Congress appropriated. The court of appeals rejected both claims. The
questions presented are as follows:
1. Whether HHS’s compliance with Congress’s
funding limitations is a statutory violation that provides
the basis for damages claims against the United States.
2. Whether insurers have implied-in-fact contracts
with the government entitling them to “payments out.”

(I)

 TABLE OF CONTENTS

Page
Opinions below .............................................................................. 2
Jurisdiction .................................................................................... 2
Statutory provisions involved ...................................................... 3
Statement ...................................................................................... 3
A. Statutory background ............................................... 4
1. The ACA’s expansion of coverage in the
individual health-insurance market .................. 4
2. The ACA’s premium-stabilization
programs ............................................................. 5
3. Congress’s funding decisions for risk
corridors .............................................................. 7
B. Proceedings below................................................... 11
1. Petitioners’ allegations and the trial
court’s rulings ................................................... 11
2. The court of appeals’ decisions.................... 12
Summary of argument ............................................................... 15
Argument:
I. The agency’s compliance with the funding
restrictions Congress imposed was not a
statutory violation giving rise to damages .................. 18
A. The ACA did not impose an obligation,
enforceable through private actions for
damages, to make risk-corridors payments
in excess of appropriations ..................................... 19
1. The ACA’s provision for HHS to make
risk-corridors “payments out” was
contingent on appropriations .......................... 20
2. The ACA did not mandate compensation
to insurers as a remedy for Congress’s own
determinations of whether and to what
extent to fund risk-corridors subsidies .......... 29
3. Petitioners’ contrary arguments invoking
contract-law principles lack merit .................. 34

(III)

 IV
Table of Contents—Continued:

   Page

B. Congress’s subsequent appropriations
legislation superseded any obligation to make
risk-corridors payments beyond the amounts
appropriated ............................................................ 43
1. Congress’s express bar on using the only
potentially available source of funds other
than “payments in” to make “payments
out” limited HHS’s obligation to
disbursing the amounts collected as
“payments in” ................................................... 44
2. Petitioners’ contrary arguments lack merit .. 47
II. Neither Section 1342 nor HHS’s actions created
an implied-in-fact contract with insurers entitling
them to “payments out” ............................................. 53
Conclusion ................................................................................... 57
Appendix — Constitutional, statutory, and regulatory
provisions ........................................................ 1a
TABLE OF AUTHORITIES

Cases:
Aiken County, In re, 725 F.3d 255 (D.C. Cir. 2013) ........ 32
Alexander v. Sandoval, 532 U.S. 275 (2001) ...................... 20
American Bankers Ass’n v. United States,
932 F.3d 1375 (Fed. Cir. 2019) ........................................... 53
American Fed’n of Gov’t Emps., AFL-CIO v.
Federal Labor Relations Auth.,
388 F.3d 405 (3d Cir. 2004) .......................................... 21
Andrus v. Sierra Club, 442 U.S. 347 (1979) ................... 21
Belknap v. United States, 150 U.S. 588 (1893) ................... 51
Bowen v. Massachusetts, 487 U.S. 879 (1988) .... 31, 32, 33
Bowen v. Public Agencies Opposed to Social Sec.
Entrapment, 477 U.S. 41 (1986) ..................................... 54

 V
Cases—Continued:

Page

Cherokee Nation of Oklahoma v. Leavitt,
543 U.S. 631 (2005) ..................................................... 37, 56
Community Health Choice, Inc. v. United States,
141 Fed. Cl. 744 (2019), appeal pending,
No. 19-1633 (Fed. Cir. filed Mar. 8, 2019) ........................ 34
Dahda v. United States, 138 S. Ct. 1491 (2018) .................. 20
Dodge v. Board of Educ., 302 U.S. 74 (1937) ................ 35, 54
Dorsey v. United States, 567 U.S. 260 (2012) ................ 25
Fernandez-Vargas v. Gonzales, 548 U.S. 30 (2006) ..... 51, 52
Ferris v. United States, 27 Ct. Cl. 542 (1892) .................. 33
Fisher v. United States,
402 F.3d 1167 (Fed. Cir. 2005) ....................................... 33
Fletcher v. Peck, 10 U.S. (6 Cranch) 87 (1810) ............... 25
Greenlee County v. United States,
487 F.3d 871 (Fed. Cir. 2007),
cert. denied, 552 U.S. 1142 (2008) .................................. 33
Hall v. Wisconsin, 103 U.S. 5 (1880) ................................... 53
Harford v. United States,
12 U.S. (8 Cranch) 109 (1814) ......................................... 45
Highland Falls-For t Montgomery Cent. Sch. Dist.
v. United States, 48 F.3d 1166 (Fed. Cir.),
cert. denied, 516 U.S. 820 (1995) ....................... 26, 27, 39
Indiana ex rel. Anderson v. Brand,
303 U.S. 95 (1938) ............................................................... 54
King v. Burwell, 135 S. Ct. 2480 (2015) ................... 4, 5, 28
Microsof t Corp. v. i4i Ltd. P’ship,
564 U.S. 91 (2011) ............................................................ 28
Molina Healthcare of California, Inc. v.
United States, 133 Fed. Cl. 14 (2017) ............................... 24
Morton v. Mancari, 417 U.S. 535 (1974) ........................ 25
National R.R. Passenger Corp. v. Atchison, Topeka
& Santa Fe Ry. Co., 470 U.S. 451 (1985) ........ 17, 35, 36, 53

 VI
Cases—Continued:

Page

New York Airways, Inc. v. United States,
369 F.2d 743 (Ct. Cl. 1966) .............................................. 33
OPM v. Richmond, 496 U.S. 414 (1990) .................. 15, 20, 41
Prairie County v. United States,
782 F.3d 685 (Fed. Cir.),
cert. denied, 136 S. Ct. 319 (2015) ............................. 28, 37
Radzanower v. Touche Ross & Co.,
426 U.S. 148 (1976) ....................................................... 26
Rector, Church Wardens, & Vestrymen, of Christ
Church v. County of Philadelphia,
65 U.S. (24 How.) 300 (1861) .............................................. 35
Ricci v. DeStefano, 557 U.S. 557 (2009) ......................... 26
Salazar v. Ramah Navajo Chapter,
567 U.S. 182 (2012) ................................ 36, 37, 38, 39, 40
Slattery v. United States,
635 F.3d 1298 (Fed. Cir. 2011) ....................................... 33
Society for the Propagation of the Gospel v. Wheeler,
22 F. Cas. 756 (C.C.D.N.H. 1814) ..................................... 52
Springdale Convalescent Ctr. v. Mathews,
545 F.2d 943 (5th Cir. 1977),
abrogated on other grounds,
Good Samaritan Hosp. v. Shalala,
508 U.S. 402 (1993).............................................................. 31
Tennessee Valley Auth. v. Hill,
437 U.S. 153 (1978).............................................................. 51
Twenty Per Cent Cases,
87 U.S. (20 Wall.) 179 (1874) .............................................. 52
United States v. Bormes, 568 U.S. 6 (2012) .................. 19, 20
United States v. Dickerson, 310 U.S. 554 (1940) .......... 44, 47
United States v. Langston,
118 U.S. 389 (1886).......................................27, 30, 31, 49, 50
United States v. Mitchell, 109 U.S. 146 (1883) ................... 44

 VII
Cases—Continued:

Page

United States v. Navajo Nation, 556 U.S. 287
(2009) ............................................................... 15, 19, 29, 30
United States v. Vulte, 233 U.S. 509 (1914) ..................... 50
United States v. Will, 449 U.S. 200 (1980) .......... 44, 46, 47
Usery v. Turner Elkhorn Mining Co.,
428 U.S. 1 (1976) ................................................................. 52
Wisconsin & Michigan Ry. Co. v. Powers,
191 U.S. 379 (1903) ....................................................... 54
Constitution, statutes, and regulations:
U.S. Const.:
Art. I, § 9, Cl. 7 (Appropriations Clause) .......... 15, 20, 41
Amend. V (Takings Clause) ........................................... 12
Act of Aug. 4, 1886, ch. 903, 24 Stat. 275 ........................ 30
24 Stat. 281-282 ................................................................ 30
Act of Mar. 3, 1887, ch. 359, 24 Stat. 505 .......................... 30
Act of July 27, 1956, ch. 8, § 1302,
70 Stat. 694-695 (31 U.S.C. 1304(a)) ............................... 29
Administrative Procedure Act, 5 U.S.C. 701 et seq. ...... 32
Anti-Deficiency Act, 31 U.S.C. 1341 et seq.:
31 U.S.C. 1341(a)(1) ................................................... 15, 8a
31 U.S.C. 1341(a)(1)(A) ............................................. 22, 8a
31 U.S.C. 1350 .......................................................... 22, 10a
Consolidated and Further Continuing
Appropriations Act, 2015, Pub. L. No. 113-235,
Div. G, Tit. II, 128 Stat. 2477-2478 ................................ 9
§ 227, 128 Stat. 2491 ............................................ 10, 45, 50
Consolidated Appropriations Act, 2014,
Pub. L. No. 113-76, Div. H, Tit. II, 128 Stat. 374 ...... 8, 9
Consolidated Appropriations Act, 2016,
Pub. L. No. 114-113, Div. H Tit. II, § 225,
129 Stat. 2624 ...................................................................... 10

 VIII
Statutes and regulations—Continued:

Page

Consolidated Appropriations Act, 2017,
Pub. L. No. 115-31, Div. H., Tit. II, § 223,
131 Stat. 543 ........................................................................ 10
Continuing Appropriations Act, 2017,
Pub. L. No. 114-223, Div. C, §§ 103-104,
130 Stat. 909 ........................................................................ 10
Department of Health, Education, and Welfare
Appropriation Act, 1979, Pub. L. No. 95-480,
Tit. II, 92 Stat. 1576 ............................................................ 31
Endangered Species Act of 1973,
16 U.S.C. 1531 et seq. .......................................................... 51
Further Continuing and Security Assistance
Appropriations Act, 2017, Pub. L. No. 114-254,
Div. A, § 101, 130 Stat. 1005-1006 ..................................... 10
Indian Tucker Act, 28 U.S.C. 1505 ................................... 19
Little Tucker Act, 28 U.S.C. 1346(a)(2) ............................ 19
Medicare Act, 42 U.S.C. 1395w-101 et seq.:
42 U.S.C. 1395w-115(a)(2) ........................ 22, 23, 28, 12a
42 U.S.C. 1395w-115(e)(2)(B) ............................. 28, 19a
42 U.S.C. 1396 (1976) ................................................ 31
42 U.S.C. 1396b(a) (1988) .......................................... 31
42 U.S.C. 1396b(a) ..................................................... 32
Patient Protection and Affordable Care Act,
Pub. L. No. 111-148, 124 Stat. 119
(42 U.S.C. 18001 et seq.) ..................................................... 3
§ 1341, 124 Stat. 208-211 (42 U.S.C. 18061) .................... 6
§§ 1341-1343, 124 Stat. 208-213
(42 U.S.C. 18061-18063) ................................................. 5
§ 1342, 124 Stat. 211-212 (42 U.S.C. 18062) ......... passim
§ 1343, 124 Stat. 212-213 (42 U.S.C. 18063) .................... 6
§ 1401(d), 124 Stat. 220 ..................................................... 7
§ 1402, 124 Stat. 220-224 ................................................. 34

 IX
Statutes and regulations—Continued:

Page

§ 2707(e)(1)(B), 124 Stat. 327
(42 U.S.C. 1396a note) .................................................. 22
42 U.S.C. 18001(g)(1) ................................................ 7, 27a
42 U.S.C. 18021(a)(1)(B) ................................................... 5
42 U.S.C. 18031(a)(1) ................................................. 7, 28a
42 U.S.C. 18041 .................................................................. 6
42 U.S.C. 18042(g) ..................................................... 7, 28a
42 U.S.C. 18043(c) ..................................................... 7, 28a
42 U.S.C. 18062 ........................................................ 20, 35a
42 U.S.C. 18062(a) ............................................. 6, 8, 15, 23
42 U.S.C. 18062(b)(1) ........................................................ 7
42 U.S.C. 18062(b)(2) ........................................................ 7
Tucker Act, 28 U.S.C. 1491 ........................................11, 2a
28 U.S.C. 1491(a)(1) ................................................ 19, 2a
Rev. Stat. § 1683 (1878) .............................................30, 49
2 U.S.C. 622(2)(A)(i) ...................................................21, 1a
2 U.S.C. 622(2)(A)(ii)-(iv) ...........................................21, 1a
2 U.S.C. 622(9).................................................................... 21
25 U.S.C. 450j-1(b) (2012) .................................................. 37
26 U.S.C. 36B (2012 & Supp. V 2017) ............................5, 55
31 U.S.C. 701(2)..........................................................21, 5a
31 U.S.C. 1301(d) ............................................15, 21, 25, 28, 56
42 U.S.C. 300gg-93(e) .............................................................. 7
45 C.F.R.:
Pt. 153:
Section 153.500 ......................................................... 7
Section 153.510(b) ................................................7, 56
Section 153.510(c) ................................................7, 56
Pt. 155 ............................................................................. 5
Pt. 156 ................................................................................. 5

 X
Miscellaneous:

Page

1 William Blackstone, Commentaries (1765) ................. 48
Ctrs. for Medicare & Medicaid Servs.,
U.S. Dep’t of Health & Human Servs.,
Early 2019 Effectuated Enrollement Snapshot,
https://go.usa/xVSET (last visited Oct. 21, 2019) ........ 55
Comptroller Gen. of the U.S., Terms Used in the
Budgetary Process (1977) ............................................ 21
160 Cong. Rec. (daily ed. Dec. 11, 2014):
p. H9307 ........................................................................ 10
p. H9838 ................................................................... 10, 48
79 Fed. Reg.:
p. 13,744 (Mar. 11, 2014) ................................................ 8
p. 13,787 (Mar. 11, 2014) ...........................................8, 10
p. 30,240 (May 27, 2014) ............................................... 42
p. 30,260 (May 27, 2014) ............................................... 42
80 Fed. Reg. (Feb. 27, 2015):
p. 10,750 ........................................................................ 42
p. 10,779 ........................................................................ 42
Gov’t Accountability Office:
Department of Health & Human Servs.—Risk
Corridors Program (Sept. 30, 2014),
http://www.gao.gov/assets/670/666299.pdf ........... 8, 9
Principles of Federal Appropriations Law
(rev. 4th ed. 2016) ...................................................... 41
2 Gov’t Accountability Office, Principles of Federal
Appropriations Law (3d ed. 2004) ................................. 41
Office of Mgmt. & Budget, Fiscal Year 2016
Appendix: Budget of the U.S. Government,
https://go.usa.gov/xmHCY (last visited Oct. 21, 2019) ....... 6

 In the Supreme Court of the United States
No. 18-1023
MAINE COMMUNITY HEALTH OPTIONS, PETITIONER
v.
UNITED STATES OF AMERICA
No. 18-1028
MODA HEALTH PLAN, INC., ET AL., PETITIONERS
v.
UNITED STATES OF AMERICA
No. 18-1038
LAND OF LINCOLN MUTUAL HEALTH INSURANCE
COMPANY, AN ILLINOIS NONPROFIT MUTUAL
INSURANCE CORPORATION, PETITIONER
v.
UNITED STATES OF AMERICA
ON WRITS OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE FEDERAL CIRCUIT

BRIEF FOR THE RESPONDENT

(1)

 2
OPINIONS BELOW

The opinion of the court of appeals in No. 18-1023
(18-1023 Pet. App. 1a-2a) is not published in the Federal
Reporter but is reprinted at 729 Fed. Appx. 939. The opinion of the Court of Federal Claims in that case (18-1023
Pet. App. 89a-119a) is reported at 133 Fed. Cl. 1.
The opinion of the court of appeals in No. 18-1028 in
the appeal of petitioner Moda Health Plan, Inc. (Pet.
App. 1-60) 1 is reported at 892 F.3d 1311. The opinion
and order of the Court of Federal Claims in that case
(Pet. App. 85-152) is reported at 130 Fed. Cl. 436.
The opinion of the court of appeals in No. 18-1028 in
the appeal of petitioner Blue Cross and Blue Shield of
North Carolina (Pet. App. 61-62) is not published in the
Federal Reporter but is reprinted at 729 Fed. Appx.
939. The opinion and order of the Court of Federal
Claims in that case (Pet. App. 153-206) is reported at
131 Fed. Cl. 457.
The opinion of the court of appeals in No. 18-1038
(18-1038 Pet. App. 1a-6a) is reported at 892 F.3d 1184.
The opinion and order of the Court of Federal Claims in
that case (18-1038 Pet. App. 70a-140a) is reported at
129 Fed. Cl. 81.
JURISDICTION

The judgments of the court of appeals in No. 18-1023,
and in No. 18-1028 in the appeal of petitioner Blue Cross
and Blue Shield of North Carolina, were entered on
July 9, 2018. The judgments of the court of appeals in
No. 18-1028 in the appeal of petitioner Moda Health
Plan, Inc., and in No. 18-1038 were entered on June 14,
2018. Petitions for rehearing were denied in each case
Unless otherwise indicated, “Pet. App.” refers to the appendix
to the petition for a writ of certiorari in No. 18-1028.
1

 3
on November 6, 2018 (18-1023 Pet. App. 3a-8a). The
petitions for writs of certiorari were filed on February
4, 2019, and granted on June 24, 2019. The jurisdiction
of this Court rests on 28 U.S.C. 1254(1).
STATUTORY PROVISIONS INVOLVED

Pertinent statutory provisions are reprinted in the
appendix to this brief. App., infra, 1a-51a.
STATEMENT

The Patient Protection and Affordable Care Act
(ACA), Pub. L. No. 111-148, 124 Stat. 119 (42 U.S.C.
18001 et seq.), established Health Benefit Exchanges in
which insurance companies could compete for new customers, incurring individually calculated business risks.
The ACA did not require insurers to participate in those
new markets. And it did not require taxpayers to indemnify insurers for their losses if they chose to participate but proved to be unprofitable. Instead, the ACA
established three premium-stabilization programs, under
which transfers would be made among insurers to mitigate some risks.
Petitioners do not dispute that two of those three
programs—risk adjustment and reinsurance—were
properly funded solely with amounts collected from insurers or plans under those programs. Petitioners contend,
however, that the third program—risk corridors—
departed from that model and uniquely exposed the government to uncapped liability to insurers for subsidies in
excess of the amounts Congress appropriated, based on
criteria that depended largely on the insurers’ own business judgments. On petitioners’ theory, insurers collectively are owed approximately $12 billion, and petitioners
are owed hundreds of millions of dollars. Petitioners maintain that they may recover such sums from the government
as money damages and brought these actions to do so.

 4
Congress did not expose the federal fisc to that massive liability for Congress’s own funding determinations. The ACA reserved to future Congresses the determinations whether and to what extent to fund the
risk-corridors program. Congress ultimately determined to appropriate only money collected by the Department of Health and Human Services (HHS) under
the risk-corridors program itself. Federal law prohibited HHS from expending or committing funds beyond
what Congress appropriated. HHS’s compliance with
Congress’s express funding restrictions was not a statutory violation, and the ACA cannot fairly be construed
to authorize damages actions against the United States
for Congress’s exercise of its appropriations prerogative. Nor did the risk-corridors provision create a contract with insurers that HHS breached by faithfully adhering to Congress’s funding limitations. Under wellsettled precedent, the provision is a regulation of actors
in the marketplace, not an offer inviting acceptance that
imposed contractual obligations on the United States.
A. Statutory Background
1. The ACA’s expansion of coverage in the individual
health-insurance market

The ACA contained numerous provisions designed to
expand coverage in the individual health-insurance market. King v. Burwell, 135 S. Ct. 2480, 2485-2487 (2015).
As particularly relevant here, it provided for billions of
dollars of refundable annual tax credits to help individuals pay for insurance. Id. at 2489. The ACA also prohibited insurers from denying coverage or charging
higher premiums based on an individual’s health status.
Id. at 2486.

 5
In addition, the ACA provided for the creation of
Exchanges—online marketplaces in each State where
individuals and small groups can purchase health insurance. King, 135 S. Ct. at 2487. All plans offered through
an Exchange must be Qualified Health Plans, meaning
that they provide “essential health benefits” and comply
with other requirements. 42 U.S.C. 18021(a)(1)(B); see
45 C.F.R. Pts. 155, 156. Insurers had a strong business
incentive to participate in the Exchanges—the only
commercial channel to market plans to the millions of
individuals eligible to receive tax credits. See 26 U.S.C.
36B (2012 & Supp. V 2017); King, 135 S. Ct. at 2493.
Insurers likewise had business reasons to price their
plans competitively.
2. The ACA’s premium-stabilization programs

Like most business opportunities, participation in
the Exchanges presented insurers with business risks.
Among other risks, participating in an Exchange meant
covering an expanded risk pool of persons whose health
status was unknown, and insurers no longer could
charge higher premiums or deny coverage based on a
person’s health. Pet. App. 2, 157. To mitigate pricing
risks, the ACA provided for the establishment of three
premium-stabilization programs, modeled on preexisting
programs established under the Medicare program:
reinsurance, risk corridors, and risk adjustment. ACA
§§ 1341-1343, 124 Stat. 208-213 (42 U.S.C. 18061-18063).
All three programs began operating in 2014. Ibid. The
risk-adjustment program is permanent, but the reinsurance and risk-corridors programs operated only in
2014, 2015, and 2016. Ibid.
All three programs were designed to distribute some
costs and risks among insurers, by using amounts col-

 6
lected from plans with lower costs or risks to fund subsidies to plans with higher costs or risks. Under the reinsurance program, amounts collected from insurers and
self-insured group health plans were used to fund payments to issuers of eligible plans that covered high-cost
individuals in the individual market. ACA § 1341,
124 Stat. 208-211 (42 U.S.C. 18061). Under the riskadjustment program, amounts collected from plans with
healthier-than-average enrollee populations are used to
fund payments to plans with unhealthier-than-average
enrollee populations. § 1343, 124 Stat. 212-213 (42 U.S.C.
18063). 2
These cases concern the third program—“risk
corridors”—under which amounts collected from relatively profitable plans were used to fund payments to
relatively unprofitable plans. ACA § 1342, 124 Stat.
211-212 (42 U.S.C. 18062); see Pet. App. 3. Section 1342
directed HHS to “establish and administer” a program
under which insurers offering individual and smallgroup Qualified Health Plans in 2014, 2015, and 2016
“shall participate in a payment adjustment system
based on the ratio of the allowable costs of the plan to
the plan’s aggregate premiums.” 42 U.S.C. 18062(a).
Section 1342 directed that the “program shall be based”
on an existing risk-corridors program “under [Medicare
Part D].” Ibid.
Amounts collected under the reinsurance and risk-adjustment
programs are distributed under the authority of the ACA itself.
Sections 1341 and 1343 direct each State to collect amounts and
make payments, and Section 1321, 42 U.S.C. 18041, directs HHS to
act on behalf of a State that opted not to do so. In combination, the
provisions establish an appropriation known as a special fund. See,
e.g., Office of Mgmt. & Budget, Fiscal Year 2016 Appendix: Budget
of the U.S. Government 473, https://go.usa.gov/xmHCY.
2

 7
Section 1342 prescribed formulas for determining
whether a plan would be required under the program
established by HHS to make a payment into the program or receive a payment out from HHS and, if so, how
much. If a plan’s “allowable costs” (essentially, the cost
of paying benefits) were less than its aggregate premiums
minus authorized administrative costs (the “target
amount”) by more than three percent, the plan had to
pay a specified percentage of the difference to HHS.
42 U.S.C. 18062(b)(2). These payments were referred to
as “payments in.” Ibid. (capitalization and emphasis omitted). Conversely, if a plan’s allowable costs exceeded its
target amount by more than three percent, Section 1342
stated that the program would provide that HHS “shall
pay” the plan a specified percentage of the difference,
called “payments out,” thus offsetting a portion of the
shortfall of the plan’s target amount compared to its allowable costs. 42 U.S.C. 18062(b)(1) (capitalization and
emphasis omitted). HHS adopted implementing regulations that incorporated this methodology and defined
various terms. 45 C.F.R. 153.500, 153.510(b) and (c).
3. Congress’s funding decisions for risk corridors

For certain ACA programs, the ACA itself provided
funding—either by appropriating funds directly, see,
e.g., 42 U.S.C. 300gg-93(e), 18001(g)(1), 18031(a)(1),
18042(g), 18043(c), or by amending already-existing appropriations to encompass new programs, as the ACA
did for the premium tax credits that were due to begin
in 2014, see § 1401(d), 124 Stat. 220. For risk corridors,
however, it did neither. Instead, Congress left the
determination whether to provide funding for riskcorridors “payments out,” and if so how much, to the
ordinary appropriations process through which Congress generally funds government programs.

 8
Risk-corridors collections and payments could not
begin until 2015, based on a retrospective analysis of data
from 2014. See 42 U.S.C. 18062(a). The issue of funding
thus was first addressed in the appropriations process
for fiscal year 2015. In February 2014, anticipating that
process, several Members of Congress requested the
opinion of the Government Accountability Office (GAO)
“regarding the availability of appropriations to make”
risk-corridors payments. Department of Health &
Human Servs.—Risk Corridors Program, B-325630, at 1
(Sept. 30, 2014), http://www.gao.gov/assets/670/666299.pdf
(GAO Op.). GAO, in turn, solicited the views of HHS.
In its May 2014 response to GAO, HHS identified
only one source of funding: the amounts that HHS
would collect from plans under the risk-corridors program (i.e., “payments in”). 17-1994 C.A. App. (C.A.
App.) 231-233. HHS explained that a provision in the
annually recurring “Program Management” appropriation for HHS’s Centers for Medicare & Medicaid Services (CMS) permitted the expenditure of “such sums
as may be collected from authorized user fees,” and that
this language would permit HHS to use amounts collected under the risk-corridors program to fund riskcorridors payments to insurers. Id. at 232 (quoting
Consolidated Appropriations Act, 2014 (2014 Appropriations Act), Pub. L. No. 113-76, Div. H, Tit. II, 128 Stat.
374). HHS’s response echoed a March 2014 preamble
to risk-corridors regulations stating that HHS would
implement the program “in a budget neutral manner.”
79 Fed. Reg. 13,744, 13,787 (Mar. 11, 2014).
In September 2014, GAO issued its opinion, explaining that “Section 1342, by its terms, did not enact an
appropriation to make the payments specified in” that

 9
provision. GAO Op. 3. GAO thus examined HHS’s appropriations act for fiscal year 2014 and identified two
provisions within the CMS Program Management appropriation that—if reenacted without change—would
(in GAO’s view) allow funds to be used to make riskcorridors payments. Id. at 3-7. First, GAO agreed with
HHS that the user-fee provision would permit HHS to
use “payments in” to fund “payments out.” Id. at 3-6.
Second, GAO additionally concluded that a separate
provision in the Program Management appropriation—
which appropriated a $3.6 billion lump sum from certain
CMS trust funds for the management of particular programs (such as Medicaid and Medicare)—was broad
enough to encompass risk-corridors “payments out.”
Id. at 3-4 (quoting 2014 Appropriations Act, 128 Stat.
374). GAO emphasized, however, that because appropriations acts “are considered nonpermanent legislation,” the two provisions it had analyzed “would need to
be included in the CMS [Program Management] appropriation for FY 2015” in order to make either source of
funds available for risk-corridors payments in fiscal
year 2015. Id. at 6.
Three months later, in December 2014, Congress enacted the appropriations act for HHS for fiscal year
2015. Consolidated and Further Continuing Appropriations Act, 2015 (2015 Appropriations Act), Pub. L. No.
113-235, Div. G, Tit. II, 128 Stat. 2477-2478. The 2015
Appropriations Act reenacted both the user-fee and
lump-sum provisions of the Program Management appropriation. Ibid. But Congress also enacted a proviso
that expressly prohibited the use of funds appropriated
under the lump-sum provision for “payments out” under the risk-corridors program:

 10
None of the funds made available by this Act from [the
CMS trust funds], or transferred from other accounts
funded by this Act to the ‘Centers for Medicare and
Medicaid Services—Program Management’ account,
may be used for payments under section 1342(b)(1) of
Public Law 111-148 (relating to risk corridors).
§ 227, 128 Stat. 2491. Thus, the first time Congress enacted legislation to address funding for the risk-corridors
program, Congress appropriated the amounts that would
be collected from insurers as “payments in,” but simultaneously barred HHS from using the only other funds
that had been identified as potentially available.
In an “explanatory statement” on the bill, the Chairman of the House Committee on Appropriations explained that the legislation ensured that the program
would be self-funded. 160 Cong. Rec. H9307, H9838
(daily ed. Dec. 11, 2014) (statement of Rep. Rogers) (capitalization omitted). “In 2014,” he noted, “HHS issued a
regulation stating that the risk corridor program will be
budget neutral, meaning that the federal government
will never pay out more than it collects from issuers over
the three year period risk corridors are in effect,” and
the appropriations act “include[d] new bill language to
prevent the CMS Program Management appropriation
account from being used to support risk corridors payments.” Ibid.; see 79 Fed. Reg. at 13,787. Congress
reenacted the same restriction in appropriations acts
covering the entire period of the program’s operation. 3
HHS accordingly used only the amounts collected
from insurers to make risk-corridors “payments out.”
Pet. App. 13 & n.1 (citing Pub. L. No. 114-113, Div. H, Tit. II,
§ 225, 129 Stat. 2624; Pub. L. No. 114-223, Div. C, §§ 103-104,
130 Stat. 909; Pub. L. No. 114-254, Div. A, § 101, 130 Stat. 1005-1006;
and Pub. L. No. 115-31, Div. H, Tit. II, § 223, 131 Stat. 543).
3

 11
Pet. App. 13-14. In October 2015, HHS announced that
the total amount of “payments in” for 2014 (approximately $362 million) was well short of the claims it had
received for “payments out” (approximately $2.87 billion) and that HHS thus would issue prorated payments. C.A. App. 244. HHS subsequently explained
that “[t]he remaining 2014 risk corridors payments will
be made from 2015 risk corridors collections, and if necessary, 2016 collections.” Id. at 245. HHS additionally
observed that, if a shortfall remained after 2016, HHS
would “explore other sources of funding for risk corridors payments, subject to the availability of appropriations.” Ibid. In November 2017, HHS published statistics indicating that the total amount collected from insurers for the 2014-2016 period was approximately
$12 billion less than the claims received. Pet. App. 14.
B. Proceedings Below
1. Petitioners’ allegations and the trial court’s rulings

Petitioners are four insurers that elected to participate in the Exchanges and thus sold plans subject to the
risk-corridors program. Petitioners and other such insurers brought dozens of actions against the United
States—including class actions—in the Court of Federal Claims under the Tucker Act, 28 U.S.C. 1491, alleging that they are entitled to the full amount calculated
under the ACA’s formulas for “payments out.” Petitioners asserted statutory claims based on Section 1342 of
the ACA, and three petitioners also asserted impliedin-fact contract claims. All petitioners sought money
damages representing the difference between the
amounts they received in “payments out” and the
amounts they claim they were owed. Pet. App. 14-15,

 12
85-86, 107-110, 153-156, 169-170; 18-1023 Pet. App.
90a-93a; 18-1038 Pet. App. 71a-74a, 87a-91a.
In the cases of three petitioners—Maine Community
Health Options (Maine Community), Blue Cross and
Blue Shield of North Carolina (Blue Cross), and Land
of Lincoln Mutual Health Insurance Company (Land of
Lincoln)—various Court of Federal Claims judges
ruled for the government, dismissing the claims or
granting judgment for the government. Pet. App.
153-206; 18-1023 Pet. App. 89a-119a; 18-1038 Pet. App.
70a-140a. In the case of petitioner Moda Health Plan,
Inc. (Moda), a different judge granted summary judgment to Moda on its statutory and implied-contract
claims. Pet. App. 85-152. 4
2. The court of appeals’ decisions

The court of appeals ruled for the government in all
four cases. Pet. App. 1-39, 61-62; 18-1023 Pet. App.
1a-2a; 18-1038 Pet. App. 1a-4a.
a. The court of appeals first issued its decision in
Moda’s case, reversing the trial court’s ruling in favor
of Moda. Pet. App. 1-39. The court held that Moda had
failed to state a claim for a statutory violation. Id. at
16-35. The court determined that Section 1342 “created
an obligation of the government to pay participants in
the health benefit exchanges the full amount indicated
by the statutory formula for payments out,” but it held
that the appropriations provisos enacted for fiscal year
2015 and subsequent years had “repealed or suspended
Blue Cross and Land of Lincoln also asserted express-contract
claims and claims under the Fifth Amendment’s Takings Clause.
Pet. App. 61, 196-198, 203-204; 18-1038 Pet. App. 4a, 123a-130a,
138a-140a. The lower courts rejected those claims, see ibid., and
those rulings were not challenged in the petitions.
4

 13
[that] obligation.” Id. at 20-21; see id. at 16-35. The
court reasoned that, although “[r]epeals by implication
are generally disfavored, * * *  ‘when Congress desires
to suspend or repeal a statute in force, “there can be no
doubt that . . . it could accomplish its purpose by an
amendment to an appropriation bill, or otherwise.” ’ ”
Id. at 21 (citations omitted). The court determined that
the express restrictions in Congress’s annual appropriations acts “adequately expressed Congress’s intent to
suspend payments on the risk corridors program beyond the sum of payments in.” Ibid. The court found
that those funding restrictions were “[p]lainly” intended to “cap the payments required by the statute at
the amount of payments in for each of the applicable
years.” Id. at 26.
The court of appeals rejected Moda’s argument that,
in enacting those restrictions, Congress had “simply
intended to limit the use of a single source of funding
while leaving others available.” Pet. App. 27. The court
explained that no other funding sources were available
to HHS from which it could make “payments out.” Id.
at 27-30. That was because, “[a]fter GAO identified only
two sources of funding for the risk corridors program—
payments in and the CMS Program Management
fund—Congress cut off access to the only fund drawn
from taxpayers,” the lump-sum appropriation. Id. at 34.
The court held that “Congress could have meant nothing
else but to cap the amount of payments out at the
amount of payments in for each of the three years it
enacted appropriations riders to that effect,” and “the
appropriations riders carried the clear implication of
Congress’s intent to prevent the use of taxpayer funds
to support the risk corridors program.” Id. at 34-35.

 14
The court of appeals also concluded that Moda failed
to state a claim for breach of an implied-in-fact contract.
Pet. App. 35-38. It observed that, under this Court’s
precedent, “[a]bsent clear indication to the contrary,
legislation and regulation cannot establish the government’s intent to bind itself in a contract.” Id. at 35. Section 1342, the court of appeals explained, “contains no
promissory language,” and even Moda did not contend
otherwise. Id. at 36. The court rejected the contention
that an intent to bind the government contractually
could be derived from the combination of Section 1342
and HHS’s subsequent statements and regulations,
concluding that “no statement by the government
evinced an intention to form a contract.” Id. at 38.
Judge Newman dissented. Pet. App. 40-60. In her
view, Congress’s intent in enacting the risk-corridors
appropriations restrictions was unclear absent a “statement in the legislative history suggesting that the rider
was enacted in response to the GAO’s report,” which
she found lacking. Id. at 48. Judge Newman also opined
that “the risk corridors statute is binding contractually,
for the insurers and the Medicare administrator
entered into mutual commitments with respect to the
conditions of performance of the [ACA].” Id. at 59.
b. Based on its opinion in Moda’s case, the court of
appeals affirmed the rulings for the government in the
other three petitioners’ cases. Pet. App. 61-62; 18-1023
Pet. App. 1a-2a; 18-1038 Pet. App. 1a-4a.
c. Petitioners filed petitions for rehearing en banc,
which were denied. 18-1023 Pet. App. 3a-8a. Judges
Newman and Wallach each filed opinions dissenting
from the denial of rehearing en banc. Pet. App. 66-84.

 15
SUMMARY OF ARGUMENT

I. The court of appeals correctly concluded that petitioners cannot obtain damages in these suits under the
Tucker Act for amounts of risk-corridors subsidies that
Congress declined to appropriate.
A. To bring a damages action against the United
States under the Tucker Act premised on an alleged violation of a federal statute, a plaintiff must surmount
“two hurdles,” by establishing: first, that the statute
imposed a duty that the government failed to fulfill; and
second, that the statute “ ‘mandat[es] compensation for
damages sustained as a result of a breach of th[ose] duties.’ ” United States v. Navajo Nation, 556 U.S. 287,
290-291 (2009) (citation omitted). Petitioners cannot
make either showing.
Petitioners’ claim is premised on Section 1342 of the
ACA, which directed HHS to establish the risk-corridors
program. That provision’s text does not confer on
insurers any entitlement to subsidies. Instead, it directed HHS to establish and administer a program
through which it would collect “payments in” from relatively profitable insurers and make “payments out” to
relatively unprofitable insurers according to statutory
formulas. 42 U.S.C. 18062(a). That instruction to the
agency was qualified by the Appropriations Clause,
U.S. Const. Art. I, § 9, Cl. 7, which prohibits payment of
federal funds absent an appropriation, see OPM v.
Richmond, 496 U.S. 414, 424 (1990), and by statutes
that implement the Clause. The Anti-Deficiency Act,
31 U.S.C. 1341(a)(1), prohibits expenditures in excess of
appropriations, on pain of criminal penalties. And
31 U.S.C. 1301(d) makes clear that appropriations cannot be inferred but must be “specifically state[d].” Ibid.
Read together with those statutes, Section 1342 did not

 16
impose an unqualified obligation to make “payments
out” pursuant to the statutory formula. Instead, HHS
was required and empowered to make payments only to
the extent Congress appropriated funds to do so—and
Congress was free to decide whether and to what extent
to fund those subsidies.
The ACA did not appropriate any funding for “payments out,” instead deferring the issue of funding to the
annual appropriations process. In the subsequent appropriations acts that governed the program’s lifespan,
Congress appropriated “payments in” as a funding
source for “payments out” but explicitly barred HHS
from using the only other potentially available funds—
thus ensuring that the risk-corridors program would be
self-funded. HHS distributed funds in accordance with
Congress’s instructions, making risk-corridors “payments out” using only “payments in.”
HHS’s compliance with Congress’s funding limitations is not a breach of a statutory duty, and the ACA
cannot fairly be read to mandate money damages for
Congress’s own funding choices. That would require
imputing to Congress the illogical intention to deem its
own exercise of its appropriations prerogatives a legal
wrong warranting a remedy—and to swap damages
suits under the Tucker Act for subsidies Congress itself
declined to fund. To the extent Congress’s funding decisions left statutory goals partially unfulfilled, petitioners’ proper recourse was to seek further appropriations
from Congress.
Petitioners’ contrary position rests on mischaracterizing Section 1342 as a statutory promise to insurers that
imposed obligations on the government equivalent to a
contract. That argument elides the deeply rooted distinction between statutory provisions and contractual

 17
obligations. A distinct, well-developed body of law governs claims premised on government contracts; indeed,
petitioners unsuccessfully asserted contract claims here.
Petitioners can neither rescue their failed contract
claims by recasting them in statutory terms nor salvage
their meritless statutory claims by invoking inapposite
contract-law rhetoric and case law.
B. Even if Section 1342 alone could properly be read
to impose an unqualified obligation on HHS to make full
“payments out” according to the statutory formula,
Congress’s enactment of appropriations legislation barring HHS from using the only source of funds other
than “payments in” eliminated that obligation. This
Court has long recognized that Congress can modify or
abrogate a statutory requirement through subsequent
appropriations legislation. The import of the appropriations provisions here is unmistakable. As the court of
appeals correctly determined, the clear intent of those
provisions—by their terms and in their statutory
context—was to limit risk-corridors “payments out” to
amounts collected as “payments in.” Petitioners have
tendered no other persuasive explanation for those
carefully calibrated provisions.
II. The court of appeals correctly rejected Moda’s
and Blue Cross’s alternative theory that Section 1342 or
HHS’s actions gave rise to an implied-in-fact contract
that entitled insurers to “payments out” irrespective of
appropriations. This Court has long made clear that
statutes are presumed not to create private contractual
rights absent a “clear indication that the legislature
intends to bind itself contractually.” National R.R. Passenger Corp. v. Atchison, Topeka & Santa Fe Ry. Co.,
470 U.S. 451, 465-466 (1985). Section 1342 “contains no
promissory language from which [courts] could find

 18
such intent.” Pet. App. 36. It is an exercise of Congress’s authority to regulate actors in a marketplace,
not a unilateral contract offer inviting acceptance by
performance. Nor did HHS by its actions subject the
government to contractual obligations. HHS recognized that its risk-corridors expenditures were constrained by available appropriations, and it lacked statutory authority to enter into contracts obligating the
government to pay more than Congress appropriated.
ARGUMENT
I. THE AGENCY’S COMPLIANCE WITH THE FUNDING
RESTRICTIONS CONGRESS IMPOSED WAS NOT A
STATUTORY VIOLATION GIVING RISE TO DAMAGES

Petitioners’ core assertion is that HHS violated a statutory duty to make “payments out” pursuant to Section
1342’s formula by limiting its risk-corridors disbursements to the sum Congress appropriated for that purpose: amounts collected as “payments in.” That contention has matters backwards. HHS was obligated by statute (and the Constitution) not to expend funds in excess
of appropriations, which Congress alone can make. Section 1342 must be read together with the statutes embodying that fundamental principle. HHS’s faithful compliance with Congress’s complete statutory framework certainly did not constitute a statutory violation furnishing
a valid basis for claims for money damages. Congress
was free to determine whether and to what extent to
appropriate funds to implement the risk-corridors program. Nothing in the ACA suggests that Congress
authorized damages suits based on its own funding
determinations. Moreover, even if the ACA as originally
enacted could properly be read to impose such liability,
Congress’s subsequent actions eliminated it.

 19
A. The ACA Did Not Impose An Obligation, Enforceable
Through Private Actions For Damages, To Make RiskCorridors Payments In Excess Of Appropriations

Petitioners seek damages from the United States in
actions under the Tucker Act. That Act provides in pertinent part that the “Court of Federal Claims shall have
jurisdiction to render judgment upon any claim against
the United States founded” on “any Act of Congress or
any regulation of an executive department, or upon any
express or implied contract with the United States.”
28 U.S.C. 1491(a)(1). As that text reflects, the Tucker Act
and its companion statutes—the Little Tucker Act,
28 U.S.C. 1346(a)(2), and the Indian Tucker Act, 28 U.S.C.
1505—“ ‘are simply jurisdictional provisions that operate
to waive sovereign immunity for claims premised on
other sources of law,’ ” and “do not themselves ‘creat[e]
substantive rights. ’ ” United States v. Bormes, 568 U.S.
6, 10 (2012) (citation omitted; brackets in original).
Another source of law must establish the asserted right
and remedy.
The Court has accordingly held that, to proceed on a
damages claim under those Acts, there are “two hurdles
that must be cleared.” United States v. Navajo Nation,
556 U.S. 287, 290 (2009). First, the claimant “must identify a substantive source of law that establishes specific
fiduciary or other duties, and allege that the Government
has failed faithfully to perform those duties.” Ibid. (citation omitted). Second, the claimant must show that the
substantive law “can fairly be interpreted as mandating
compensation for damages sustained as a result of a
breach of the duties [the governing law] impose[s].” Id.
at 291 (citation omitted; brackets in original). Thus, to
obtain damages on their statutory claim here, petitioners
must show both a “failure to perform an obligation

 20
undoubtedly imposed on the Federal Government” by
statute and “a right to monetary relief.” Bormes,
568 U.S. at 15-16; cf. Alexander v. Sandoval, 532 U.S.
275, 286-287 (2001). Petitioners fail at both steps. The
judgments below can and should be affirmed on that basis.
See, e.g., Dahda v. United States, 138 S. Ct. 1491, 14981500 (2018) (affirming on alternative ground).
1. The ACA’s provision for HHS to make risk-corridors
“payments out” was contingent on appropriations

Petitioners’ statutory claim for risk-corridors subsidies is premised on Section 1342. Nothing in that provision, however, confers on insurers an entitlement to
such subsidies (or a particular amount) without regard
to funding. Section 1342’s text does not refer to any
rights of insurers at all. Instead, by its terms Section
1342 merely directed HHS to “establish and administer” a risk-corridors program through which HHS
would make “payments out” to insurers under certain
conditions in accordance with a statutory formula.
42 U.S.C. 18062. Petitioners’ attempt to infer an unqualified, individual entitlement to subsidies from that
direction to the agency fails because Section 1342’s direction was always qualified by the Appropriations
Clause, Art. I, § 9, Cl. 7, and statutes implementing it.
Those qualifications made HHS’s payments contingent
on appropriations by Congress.
a. Under the “straightforward and explicit command of the Appropriations Clause,” “ ‘no money can be
paid out of the Treasury unless it has been appropriated
by an act of Congress.’ ” OPM v. Richmond, 496 U.S.
414, 424 (1990) (citation omitted). Congress permits an
agency to incur financial obligations on behalf of the
government and to spend federal funds by providing the

 21
agency with “budget authority”—such as through “provisions of law that make funds available for obligation
and expenditure.” 2 U.S.C. 622(2)(A)(i). Congress confers that type of budget authority through “appropriations ,” which are “ ‘authorization[s] by an act of the Congress that permit[ ] Federal agencies to incur obligations and to make payments out of the Treasury for
specified purposes’ ” and “ ‘represent limitations of
amounts which agencies may obligate during the time
period specified in the respective appropriations acts.’ ”
Andrus v. Sierra Club, 442 U.S. 347, 359 n.18 (1979)
(quoting Comptroller Gen. of the U.S., Terms Used in
the Budgetary Process 3 (1977)); see 31 U.S.C. 701(2);
cf. 2 U.S.C. 622(2)(A)(ii)-(iv) (other forms of “budget
authority” include “borrowing authority,” “contract
authority,” and authority to offset receipts and collections); 2 U.S.C. 622(9) (defining “entitlement authority”).
Congress has additionally provided that appropriations must be express and cannot be inferred from other
statutory directives. “A law may be construed to make
an appropriation out of the Treasury * * * only if the
law specifically states that an appropriation is made.”
31 U.S.C. 1301(d). Appropriations by implication do not
exist. See American Fed’n of Gov’t Emps., AFL-CIO v.
Federal Labor Relations Auth., 388 F.3d 405, 410 (3d
Cir. 2004).
The Anti-Deficiency Act enforces that command by
forbidding federal agencies from making payments or
incurring obligations unless and until Congress provides the necessary appropriation. That Act provides in
relevant part that, except as otherwise specified, a federal officer or employee may not “make or authorize an
expenditure or obligation exceeding an amount available in an appropriation or fund for the expenditure or

 22
obligation.” 31 U.S.C. 1341(a)(1)(A). That prohibition
is no mere nicety. Knowingly and willfully violating the
Act is a federal crime, punishable by a fine and up to
two years of imprisonment. See 31 U.S.C. 1350.
To be sure, Congress sometimes enacts a statute
that expressly authorizes the expenditure of funds in
advance of ordinary appropriations legislation. For
example, the provision governing the Medicare Part D
risk-corridors program states that “[t]his section constitutes budget authority in advance of appropriations
Acts and represents the obligation of the Secretary [of
HHS] to provide for the payment of amounts provided
under this section.” 42 U.S.C. 1395w-115(a)(2); see also,
e.g., ACA § 2707(e)(1)(B), 124 Stat. 327 (42 U.S.C. 1396a
note). Such a statute explicitly provides authority to obligate federal funds and thus confirms the rule that
agencies may not obligate federal funds without congressional authorization.
It follows that a federal statute instructing an agency
official to pay money, without more, neither requires
nor empowers the official to disburse the funds.
Instead, when such a statute is read together with the
Anti-Deficiency Act, Congress’s complete direction to
the official under the statutory framework is to pay the
money specified if and only if Congress also provides the
necessary appropriation.
b. It is uncontested that the ACA did not appropriate
funds for risk-corridors payments. Unlike certain other
ACA programs for which the ACA either directly appropriated funds or provided funding by amending existing
appropriations, see p. 7, supra, the ACA did neither for
risk corridors. Nor did Congress otherwise grant HHS
authority to commit federal funds in advance of appropriations legislation for that purpose.

 23
In that respect, Section 1342 contrasts starkly with
the provision governing the existing Medicare Part D
risk-corridors program, on which Section 1342 stated
that the ACA’s parallel program “shall be based.”
42 U.S.C. 18062(a). As noted, the Medicare Part D provision states that the provision itself “constitutes
budget authority in advance of appropriations Acts,”
and imposes an “obligation” on the agency, “to provide
for the payment of amounts provided under this section.” 42 U.S.C. 1395w-115(a)(2). In Section 1342, Congress omitted that or any similar language. Congress
thus ensured that Section 1342 would not, standing
alone, cause payments under the ACA’s risk-corridors
program to be an obligation of the federal government.
Instead, Congress’s instruction to HHS was to establish
a program through which it would make such payments
only if and to the extent funds were appropriated, and
HHS’s obligation to make payments was thus contingent
on the existence of such appropriations. Congress
reserved to itself the determination whether and to what
extent to make such appropriations.
Congress subsequently made that determination in
the appropriations acts that governed each year the
ACA’s risk-corridors program operated. Those acts appropriated for making “payments out” only those funds
HHS collected under the program as “payments in.” See
p. 10 & n.3, supra. Indeed, Congress expressly prohibited HHS from using the only other source of funding
that GAO had identified as potentially available to make
risk-corridors “payments out”: the lump-sum appropriation for management of particular CMS programs.
Consistent with Congress’s funding decisions, HHS
made “payments out” using only the amounts collected
as “payments in.” See pp. 8-11, supra.

 24
Petitioners here seek damages for the difference—
i.e., the amounts calculated under the statutory formula
in excess of what HHS collected as “payments in.” Yet
they do not identify any law appropriating funds from
which HHS could have made those further payments.
The trial court in Moda’s case suggested that HHS
could have used the lump sum that was appropriated for
fiscal year 2014 and carried forward by continuing resolutions until December 2014 (in fiscal year 2015). Pet.
App. 129 & n.13 (Wheeler, J.); see Land of Lincoln Br.
38; Moda Br. 14-15. But, contrary to Land of Lincoln’s
contention (Br. 38), the court of appeals expressly and
correctly rejected that suggestion. Pet. App. 27-29. As
it explained, the appropriations the trial court cited
expired in December 2014, but under the terms of Section 1342, “payments out” could not be made until 2015.
Id. at 29. Petitioners identify no error in the panel’s analysis; indeed, they do not confront its reasoning on this
point at all. 5
In short, Section 1342’s direction to HHS to establish
and administer a risk-corridors program of payment
adjustments came with a condition: HHS was neither
required nor authorized to make such payments except
to the extent Congress appropriated funds. Because Congress did not appropriate funds beyond the amounts
collected as “payments in,” HHS’s statutory duty and
The trial court in Moda’s case suggested in a subsequent decision that the Judgment Fund provides a “third option” for funding
risk-corridors payments. Molina Healthcare of California, Inc. v.
United States, 133 Fed. Cl. 14, 35 (2017). As the trial court in Maine
Community’s case correctly observed, however, the existence of the
Judgment Fund is immaterial because “[r]etreat to the Judgment
Fund assumes a liability in the first instance.” 18-1023 Pet. App.
119a.
5

 25
authority extended only to disbursing those collected
amounts.
c. Moda, Blue Cross, and Land of Lincoln never
mention the Anti-Deficiency Act. Maine Community
briefly addresses it, contending (Br. 33) that the AntiDeficiency Act “merely places limits on the ability of
government agents and agencies to create binding commitments for the United States” but “does not place limits on Congress itself.” To be sure, the Anti-Deficiency
Act itself does not preclude Congress from making
binding commitments—for example, by granting budget
authority in advance of appropriations, as in the Medicare Part D risk-corridors program. But Section 1342
did not do so. See pp. 22-23, supra. Congress also could
authorize agencies to enter contracts that obligate the
government. But Section 1342 did not take that approach either. See pp. 53-56, infra.
To the extent Maine Community contends that the
Anti-Deficiency Act does not disable future Congresses
from repealing or making exceptions to that Act’s
restrictions—or to the rule of construction in 31 U.SC.
1301(d) that appropriations must be specifically stated—
that is true but beside the point. Subject to constitutional limitations, Congress can always repeal or amend
an existing statute. See, e.g., Dorsey v. United States,
567 U.S. 260, 274 (2012) (citing Fletcher v. Peck, 10 U.S.
(6 Cranch) 87, 135 (1810)). But Section 1342 cannot fairly
be read as overriding the Anti-Deficiency Act and as obligating HHS to pay billions of dollars that Congress
chose not to appropriate.
“[W]hen two statutes are capable of co-existence, it
is the duty of the courts, absent a clearly expressed congressional intention to the contrary, to regard each as
effective,” Morton v. Mancari, 417 U.S. 535, 551 (1974),

 26
and to harmonize even seemingly inconsistent provisions absent an “irreconcilable conflict,” Radzanower v.
Touche Ross & Co., 426 U.S. 148, 155 (1976); see, e.g.,
Ricci v. DeStefano, 557 U.S. 557, 580-584 (2009). Section 1342 and the Anti-Deficiency Act are readily reconciled by understanding Section 1342 as directing HHS
to make payments if and to the extent funds are appropriated to do so.
The Federal Circuit’s decision in Highland FallsFort Montgomery Central School District v. United
States, 48 F.3d 1166, 1171, cert. denied, 516 U.S. 820
(1995), is illustrative. In Highland Falls, the substantive statute provided that certain school districts “shall
be entitled” to receive amounts of financial assistance
calculated under a statutory formula. Id. at 1168 (citation omitted). But the amounts that Congress appropriated in annual appropriations acts were insufficient for
the Secretary of Education to pay districts the full
amounts under that formula. See id. at 1169. The Secretary thus reduced the payments pro rata. Ibid. The
Federal Circuit rejected the school district’s claim for
damages, reasoning that, by making pro rata reductions
in the amounts to which school districts were entitled,
the Secretary “harmonized the requirements of [the
substantive statute] and the appropriations statutes
with the requirements of [the Anti-Deficiency Act].” Id.
at 1171. Because the Secretary faithfully followed Congress’s directions under the governing statutory framework, including the Anti-Deficiency Act, there was no
statutory violation. See ibid.
So, too, Section 1342 and the Anti-Deficiency Act are
properly harmonized by interpreting Section 1342 to
direct HHS to make “payments out” only to the extent

 27
of appropriations. That reading avoids any conflict between the two statutes. And it avoids imputing to Congress the unlikely intention to depart obliquely from
well-settled principles of appropriations law under the
Constitution and implementing statutes by requiring an
agency to expend funds that Congress has not, by law,
chosen to appropriate.
Indeed, that conclusion is especially clear with
respect to Section 1342. Some statutes, like that Highland Falls, expressly confer an “entitle[ment].” 48 F.3d
at 1168 (citation omitted); see also, e.g., United States v.
Langston, 118 U.S. 389, 390 (1886) (statute provided
that “the representative at Hayti shall be entitled to a
salary of $7500 a year” (citation omitted)). As Highland
Falls correctly held, even that kind of language is
properly understood as qualified by the Anti-Deficiency
Act. See 48 F.3d at 1171. Section 1342, however, does
not even refer to entitlements. It consists solely of a
direction to the agency to establish a program for “payments in” and “payments out,” which necessarily must
be read together with the remainder of Congress’s instructions. Even if statutory language expressly conferring an entitlement to payment were sufficient without more to overcome the Anti-Deficiency Act’s qualification, Section 1342 plainly is not.
Maine Community additionally observes (Br. 28-29)
that some statutes—including some other ACA
provisions—contain qualifications making particular
obligations “subject to the availability of appropriations” or words to similar effect. Maine Community
asserts (Br. 29) that those provisions would be “surplusage” if the “statutory obligations were impliedly conditioned on whether Congress later appropriated money to
meet the obligation.” But there is nothing “implied[ ]”

 28
about the Anti-Deficiency Act’s explicit prohibition on
expending federal funds in excess of appropriations. In
any event, even assuming that the Anti-Deficiency Act
rendered some or all of those qualifications in other provisions superfluous, that alone could not warrant disregarding the Act’s command. This Court has specifically
observed that the “ ‘preference for avoiding surplusage
constructions’ ” is not “a particularly useful guide” in interpreting the ACA. King v. Burwell, 135 S. Ct. 2480,
2492 (citation omitted).
Moreover, “the canon against superfluity” assists
“only where a competing interpretation gives effect ‘to
every clause and word of a statute.’ ” Microsoft Corp. v.
i4i Ltd. P’ship, 564 U.S. 91, 106 (2011) (citation omitted).
Here, Maine Community’s own position would result in
surplusage. On its view, a statutory directive to an
agency to make payment should be interpreted as an unqualified obligation unless the Anti-Deficiency Act’s prohibition or a similar qualification is repeated in the substantive statute. That cannot explain why other statutes
expressly state that a payment mandate is an obligation
of the agency. The Medicare Part D risk-corridors provision, for example, both directs HHS to make Part D
payments, see 42 U.S.C. 1395w-115(e)(2)(B), and states
that the provision “represents the obligation of the Secretary to provide for the payment[s]” mandated,
42 U.S.C. 1395w-115(a)(2). Maine Community’s position would render such language redundant. See also
Prairie County v. United States, 782 F.3d 685, 691
(Fed. Cir.) (noting similar language in other legislation), cert. denied, 136 S. Ct. 319 (2015).
Petitioners thus have offered no valid basis for disregarding the Anti-Deficiency Act or 31 U.S.C. 1301(d) in
construing Section 1342. Read together, the provisions

 29
imposed a conditional obligation on HHS to make “payments out” only if and to the extent Congress appropriated funds. HHS accordingly did not breach any statutory duty by disbursing only the funds appropriated.
2. The ACA did not mandate compensation to insurers as
a remedy for Congress’s own determinations of whether
and to what extent to fund risk-corridors subsidies

Petitioners also fail to demonstrate that the ACA
“mandat[ed] compensation,” Navajo Nation, 556 U.S. at
290 (citation omitted), for “payments out” that were not
paid as a direct result of Congress’s funding decisions.
Nothing in the statutory text or context indicates that
Congress intended its own funding decisions to provide
a basis for damages actions against the United States.
Had the Congress that enacted the ACA wished to
ensure that risk-corridors subsidies would be paid, it
could easily have done so directly by appropriating funds
up front, or by authorizing expenditures in advance of
appropriations legislation—as it did for other ACA programs. But it did not.
It is implausible that Congress eschewed that direct
approach in favor of the roundabout, cumbersome remedy of Tucker Act suits, with eventual recourse to the
Judgment Fund. See Act of July 27, 1956, ch. 8, § 1302,
70 Stat. 694-695 (31 U.S.C. 1304(a)). Congress could not
have viewed after-the-fact litigation as superior to
up-front appropriations. Such suits would consume the
time and resources of all concerned—the government,
insurers, and the courts. And in petitioners’ own telling,
damages awards would come too late to prevent the purportedly adverse effects on the nation’s health-insurance
market that they ascribe to Congress’s funding decisions. Moda Br. 58; Land of Lincoln Br. 19.

 30
We are unaware of any decision of this Court that
interpreted a substantive statute as mandating damages
for Congress’s own decisions not to fund the full amount
of payments provided by statute (as opposed to contract). Petitioners rely heavily on Langston, supra, but
that case did not present the issue. The substantive statute in Langston provided that “[t]he representative” of
the United States “at Hayti shall be entitled to a salary
of $7500 a year.” 118 U.S. at 390 (quoting Rev. Stat.
§ 1683 (1878)). The question presented in Langston was
whether Congress—which had appropriated the full sum
of $7500 for many years—intended to modify that “entitle[ment]” when it appropriated only $5000 in later
years. Ibid. (citation omitted); see id. at 390-392.
Although this Court concluded that Congress did not so
intend, it did not hold that the official was entitled to
damages. The Tucker Act granted the Court of Claims
jurisdiction, see Act of Mar. 3, 1887, ch. 359, 24 Stat. 505,
but no damages could be awarded because no appropriation for such awards yet existed. The Judgment Fund
was not established until 1956. The Court of Claims had
rendered judgment for the plaintiff in the amount
claimed, see Langston, 118 U.S. at 392, but that judgment was merely declaratory absent an appropriation. A
further Act of Congress was required to pay the amount
owed. Act of Aug. 4, 1886, ch. 903, 24 Stat. 275, 281-282.
The Langston Court thus had no occasion to apply
the framework the Court later articulated for Tucker
Act suits seeking damages from the Judgment Fund, by
determining whether the particular substantive statute
on which the plaintiff relied “mandat[ed] compensation”
and thus had authorized a money-damages remedy.
Navajo Nation, 556 U.S. at 290 (citation omitted). The
only relief the claimant could obtain—a declaration of

 31
the government’s obligation—did not require the Court
to decide that separate issue. Moreover, even if the
Langston Court had addressed the issue and concluded
that Congress’s conferral of an “entitle[ment] to a salary” for the official’s services, 118 U.S. at 390 (citation
omitted), also evinced its intention to confer a personal
right to recover, that would not speak to the appropriations issues that arise where a statute merely gives a
direction to an agency to establish a program to collect
and distribute funds but confers no personal entitlement.
Maine Community also relies (Br. 24) on the statement in the dissent in Bowen v. Massachusetts, 487 U.S.
879 (1988), that “a statute commanding the payment of
a specified amount of money by the United States impliedly authorizes (absent other indication) a claim for
damages in the defaulted amount.” Id. at 923 (Scalia,
J., dissenting). The Court, however, did not adopt the
dissent’s view. In that case, a State brought suit against
the government alleging that HHS had wrongfully refused to disburse funds, which Congress had appropriated, to reimburse the State for certain services under
its Medicaid program. Id. at 882, 887-888; see 42 U.S.C.
1396 (1976); Springdale Convalescent Ctr. v. Mathews,
545 F.2d 943, 950 (5th Cir. 1977), abrogated on other
grounds, Good Samaritan Hosp. v. Shalala, 508 U.S.
402, 409-420 (1993); see, e.g., Department of Health, Education, and Welfare Appropriation Act, 1979, Pub. L.
No. 95-480, Tit. II, 92 Stat. 1576. The State’s suit was
premised on a statutory provision that “provide[d] that
[HHS] ‘shall pay’ certain amounts for appropriate Medicaid services.” Massachusetts, 487 U.S. at 900 (quoting
42 U.S.C. 1396b(a) (1988)).

 32
This Court held that the means for enforcing such a
statute directing the agency to expend appropriated
funds is a suit under the Administrative Procedure Act
(APA), 5 U.S.C. 701 et seq. See Massachusetts, 487 U.S.
at 882-883, 891-908. Permitting such an APA suit to enforce an alleged statutory requirement to disburse
money does not disrespect Congress’s funding decisions
because such a suit can proceed only if funds are appropriated. A court in an APA suit could not order an
agency to pay money that Congress did not appropriate.
See, e.g., In re Aiken County, 725 F.3d 255, 259 (D.C. Cir.
2013) (Kavanaugh, J.) (“[I]f Congress appropriates no
money for a statutorily mandated program, the Executive obviously cannot move forward.”).
Having concluded that a suit under the APA was
available, this Court did not decide whether, as the dissent posited, a claim for damages could proceed instead
under the Tucker Act to enforce a requirement to pay
already-appropriated funds. But it expressed skepticism
that such relief would be available. See Massachusetts,
487 U.S. at 905 n.42. The test for “determin[ing] whether
one may bring, pursuant to Tucker Act jurisdiction, a
‘claim against the United States founded . . . upon . . .
any Act of Congress,’ ” the Court explained, is whether it
“ ‘can fairly be interpreted as mandating compensation
by the Federal Government for the damage sustained.’ ”
Ibid. (citations omitted). The Court contrasted Section
1396b(a) with statutes that had been held to satisfy that
test. Id. at 906 n.42. Those statutes all “attempt[ed] to
compensate a particular class of persons for past injuries
or labors,” whereas Section 1396b(a) “direct[ed] the
[agency] to pay money to the State, not as compensation
for a past wrong, but to subsidize” the State’s Medicaid

 33
program. Ibid. The Court found it “likely that while Congress intended ‘shall pay’ language” in those other statutes “to be self-enforcing—i.e., to create both a right and
a remedy—it intended similar language in § 1396b(a) of
the Medicaid Act to provide merely a right.” Ibid.
Indeed, even the dissent in Massachusetts made
clear that its view—that a statutory direction to pay
money “impliedly authorizes” damages—is merely a
general rule and applies only “absent other indication.”
487 U.S. at 923 (Scalia, J., dissenting). Congress’s determination not to appropriate funds for a subsidy program
is a contrary “indication” that would rebut the dissent’s
general presumption. The dissent did not suggest that a
damages remedy can or should be recognized where, as
here, an agency’s nonpayment of particular amounts is
the direct result of Congress’s determination not to appropriate the necessary funds to pay those amounts.
The lower-court decisions on which petitioners rely
(e.g., Maine Community Br. 25-26 & n.10) did not award
damages as a remedy for Congress’s decision not to fund,
in whole or in part, a statutory program. Those decisions
include contract cases, such as Ferris v. United States,
27 Ct. Cl. 542 (1892), and New York Airways, Inc. v.
United States, 369 F.2d 743 (Ct. Cl. 1966) (per curiam),
which are inapposite as discussed below, see pp. 34-40,
infra; cases in which the government prevailed, such as
Greenlee County v. United States, 487 F.3d 871 (Fed.
Cir. 2007), cert. denied, 552 U.S. 1142 (2008); and cases
that addressed jurisdiction, not the merits, such as Slattery v. United States, 635 F.3d 1298 (Fed. Cir. 2011) (en
banc), and Fisher v. United States, 402 F.3d 1167 (Fed.
Cir. 2005) (en banc in part). Petitioners have identified

 34
no relevant precedent that supports the extraordinary
remedy they seek. 6
3. Petitioners’ contrary arguments invoking contractlaw principles lack merit

Unable to carry their burden of showing both (1) that
Section 1342 imposed an unqualified obligation to make
“payments out” irrespective of appropriations and
(2) that Congress authorized damages suits as a remedy, petitioners attempt to lighten that burden by invoking inapposite contract-law principles and rhetoric.
Moda and Blue Cross, for example, repeatedly refer to
Section 1342 as a statutory “promise” (Br. i, 2, 4, 9, 15,
24-27, 46, 54-55, 58-59) that induced “reliance” by insurers (Br. 2, 24, 33, 44-46, 48-49, 53, 58) and that implicates
“the government’s integrity as a contracting partner”
(Br. 25); see Maine Community Br. 4, 20, 23, 27, 29, 45,
46-47, 57; Land of Lincoln Br. 2, 21, 35-36, 41-43, 46-49.
Petitioners apparently hope that, by recasting Section
1342’s qualified instruction to HHS as an unconditional
congressional promise, they can sidestep the showing
required by this Court’s decisions for bringing private
suits under the Tucker Act. That effort fails.
a. The government routinely incurs contractual obligations to private entities, but a distinct, well-developed
legal framework governs government contracts. Any

Recently, in cases involving the cost-sharing subsidies authorized by Section 1402 of the ACA, the Court of Federal Claims has
ruled that insurers are entitled to damages for subsidies not paid
due to the absence of an appropriation. See, e.g., Community
Health Choice, Inc. v. United States, 141 Fed. Cl. 744 (2019)
(Sweeney, C.J.), appeal pending, No. 19-1633 (Fed. Cir. filed Mar.
8, 2019). The lead appeals are fully briefed but not yet scheduled
for argument.
6

 35
claim seeking to enforce putative contractual obligations of the government to make risk-corridors payments must stand or fall under that framework. Indeed,
petitioners separately asserted claims for breach of an
express or implied contract, which the court of appeals
correctly rejected. See pp. 11-12 & n.4, 14, supra. Only
the implied-contract claim is at issue in this Court, see
Br. in Opp. 30-31 & n.7, and it lacks merit for the reasons explained below. See pp. 53-56, infra. 7
Contract-law precepts have no application to petitioners’ statutory claim. Their attempt to elide the distinction between those two distinct bodies of law by borrowing contract-law labels improperly disregards the fundamental difference between statutes and contracts.
“[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.’ ” National R.R. Passenger Corp. v. Atchison, Topeka &
Santa Fe Ry. Co., 470 U.S. 451, 465-466 (1985) (Amtrak)
(quoting Dodge v. Board of Educ., 302 U.S. 74, 79
(1937)); see also Rector, Church Wardens, & Vestrymen, of Christ Church v. County of Philadelphia,
65 U.S. (24 How.) 300, 302 (1861). “This well-established
presumption is grounded in the elementary proposition
Although Maine Community now contends (Br. 27) that the
risk-corridors program “had all of the indicia of a specific contractual exchange,” it never asserted a contract claim below. See Br.
in Opp. 31 n.7; 18-1023 Pet. App. 91a. And although Land of Lincoln asserts (Br. 46) that respecting Congress’s limits on funding
for risk-corridors payments will “wreak havoc on public-private
partnerships,” it abandoned the contract claims it had brought by
failing to address them in its petition for a writ of certiorari. Br. in
Opp. 31 n.7.
7

 36
that the principal function of a legislature is not to make
contracts, but to make laws that establish the policy of
the state.” Amtrak, 470 U.S. at 466. It reflects the reality that “[p]olicies, unlike contracts, are inherently subject to revision and repeal,” and so “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.” Ibid.
Nothing in Section 1342 overcomes that presumption. See Pet. App. 36-38. Section 1342 “contains no
promissory language” from which an intent to contract
could be found. Id. at 36. Petitioners’ refrain that HHS
breached a statutory promise by paying only the
amounts that Congress appropriated thus rings hollow.
b. Petitioners’ reliance on cases from the contractlaw context is likewise misplaced. In particular, petitioners cite Salazar v. Ramah Navajo Chapter, 567 U.S. 182
(2012), in contending that Congress’s limitations on
funding to make risk-corridors “payments out” are irrelevant to the government’s obligation to make such payments. Maine Community Br. 28; Moda Br. 30, 35, 57;
Land of Lincoln Br. 27, 46, 48. But Ramah’s reasoning
turned critically on the fact that the obligations at issue
were contractual.
The statute at issue in Ramah, the Indian SelfDetermination and Education Assistance Act (ISDA),
directed the Secretary of the Interior to enter into contracts with willing tribes, pursuant to which those tribes
would provide services such as education and law enforcement that otherwise would have been provided by the federal government. Ramah, 567 U.S. at 185. ISDA directed
the Secretary to pay the full amount of “contract support
costs” incurred by tribes in performing their contracts.
Ibid. The Court held that the government was required

 37
to “pay each tribe’s contract support costs in full” if “Congress appropriate[d] sufficient funds to pay in full any individual contractor’s contract support costs,” even if Congress did not appropriate “enough funds to cover the aggregate amount due every contractor.” Ibid.; see id. at
189-201.
The Ramah Court stated that its conclusion “followed
directly from well-established principles of Government
contracting law” and “safeguards both the expectations
of Government contractors and the long-term fiscal interests of the United States.” 567 U.S. at 190-191. The
Court explained that “the Government’s obligation to
pay contract support costs should be treated as an ordinary contract promise,” noting that ISDA “ ‘uses the
word ‘contract’ 426 times to describe the nature of the
Government’s promise.’ ” Id. at 189 (quoting Cherokee
Nation of Oklahoma v. Leavitt, 543 U.S. 631, 639 (2005)).
And “Congress expressly provided in ISDA that tribal
contractors were entitled to sue for ‘money damages’ under the Contract Disputes Act upon the Government’s
failure to pay.” Id. at 198 (citation omitted).
As the Federal Circuit has recognized, the contractlaw context was central to Ramah’s determination that
the lack of sufficient appropriations to pay support costs
for all of the contracts did not limit the government’s obligations to any individual contractor. See Prairie
County, 782 F.3d at 689. ISDA contained a proviso stating that “the provision of funds under ISDA is subject to
the availability of appropriations.” Ramah, 567 U.S. at
186 (quoting 25 U.S.C. 450j-1(b) (2012)) (brackets omitted). The Court construed that proviso as being satisfied
so long as Congress appropriated adequate, legally unrestricted funds to pay each individual contract, even if

 38
the appropriation was insufficient to pay all of the contracts in full. Id. at 189-190. That conclusion followed,
the Court stated, from the rule “in the case of ordinary
contracts” that, “if the amount of an unrestricted appropriation is sufficient to fund the contract, the contractor
is entitled to payment even if the agency has allocated
the funds to another purpose or assumes other obligations that exhaust the funds.” Id. at 189 (citation and
emphasis omitted).
Similarly, in rejecting the government’s argument
that its holding “could cause the Secretary to violate the
Anti-Deficiency Act,” the Ramah Court pointed to the
contractual nature of the claims. 567 U.S. at 197. The
Court reasoned that “the Anti–Deficiency Act’s requirements ‘apply to the official, but they do not affect the
rights in this court of the citizen honestly contracting
with the Government.’ ” Ibid. (citation omitted); see also
id. at 197-198 n.7 (expressing “doubt” as to whether the
Anti-Deficiency Act would bar an agency official “obeying an express statutory command to enter a contract”
but reserving judgment on that question because the
“case concern[ed] only the contractual rights of tribal
contractors”). In other words, when the government validly enters a “binding” contractual agreement, id. at 193,
it incurs legal obligations to its contracting partner that
a lack of sufficient appropriations to satisfy all of those
obligations does not, standing alone, erase.
The court of appeals thus was mistaken when it
stated, in dictum, that Ramah required it to interpret
Section 1342 without regard to the Anti-Deficiency Act.
Pet. App. 19. The panel believed it was “of no moment”
that HHS could not have made risk-corridors payments
beyond amounts appropriated “without running afoul of
the Anti-Deficiency Act,” stating that Ramah “rejected

 39
the notion that the Anti-Deficiency Act’s requirements
somehow defeat the obligations of the government.”
Ibid. But Ramah’s analysis of contract claims has no
logical application to claims like petitioners’ that are
premised on statutory directives to agency officials to
pay money Congress has not appropriated.
In the case of a contract, the government’s obligations
are created by the agreement and can be determined by
consulting the agreement itself (subject to any applicable
laws). In contrast, when a claim is predicated on a statute, what obligation if any the statute imposes on the
government in the first place—and whether that obligation is enforceable in a damages action—must be determined by examining that particular statute and any
other relevant enactments. Congress is free, subject to
constitutional principles not at issue here, to qualify
agencies’ statutory authority and duties, and courts
adjudicating claims asserting statutory obligations of the
government must take account of all of Congress’s instructions. Here, the putative statutory obligation that
petitioners seek to enforce is premised on Section 1342’s
instruction to HHS to administer a risk-corridors subsidy program. But Section 1342’s instruction was qualified from its inception by the Appropriations Clause and
Anti-Deficiency Act’s provision implementing the Clause
by forbidding the expenditure of funds Congress has not
appropriated. See Highland Falls, 48 F.3d at 1171.
Moreover, Ramah emphasized that a contractor has
an individualized relationship with the government.
567 U.S. at 191. “[I]t is not reasonable,” the Court
explained, “to expect the contractor to know how much
of [the applicable] appropriation remains available for it
at any given time.” Ibid. (citation omitted). In contrast,

 40
Section 1342 directed HHS to establish a general program applicable to regulated entities in a marketplace,
under which insurers would be dealt with collectively.
Congress is well-equipped to authorize contracts
when it wishes to do so. But the choice is one for Congress. The Court in Ramah emphasized that Congress
can maintain its usual control over appropriations by
declining to mandate or authorize contracts. “Congress
[wa]s not short of options” in that case and could have
“remove[d] the statutory mandate compelling the
[agency] to enter into self-determination contracts.” See
567 U.S. at 200. Section 1342 never imposed a mandate
to enter contracts in the first place. Ramah’s reasoning
and conclusion thus do not apply.
c. Petitioners’ insistence that they relied on Section
1342’s purported promise of “payments out” in electing to
participate in the Exchanges—connoting notions of
estoppel—is similarly unavailing. Under this Court’s
precedent, the dispositive questions are (1) whether the
statute imposed the claimed obligation on the government, and (2) if so, whether the statute, fairly interpreted,
mandates a damages remedy. See pp. 19-20, supra. A
private party’s reliance on its reading of Section 1342 in
isolation, ignoring the constitutional and statutory provisions governing appropriations, is irrelevant. In any
event, petitioners’ reliance argument fails on its own
terms.
To the extent petitioners relied on an expectation
that Congress would fully fund risk-corridors payments, that reliance was inherently unreasonable. In
contrast to contractual commitments that the government is legally obligated to fulfill, private parties can
have no judicially cognizable expectation that a subsidy
program will be funded by future Congresses at all,

 41
much less to the full extent envisioned by the Congress
that enacted it. Petitioners thus could not have reasonably relied on Section 1342 as assurance of future funding.
Nor could an agency’s regulations or statements create a payment obligation that Congress did not authorize. “From [this Court’s] earliest cases, [it] ha[s] recognized that equitable estoppel will not lie against the Government as it lies against private litigants.” Richmond,
496 U.S. at 419. That is especially true in the context of
claims seeking to compel the payment of money by the
government based on alleged representations by the
Executive. The Appropriations Clause is a restraint on
the Executive Branch. “If agents of the Executive were
able, by their unauthorized oral or written statements to
citizens, to obligate the Treasury for the payment of
funds, the control over public funds that the Clause reposes in Congress in effect could be transferred to the
Executive,” which would “render the Appropriations
Clause a nullity.” Id. at 428. Accordingly, it is well settled that “[a] regulation may create a liability on the part
of the government only if Congress has enacted the necessary budget authority.” GAO, Principles of Federal
Appropriations Law 2-2 (rev. 4th ed. 2016). Likewise,
“[i]f a given transaction is not sufficient to constitute a
valid obligation, recording it will not make it one.”
2 GAO, Principles of Federal Appropriations Law 7-8
(3d ed. 2004).
Moreover, HHS repeatedly made clear that its ability to make risk-corridors payments was subject to the
availability of appropriations. In a May 2014 regulation
addressing (inter alia) risk corridors, HHS stated that,
if collections were ultimately insufficient to fund payments, “HHS w[ould] use other sources of funding for
the risk corridors payments, subject to the availability

 42
of appropriations .” 79 Fed. Reg. 30,240, 30,260 (May
27, 2014) (emphasis added). It repeated that notice in
2015 and 2016. See 80 Fed. Reg. 10,750, 10,779 (Feb. 27,
2015) (same); C.A. App. 546 (similar). As the trial judge
who ruled in Moda’s favor noted, “HHS stated repeatedly that it ‘intended to administer risk corridors in a
budget neutral way over the three-year life of the program, rather than annually.’ ” Pet. App. 120 (brackets
and citation omitted). “In other words,” that court
observed, “HHS announced that it would not make full
annual payments.” Ibid. (emphasis omitted). If insurers nevertheless structured their business activities on
the assumption that HHS would make risk-corridors
“payments out” in excess of “payments in,” they did so
at their own risk. 8
Petitioners also attempt to attribute the shortfall of
“payments in” relative to “payments out” to a transitional policy that HHS announced in November 2013,
after insurers had set their premiums for 2014. E.g.,
Moda Br. 10-11. Under the transitional policy, HHS did
not enforce the ACA’s market reforms against issuers
that continued certain noncompliant coverage that they
otherwise would have terminated. See C.A. App.
429-431. Petitioners suggest that the transitional policy
Citing a letter from an HHS official to state insurance commissioners, Land of Lincoln incorrectly states that, “[i]n the summer of
2015, HHS instructed state insurance commissioners who were
reviewing issuers’ proposed 2016 benefit-year rates to assume that
issuers would receive full risk-corridor payments.” Br. 13 & n.16
(citing 17-1224 C.A. App. 289). Land of Lincoln omits the statement
in the letter that, “[t]his spring, CMS announced that preliminary
information about 2014 risk corridors payments and charges will be
made available on August 14, 2015,” and that “these payments
should be taken into account before decisions are made on final
rates.” 17-1224 C.A. App. 289 (emphasis added).
8

 43
had the “marked and predictable effects” of “ ‘dampen[ing] . . . enrollment’ on the [E]xchanges, ‘especially
by healthier individuals.’ ” Moda Br. 10-11 (citation omitted); see id. at 59; see also Land of Lincoln Br. 8-9, 19;
Maine Community Br. 14-15. Even if petitioners were
correct that, but for the transitional policy, “payments
in” would have sufficed to cover “payments out,” that
could not provide a basis for HHS to make, or the courts
below to order, payments of federal funds that Congress did not permit. The particular reason the funding
source Congress appropriated proved inadequate for a
particular purpose is beside the point because Congress
did not impose an unqualified obligation to make “payments out” irrespective of appropriations that is enforceable through damages actions. 9
B. Congress’s Subsequent Appropriations Legislation
Superseded Any Obligation To Make Risk-Corridors
Payments Beyond The Amounts Appropriated

Even assuming arguendo that Section 1342 could
fairly have been read to impose an unqualified duty to
make “payments out” that could be enforced through
damages actions, the court of appeals correctly determined that Congress eliminated any such obligation
through the subsequent appropriations acts. Pet. App.
21-35. The only plausible interpretation of those acts in
context is that Congress intended to limit “payments
out” to the amounts collected as “payments in.”

Moreover, although Moda notes (Br. 10) that it had set premiums for 2014 before the transitional policy was first announced,
Moda neglects to mention that the transitional policy’s extension to
2015 and 2016 was announced in March 2014—before insurers set
their premiums for the 2015 and 2016 years. C.A. App. 449-451.
9

 44
1. Congress’s express bar on using the only potentially
available source of funds other than “payments in” to
make “payments out” limited HHS’s obligation to
disbursing the amounts collected as “payments in”

“[W]hen Congress desires to suspend or repeal a
statute in force, ‘there can be no doubt that . . . it c[an]
accomplish its purpose by an amendment to an appropriation bill, or otherwise.’ ” United States v. Will,
449 U.S. 200, 222 (1980) (quoting United States v. Dickerson, 310 U.S. 554, 555 (1940)) (brackets omitted). “The
whole question depends on the intention of Congress as
expressed in the statutes,” United States v. Mitchell,
109 U.S. 146, 150 (1883), not on whether the later enactment concerns appropriations or other matters.
In decisions dating back more than a century, this
Court has repeatedly applied that principle to find that
appropriations acts did suspend or repeal existing obligations. In Will, for example, the Court concluded that
appropriations acts enacted “in Years 1, 3, and 4, although
phrased in terms of limiting funds, * * * nevertheless
were intended by Congress to block the increases” in
judges’ salaries that an earlier statute “otherwise would
generate.” 449 U.S. at 223. Similarly, in Dickerson, the
Court held that an appropriations act prohibiting the
use of funds to pay military reenlistment allowances
superseded permanent legislation providing that such
allowances shall be paid. 310 U.S. at 554-555. And in
Mitchell, the Court held that, “by the appropriation acts
which cover the period for which the appellee claim[ed]
compensation, Congress expressed its purpose to suspend the operation of ” a prior statute fixing salaries for
interpreters “and to reduce for that period the salaries
of the appellee and other interpreters of the same class.”
109 U.S. at 148.

 45
Applying that same principle, the court of appeals
correctly determined that Congress intended its appropriations acts to limit risk-corridors “payments out” to
the amounts collected as “payments in.” Pet. App.
21-35. That conclusion follows from the appropriations
acts Congress enacted for all relevant years, which simultaneously authorized the use of “payments in” while
expressly barring resort to the only other arguably
available funding source. By the time Congress enacted
the appropriations act for the first year (2015) in which
risk-corridors payments would be made, only two
potential sources of funding had been identified: “payments in,” and the lump sum annually appropriated
from CMS trust accounts for the management of certain
CMS programs. Petitioners have not identified any
other available funding source.
In the 2015 Appropriations Act, Congress permitted
use of the first funding source (“payments in”) but expressly barred HHS from using the second (the lump
sum) to make “payments out.” § 227, 128 Stat. 2491.
Congress reenacted those provisions for each subsequent year of the program. See p. 10 & n.3, supra. The
“necessary and unavoidable” conclusion, Harford v.
United States, 12 U.S. (8 Cranch) 109, 109-110 (1814)
(Story, J.), is that any duty Section 1342 would otherwise
have imposed to make “payments out” as provided in the
statutory formula was limited to the amounts collected
as “payments in.” As the court of appeals recognized,
“Congress could have meant nothing else but to cap the
amount of payments out at the amount of payments in
for each of the three years it enacted appropriations riders to that effect.” Pet. App. 34. Congress “clearly did
not intend” to “consign risk corridors payments ‘to the
fiscal limbo of an account due but not payable.’ ” Id. at

 46
27 (quoting Will, 449 U.S. at 224). Instead, “Congress
made the policy choice to cap payments out, and it remade that decision for each year of the program.” Id.
at 35. As the court put it, “What else could Congress
have intended?” Id. at 27.
Petitioners offer no plausible alternative explanation
of the appropriations restrictions. Moda and Blue
Cross note (Br. 44) that the appropriations acts “limited
the use of funds only from one specific source,” and they
contrast this language with the appropriations acts in
Dickerson that barred the use of funds “in this Act or
any other Act” for payment of reenlistment bonuses.
Moda Br. 43. But that distinction is immaterial here because petitioners have not established that any other
funding source existed from which HHS could have
made “payments out.” Land of Lincoln argues (Br. 50)
that the appropriations provisos could not have modified HHS’s purported obligation to make “payments out”
because those provisos were “temporary,” included
within time-limited appropriations statutes. That is incorrect. As in Dickerson and Will, each appropriations
act capped Section 1342’s payment directive for the period in which the appropriations act was in effect.
Together, the acts covered all years of the program.
Maine Community argues (Br. 34) that Congress
merely intended to delay “full payment” until the end of
the three-year program. But as Moda and Blue Cross
acknowledge (Br. 14-15 n.3), Congress reenacted the
same appropriations proviso after the program ended.
Congress thus ensured that no taxpayer funds could be
used for risk-corridors payments.

 47
2. Petitioners’ contrary arguments lack merit

Petitioners nevertheless maintain that the appropriations acts left intact a purported obligation of HHS to
pay the full sum calculated under Section 1342’s formula. But they offer no sound basis for that conclusion.
a. Petitioners contend that the court of appeals
erred by considering the appropriations acts’ context
and history and should have searched exclusively in
those acts’ text for an express statement that they modified Section 1342. E.g., Moda Br. 27-39; Maine Community Br. 21-27. That contention lacks merit. This
Court has repeatedly looked to legislative context and
history to ascertain Congress’s intent in enacting funding restrictions. In Will, for example, it relied on
“[f ]loor remarks in both Houses” and committee reports
in determining that Congress’s intent was to block
increases in judges’ salaries that the underlying legislation would otherwise generate. 449 U.S. at 223. Likewise, Dickerson cited floor statements and other legislative history in determining that funding restrictions
were intended to suspend reenlistment bonuses for the
covered years. 310 U.S. at 557-562. Rejecting the
argument that it should disregard such materials, the
Court explained that it would be “anomalous to close
our minds to persuasive evidence of intention.” Id. at
562.
The context and history of the risk-corridors appropriations are at least as probative as the contextual support considered in Dickerson and Will. Petitioners do
not suggest that it was mere coincidence that the appropriations acts prohibited HHS from using the only other
source of funding besides “payments in” that GAO had
identified. Nor do they contend that the explanatory
statement by the Chairman of the House Committee on

 48
Appropriations was ambiguous in confirming that the
proviso codified in statute HHS’s announced intention
to operate the risk-corridors program in a budgetneutral manner, “meaning that the federal government
will never pay out more than it collects from issuers
over the three year period risk corridors are in effect.”
160 Cong. Rec. at H9838 (statement of Rep. Rogers).
In any event, the appropriations acts themselves
clearly evince Congress’s intention to limit HHS’s obligation to make “payments out” to the amounts collected
as “payments in.” Even accepting petitioners’ premise
that Section 1342’s formula created an entitlement in
insurers to “payments out,” the appropriations acts
superseded the applicable formula, confining “payments out” to “payments in.” The appropriations acts
are simply irreconcilable with the proposition that HHS
had authority, much less an enforceable duty, to expend
more than amounts collected as “payments in”—or that
Congress left intact any entitlement insurers otherwise
would have had to receive such payments. No additional
legislative explanation is needed if a later statute contradicts an earlier one as a matter of simple arithmetic.
See 1 William Blackstone, Commentaries 89 (1765) (if
an earlier statute provides “that a juror * * * shall have
twenty pounds a year” but “a new statute” provides “he
shall have twenty marks,” the “latter statute” controls).
Similarly, petitioners’ assertion that Congress did
not enact proposed bills that would have achieved the
same result even more explicitly, e.g., Land of Lincoln
Br. 11-12, is beside the point. Drawing a negative inference from Congress’s failure to act is especially unwarranted here, where Congress accomplished the objective by other means. Exercising control over the funding of government programs is the central purpose of

 49
the annual appropriations process. Moda’s description
(Br. 2) of the unbroken string of appropriations acts as
“obscure[ ]” likewise misses the mark. If, as petitioners
posit, those congressional funding decisions caused
start-up insurers to fail and caused premiums to
increase, see Moda Br. 59-60, then Congress was fully
accountable.
b. Petitioners incorrectly contend that Langston,
supra, is inconsistent with the court of appeals’ conclusion here. Maine Community Br. 39-40, 49; Moda Br.
39-41; Land of Lincoln Br. 28-31. As noted, see pp.
30-31, supra, Langston involved a statute providing
that “[t]he representative” of the United States “at
Hayti shall be entitled to a salary of $7500 a year.”
118 U.S. at 390 (quoting Rev. Stat. § 1683 (1878)). For
many years, Congress had appropriated annually the
full sum of $7500, but then for three subsequent years
Congress appropriated only $5000. See id. at 390-392.
Based on a close analysis of the text and context of the
appropriations acts, this Court declined to infer that, by
“merely appropriat[ing] a less amount” than the official’s full salary, Congress had intended to reduce
his salary for the services he rendered in those years.
Id. at 394. The Court deemed it “not probable that
Congress”—presumed to be aware that the official
“had, in virtue of a statute whose object was to fix his
salary, received annually a salary of $7500 from the date
of the creation of his office”—“ma[de] a permanent
reduction of his salary without indicating its purpose to
do so.” Ibid.
Langston’s holding that Congress had not intended
to deprive the official of his full salary for his services
provides no support for petitioners’ claims for subsidies
here. Unlike the statute in Langston, Section 1342

 50
never conferred on petitioners any “entitle[ment]” to
risk-corridors subsidies in the first instance. 118 U.S. at
390 (citation omitted). And in contrast to Langston—
where Congress had appropriated the full amount of the
official’s salary for multiple years before abruptly appropriating a lesser sum without explanation—here Congress never appropriated any funds for risk-corridors
subsidies before the 2015 Appropriations Act. Its determination in that law—when it confronted for the first
time the question whether and to what extent to fund the
program established by HHS—to appropriate only the
amounts collected as “payments in” reflects a calibrated
decision. It was not an inadvertent or unacknowledged
failure to renew an appropriation to fulfill an express
statutory entitlement. To the contrary, the appropriations acts in this case specifically refer to the statutory
provision on which petitioners rely and expressly limit
the availability of appropriations to make payments under that law. See, e.g., 2015 Appropriations Act § 227,
128 Stat. 2491 (none of the funds for CMS management
“may be used for payments under section 1342(b)(1) of
Public Law 111-148 (relating to risk corridors)”). As the
Court has recognized for more than a century, where the
context of an appropriations act reflects “a broader purpose” and consists of “more than the mere omission to
appropriate a sufficient sum,” courts must give effect to
that intent. United States v. Vulte, 233 U.S. 509, 515
(1914).
Unable to shoehorn these cases into Langston’s narrow holding, petitioners seek to extend it far beyond its
facts. But Langston’s reasoning was focused on the
specific enactments and circumstances in that case. See
118 U.S. at 390-392. And more than a century ago—just
seven years after Langston—the Court cautioned

 51
against overreading the decision. In Belknap v. United
States, 150 U.S. 588 (1893), the Court warned that
Langston’s ruling in the claimant’s favor marked “the
limit in that direction.” Id. at 595. Rather than reflexively extend Langston, the Court in Belknap examined
the statutes and context before it and concluded that a
claimant’s salary was limited to amounts subsequently
appropriated. See id. at 595-597. The court of appeals
here likewise properly declined to extend Langston and
instead faithfully applied the principles established by
decades of this Court’s decisions. 10
c. Finally, petitioners incorrectly argue that the
presumption against retroactivity requires the Court
to interpret the appropriations acts as not affecting
any preexisting obligation of HHS to make “payments
out.” See, e.g., Maine Community Br. 45-48. That presumption is inapposite here. “Statutes are disfavored
as retroactive when their application ‘would impair
rights a party possessed when he acted, increase a
party’s liability for past conduct, or impose new duties
with respect to transactions already completed.’ ”
Fernandez-Vargas v. Gonzales, 548 U.S. 30, 37 (2006)
(citation omitted). In this respect, “[t]he modern law
thus follows Justice Story’s definition of a retroactive
statute, as ‘taking away or impairing vested rights acquired under existing laws, or creating a new obligation,
Petitioners also rely on Tennessee Valley Authority v. Hill,
437 U.S. 153 (1978). E.g., Maine Community Br. 42. That case held
(as relevant) only that acts appropriating funds for a particular dam
were not intended to override the substantive requirements of the
Endangered Species Act of 1973, 16 U.S.C. 1531 et seq. See 437 U.S.
at 189-191. Here, by contrast, Congress imposed explicit funding
conditions that eliminated the only potential source of funding for a
particular program other than revenue generated by the program
itself.
10

 52
imposing a new duty, or attaching a new disability, in respect to transactions or considerations already past.’ ”
Ibid. (quoting Society for the Propagation of the Gospel
v. Wheeler, 22 F. Cas. 756, 767 (C.C.D.N.H. 1814) (Story,
J.)) (brackets omitted).
The appropriations provisos here do not implicate
those principles. Neither in appropriating certain funds
for risk-corridors payments nor in forbidding HHS
from using other funds for that purpose did Congress
impair any already-existing rights, increase any existing liability for past conduct, or impose new duties on
insurers. Unlike the employees’ “fixed and vested”
right to certain compensation in the Twenty Per Cent
Cases, 87 U.S. (20 Wall.) 179, 186 (1874), for example,
which Land of Lincoln cites (Br. 43-44), insurers had no
vested right to future subsidies. The ACA itself, which
directed the Secretary to establish the risk-corridors
program, appropriated no funds for that program. Congress addressed funding for the first time in the appropriations act for fiscal year 2015, which simultaneously
appropriated “payments in” by authorizing expenditures from user fees, and foreclosed resort to the
lump-sum program-management appropriation for
“payments out.” That is not retroactive legislation. Indeed, insurers could not have had any entitlement to
“payments out” before 2015 because payments for
2014—the first year of operation—could not even be
calculated until the conclusion of the 2014 calendar year
and the submission of data by plans.
In any event, even if the presumption against retroactivity were implicated, it is overcome where Congress’s intent to do so is clear. See, e.g., Usery v.
Turner Elkhorn Mining Co., 428 U.S. 1, 16 (1976). Congress’s intent to foreclose “payments out” in excess of

 53
“payments in” for the duration of the risk-corridors program is unambiguous. The program operated for only
three years, and Congress included the proviso in
appropriations enactments governing that entire period.
II. NEITHER SECTION 1342 NOR HHS’S ACTIONS
CREATED AN IMPLIED-IN-FACT CONTRACT WITH
INSURERS ENTITLING THEM TO “PAYMENTS OUT”

Petitioners’ contention that they were “promised”
risk-corridors “payments out” (Moda Br. i, 2, 4, 15, 59)
is a contract claim. The only contract claim before the
Court—that of Moda and Blue Cross alleging an
implied-in-fact contract, which they now address only
briefly and in the alternative (Br. 50-53)—fails under
well-settled precedent. The court of appeals correctly
rejected it. Pet. App. 35-38.
A. Section 1342 did not create a contract between insurers and the government by directing the Secretary
to establish a program for more profitable plans to
cross-subsidize less profitable plans. As noted above,
“absent 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.’ ”
Amtrak, 470 U.S. at 456-466 (citation omitted); see
American Bankers Ass’n v. United States, 932 F.3d
1375, 1381-1382 (Fed. Cir. 2019). This Court has found
an intent to contract when a statute “provide[s] for the
execution of a written contract on behalf of ” the government or “speak[s] of a contract” with the government.
Amtrak, 470 U.S. at 467 (emphasis added); see, e.g., Hall
v. Wisconsin, 103 U.S. 5, 8-9 (1880) (statute’s text
directed governor to “make a written contract with each
of the commissioners * * * expressly stipulating and

 54
setting forth the nature and extent of the services to be
rendered by each, and the compensation therefor”); Indiana ex rel. Anderson v. Brand, 303 U.S. 95, 105 (1938)
(state law’s title and text indicated legislature’s intention to enter binding contracts).
In contrast, this Court determined in Dodge that Illinois’ Miller Law did not clearly express the government’s intent to contract. 302 U.S. at 80. As originally
enacted, the Miller Law established a compulsory retirement age for public-school teachers and provided
for the payment of annuities to retired teachers. Id. at
76. The law stated that teachers “who served in the
public schools of such city for twenty or more years
prior to such retirement, shall be paid the sum of fifteen
hundred dollars ($1,500.00) annually and for life from
the date of such retirement.” Ibid. Nearly ten years
after it was passed, the Miller Law was amended to reduce annuity payments to $500 for all retired teachers,
including those who had retired prior to the amendment. Id. at 77. The teachers who filed suit against the
Board of Education argued that they were contractually
entitled to annuity payments at $1500 because the Miller Law constituted an offer to contract, which they had
accepted by remaining in service for at least 20 years.
Id. at 76. The Court rejected that argument, concluding
that neither the statutory language nor context indicated a legislative intent to create binding contractual
obligations. Id. at 79-81; see also Wisconsin & Michigan Ry. Co. v. Powers, 191 U.S. 379, 384 (1903) (no contract created by statute that imposed tax on railroads
but suspended its operation for ten years for railroads
that undertook particular railroad-building projects);
cf. Bowen v. Public Agencies Opposed to Social Sec. Entrapment, 477 U.S. 41, 51-56 (1986) (Congress did not

 55
effect taking by amending statute to prohibit States from
terminating existing agreements with federal agency).
The court of appeals correctly applied those principles here. Pet. App. 36-38. As it explained, nothing in
Section 1342 overcomes the long-established presumption against interpreting a statute to bind the government in contract. Moda did not dispute below that Section 1342 “contains no promissory language” from which
an intent to contract could be found. Id. at 36. Moreover,
insurers that participated in the Exchanges sold insurance to—and entered into contracts with—individuals
and small businesses. They did not furnish any product
or services to the government, which would typically be
an essential element of a contract with the government.
Petitioners’ observation (Moda Br. 52) that insurers
were obligated to make “payments in” regardless of the
funding that Congress provided for “payments out”
underscores that Section 1342 was not a contractual undertaking. That provision was instead one of many regulatory requirements applicable to insurers that opted to
sell plans through the Exchanges. Insurers had powerful business incentives to participate in the Exchanges,
which are the only commercial channel through which
insurers can reach consumers receiving federal subsidies, see 26 U.S.C. 36B (2012 & Supp. V 2017), a market
segment that numbers in the millions. 11 Notably, insurers continue to sell plans on the Exchanges today, even
though the risk-corridors program ended in 2016. In
any event, the fact that Congress imposed those regulatory requirements on this particular market without

See, e.g., CMS, HHS, Early 2019 Effectuated Enrollment Snapshot, https://go.usa.gov/xVSET (approximately 9.25 million individuals received advance premium tax credits in February 2019).
11

 56
establishing a reciprocal obligation on the federal fisc
confirms that it did not create a contract.
B. Moda and Blue Cross have abandoned their prior
contention that HHS entered into contracts to make
risk-corridors payments in excess of the funds appropriated. That argument lacks merit in any event for two
reasons. First, as the court of appeals explained, none
of the agency’s statements “evinced an intention to form
a contract.” Pet. App. 38. The regulations simply
tracked the language of Section 1342, see 45 C.F.R.
153.510(b) and (c), and HHS repeatedly recognized that
its ability make payments was subject to appropriations, see pp. 41-42, supra.
Second, HHS would not have had authority to enter
into binding contracts to make risk-corridors payments
in excess of appropriations. “A law may be construed
* * * to authorize making a contract for the payment of
money in excess of an appropriation only if the law specifically states that * * * such a contract may be made.”
31 U.S.C. 1301(d). Without such “special authority,” this
Court has held, an “officer cannot bind the Government
in the absence of an appropriation.” Cherokee Nation,
543 U.S. at 643. Section 1342 did not give HHS any authority to make contracts for risk-corridors payments,
much less authority to enter into contracts in excess of
appropriations.

 57
CONCLUSION

The judgments of the court of appeals should be
affirmed.
Respectfully submitted.
NOEL J. FRANCISCO
Solicitor General
JOSEPH H. HUNT
Assistant Attorney General
EDWIN S. KNEEDLER
Deputy Solicitor General
HASHIM M. MOOPPAN
Deputy Assistant Attorney
General
JONATHAN C. BOND
Assistant to the Solicitor
General
MARK B. STERN
ALISA B. KLEIN
Attorneys
OCTOBER 2019

 APPENDIX

1.

U.S. Const. Art. I, § 9, Cl. 7 provides:

No money shall be drawn from the Treasury, but in
Consequence of Appropriations made by Law; and a
regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from
time to time.
2.

2 U.S.C. 622(2)(A) provides:

Definitions

For purposes of this Act—
(2) BUDGET
AUTHORITY.—

AUTHORITY

AND

NEW

BUDGET

(A) IN GENERAL.—The term “budget authority”
means the authority provided by Federal law to incur
financial obligations, as follows:
(i)
provisions of law that make funds available for obligation and expenditure (other than borrowing authority), including the authority to obligate and expend the proceeds of offsetting receipts and collections;
(ii) borrowing authority, which means authority granted to a Federal entity to borrow and
obligate and expend the borrowed funds, including
through the issuance of promissory notes or other
monetary credits;
(iii) contract authority, which means the
making of funds available for obligation but not for
expenditure; and
(1a)

 2a
(iv) offsetting receipts and collections as negative budget authority, and the reduction thereof
as positive budget authority.
3.

28 U.S.C. 1491 provides:

Claims against United States generally; actions involving
Tennessee Valley Authority

(a)(1) The United States Court of Federal Claims
shall have jurisdiction to render judgment upon any
claim against the United States founded either upon the
Constitution, or any Act of Congress or any regulation
of an executive department, or upon any express or implied contract with the United States, or for liquidated
or unliquidated damages in cases not sounding in tort.
For the purpose of this paragraph, an express or implied
contract with the Army and Air Force Exchange Service, Navy Exchanges, Marine Corps Exchanges, Coast
Guard Exchanges, or Exchange Councils of the National
Aeronautics and Space Administration shall be considered an express or implied contract with the United
States.
(2) To provide an entire remedy and to complete the
relief afforded by the judgment, the court may, as an incident of and collateral to any such judgment, issue orders directing restoration to office or position, placement in appropriate duty or retirement status, and correction of applicable records, and such orders may be
issued to any appropriate official of the United States.
In any case within its jurisdiction, the court shall have
the power to remand appropriate matters to any administrative or executive body or official with such direction
as it may deem proper and just. The Court of Federal

 3a
Claims shall have jurisdiction to render judgment upon
any claim by or against, or dispute with, a contractor
arising under section 7104(b)(1) of title 41, including a
dispute concerning termination of a contract, rights in
tangible or intangible property, compliance with cost accounting standards, and other nonmonetary disputes on
which a decision of the contracting officer has been issued under section 6 1 of that Act.
(b)(1) Both the Unites 2 States Court of Federal
Claims and the district courts of the United States shall
have jurisdiction to render judgment on an action by an
interested party objecting to a solicitation by a Federal
agency for bids or proposals for a proposed contract or
to a proposed award or the award of a contract or any
alleged violation of statute or regulation in connection
with a procurement or a proposed procurement. Both
the United States Court of Federal Claims and the district courts of the United States shall have jurisdiction
to entertain such an action without regard to whether
suit is instituted before or after the contract is awarded.
(2) To afford relief in such an action, the courts may
award any relief that the court considers proper, including declaratory and injunctive relief except that any
monetary relief shall be limited to bid preparation and
proposal costs.
(3) In exercising jurisdiction under this subsection,
the courts shall give due regard to the interests of national defense and national security and the need for expeditious resolution of the action.

1
2

See References in Text note below.
So in original. Probably should be “United”.

 4a
(4) In any action under this subsection, the courts
shall review the agency’s decision pursuant to the standards set forth in section 706 of title 5.
(5) If an interested party who is a member of the
private sector commences an action described in paragraph (1) with respect to a public-private competition
conducted under Office of Management and Budget Circular A-76 regarding the performance of an activity or
function of a Federal agency, or a decision to convert a
function performed by Federal employees to private
sector performance without a competition under Office
of Management and Budget Circular A-76, then an interested party described in section 3551(2)(B) of title 31
shall be entitled to intervene in that action.
(6) Jurisdiction over any action described in paragraph (1) arising out of a maritime contract, or a solicitation for a proposed maritime contract, shall be governed by this section and shall not be subject to the jurisdiction of the district courts of the United States under the Suits in Admiralty Act (chapter 309 of title 46)
or the Public Vessels Act (chapter 311 of title 46).
(c) Nothing herein shall be construed to give the
United States Court of Federal Claims jurisdiction of
any civil action within the exclusive jurisdiction of the
Court of International Trade, or of any action against,
or founded on conduct of, the Tennessee Valley Authority, or to amend or modify the provisions of the Tennessee Valley Authority Act of 1933 with respect to actions
by or against the Authority.

 5a
4.

31 U.S.C. 701 provides:

Definitions

In this chapter—
(1) “agency” includes the District of Columbia
government but does not include the legislative branch
or the Supreme Court.
(2) “appropriations” means appropriated amounts
and includes, in appropriate context—
(A) funds;
(B) authority to make obligations by contract
before appropriations; and
(C) other authority making amounts available
for obligation or expenditure.
5.

31 U.S.C. 1301(a) provides:

Application

(a) Appropriations shall be applied only to the objects for which the appropriations were made except as
otherwise provided by law.
6.

31 U.S.C. 1304 provides:

Judgments, awards, and compromise settlements

(a) Necessary amounts are appropriated to pay final judgments, awards, compromise settlements, and interest and costs specified in the judgments or otherwise
authorized by law when—
(1)

payment is not otherwise provided for;

 6a
(2) payment is certified by the Secretary of the
Treasury; and
(3)
ble—

the judgment, award, or settlement is paya-

(A) under section 2414, 2517, 2672, or 2677 of
title 28;
(B) under section 3723 of this title;
(C) under a decision of a board of contract appeals; or
(D) in excess of an amount payable from the
appropriations of an agency for a meritorious
claim under section 2733 or 2734 of title 10, section
715 of title 32, or section 20113 of title 51.
(b)(1) Interest may be paid from the appropriation
made by this section—
(A) on a judgment of a district court, only when
the judgment becomes final after review on appeal or
petition by the United States Government, and then
only from the date of filing of the transcript of the
judgment with the Secretary of the Treasury through
the day before the date of the mandate of affirmance;
or
(B) on a judgment of the Court of Appeals for the
Federal Circuit or the United States Court of Federal Claims under section 2516(b) of title 28, only
from the date of filing of the transcript of the judgment with the Secretary of the Treasury through the
day before the date of the mandate of affirmance.

 7a
(2) Interest payable under this subsection in a proceeding reviewed by the Supreme Court is not allowed
after the end of the term in which the judgment is affirmed.
(c)(1)    A judgment or compromise settlement against
the Government shall be paid under this section and sections 2414, 2517, and 25181 of title 28 when the judgment
or settlement arises out of an express or implied contract made by—
(A) the Army and Air Force Exchange Service;
(B) the Navy Exchanges;
(C) the Marine Corps Exchanges;
(D) the Coast Guard Exchanges; or
(E) the Exchange Councils of the National Aeronautics and Space Administration.
(2) The Exchange making the contract shall reimburse the Government for the amount paid by the Government.
(d) Beginning not later than the date that is 60 days
after the date of enactment of the John D. Dingell, Jr.
Conservation, Management, and Recreation Act, and
unless the disclosure of such information is otherwise
prohibited by law or a court order, the Secretary of the
Treasury shall make available to the public on a website,
as soon as practicable, but not later than 30 days after
the date on which a payment under this section is tendered, the following information with regard to that payment:

1

See References in Text note below.

 8a
(1) The name of the specific agency or entity
whose actions gave rise to the claim or judgment.
(2)
(3)
ant.

The name of the plaintiff or claimant.
The name of counsel for the plaintiff or claim-

(4) The amount paid representing principal liability, and any amounts paid representing any ancillary liability, including attorney fees, costs, and interest.
(5) A brief description of the facts that gave rise
to the claim.
(6) The name of the agency that submitted the
claim.
7.

31 U.S.C. 1341 provides:

Limitations on expending and obligating amounts

(a)(1) Except as specified in this subchapter or any
other provision of law, an officer or employee of the
United States Government or of the District of Columbia government may not—
(A) make or authorize an expenditure or obligation exceeding an amount available in an appropriation or fund for the expenditure or obligation;
(B) involve either government in a contract or
obligation for the payment of money before an appropriation is made unless authorized by law;

 9a
(C) make or authorize an expenditure or obligation of funds required to be sequestered under section 252 of the Balanced Budget and Emergency Deficit Control Act of 1985; or
(D) involve either government in a contract or
obligation for the payment of money required to be
sequestered under section 252 of the Balanced
Budget and Emergency Deficit Control Act of 1985.
(2) This subsection does not apply to a corporation
getting amounts to make loans (except paid in capital
amounts) without legal liability of the United States
Government.
(b) An article to be used by an executive department
in the District of Columbia that could be bought out of
an appropriation made to a regular contingent fund of
the department may not be bought out of another
amount available for obligation.
(c)(1)

In this subsection—

(A) the term “covered lapse in appropriations”
means any lapse in appropriations that begins on or
after December 22, 2018;
(B) the term “District of Columbia public employer” means—
(i)

the District of Columbia Courts;

(ii) the Public Defender Service for the District of Columbia; or
(iii) the District of Columbia government;
(C) the term “employee” includes an officer; and

 10a
(D) the term “excepted employee” means an excepted employee or an employee performing emergency work, as such terms are defined by the Office
of Personnel Management or the appropriate District of Columbia public employer, as applicable.
(2) Each employee of the United States Government or of a District of Columbia public employer furloughed as a result of a covered lapse in appropriations
shall be paid for the period of the lapse in appropriations, and each excepted employee who is required to
perform work during a covered lapse in appropriations
shall be paid for such work, at the employee’s standard
rate of pay, at the earliest date possible after the lapse
in appropriations ends, regardless of scheduled pay
dates, and subject to the enactment of appropriations
Acts ending the lapse.
(3) During a covered lapse in appropriations, each
excepted employee who is required to perform work
shall be entitled to use leave under chapter 63 of title 5,
or any other applicable law governing the use of leave
by the excepted employee, for which compensation shall
be paid at the earliest date possible after the lapse in
appropriations ends, regardless of scheduled pay dates.
8.

31 U.S.C. 1350 provides:

Criminal penalty

An officer or employee of the United States Government or of the District of Columbia government knowingly and willfully violating section 1341(a) or 1342 of
this title shall be fined not more than $5,000, imprisoned
for not more than 2 years, or both.

 11a
9.

42 U.S.C. 280k-2 provides:

Authorization of appropriations

There is authorized to be appropriated to carry out
this part, such sums as may be necessary.
10. 42 U.S.C. 300gg-93(e) provides:
Health insurance consumer information
(e)

Funding
(1) Initial funding

There is hereby appropriated to the Secretary,
out of any funds in the Treasury not otherwise appropriated, $30,000,000 for the first fiscal year for which
this section applies to carry out this section. Such
amount shall remain available without fiscal year limitation.
(2) Authorization for subsequent years

There is authorized to be appropriated to the Secretary for each fiscal year following the fiscal year
described in paragraph (1), such sums as may be necessary to carry out this section.
11. 42 U.S.C. 1395w-115 provides:
Subsidies for part D eligible individuals for qualified prescription drug coverage
(a)

Subsidy payment

In order to reduce premium levels applicable to qualified prescription drug coverage for part D eligible individuals consistent with an overall subsidy level of 74.5

 12a
percent for basic prescription drug coverage, to reduce
adverse selection among prescription drug plans and
MA-PD plans, and to promote the participation of PDP
sponsors under this part and MA organizations under
part C of this subchapter, the Secretary shall provide
for payment to a PDP sponsor that offers a prescription
drug plan and an MA organization that offers an MAPD plan of the following subsidies in accordance with
this section:
(1) Direct subsidy

A direct subsidy for each part D eligible individual
enrolled in a prescription drug plan or MA-PD plan
for a month equal to—
(A) the amount of the plan’s standardized bid
amount (as defined in section 1395w-113(a)(5) of
this title), adjusted under subsection (c)(1) of this
section, reduced by
(B) the base beneficiary premium (as computed under paragraph (2) of section 1395w-113(a)
of this title and as adjusted under paragraph
(1)(B) of such section).
(2) Subsidy through reinsurance

The reinsurance payment amount (as defined in
subsection (b) of this section).
This section constitutes budget authority in advance of
appropriations Acts and represents the obligation of the
Secretary to provide for the payment of amounts provided under this section.

 13a
(b)

Reinsurance payment amount
(1) In general

The reinsurance payment amount under this subsection for a part D eligible individual enrolled in a
prescription drug plan or MA-PD plan for a coverage
year is an amount equal to 80 percent of the allowable
reinsurance costs (as specified in paragraph (2)) attributable to that portion of gross covered prescription drug costs as specified in paragraph (3) incurred
in the coverage year after such individual has incurred costs that exceed the annual out-of-pocket
threshold specified in section 1395w-102(b)(4)(B) of
this title.
(2) Allowable reinsurance costs

For purposes of this section, the term “allowable
reinsurance costs” means, with respect to gross covered prescription drug costs under a prescription
drug plan offered by a PDP sponsor or an MA-PD
plan offered by an MA organization, the part of such
costs that are actually paid (net of discounts, chargebacks, and average percentage rebates) by the sponsor or organization or by (or on behalf of) an enrollee
under the plan, but in no case more than the part of
such costs that would have been paid under the plan
if the prescription drug coverage under the plan were
basic prescription drug coverage, or, in the case of a
plan providing supplemental prescription drug coverage, if such coverage were standard prescription
drug coverage.
(3) Gross covered prescription drug costs

For purposes of this section, the term “gross covered prescription drug costs” means, with respect to

 14a
a part D eligible individual enrolled in a prescription
drug plan or MA-PD plan during a coverage year, the
costs incurred under the plan, not including administrative costs, but including costs directly related to
the dispensing of covered part D drugs during the
year and costs relating to the deductible. Such costs
shall be determined whether they are paid by the individual or under the plan, regardless of whether the
coverage under the plan exceeds basic prescription
drug coverage.
(4) Coverage year defined

For purposes of this section, the term “coverage
year” means a calendar year in which covered part D
drugs are dispensed if the claim for such drugs (and
payment on such claim) is made not later than such
period after the end of such year as the Secretary
specifies.
(c) Adjustments relating to bids
(1) Health status risk adjustment
(A) Establishment of risk adjustors

The Secretary shall establish an appropriate
methodology for adjusting the standardized bid
amount under subsection (a)(1)(A) of this section
to take into account variation in costs for basic
prescription drug coverage among prescription
drug plans and MA-PD plans based on the differences in actuarial risk of different enrollees being
served. Any such risk adjustment shall be designed in a manner so as not to result in a change
in the aggregate amounts payable to such plans
under subsection (a)(1) of this section and through

 15a
that portion of the monthly beneficiary prescription drug premiums described in subsection
(a)(1)(B) of this section and MA monthly prescription drug beneficiary premiums.
(B) Considerations

In establishing the methodology under subparagraph (A), the Secretary may take into account
the similar methodologies used under section
1395w-23(a)(3) of this title to adjust payments to
MA organizations for benefits under the original
medicare fee-for-service program option.
(C) Data collection

In order to carry out this paragraph, the Secretary shall require—
(i) PDP sponsors to submit data regarding
drug claims that can be linked at the individual
level to part A and part B data and such other
information as the Secretary determines necessary; and
(ii) MA organizations that offer MA-PD
plans to submit data regarding drug claims that
can be linked at the individual level to other
data that such organizations are required to
submit to the Secretary and such other information as the Secretary determines necessary.
(D)

Publication

At the time of publication of risk adjustment
factors under section 1395w-23(b)(1)(B)(i)(II) of
this title, the Secretary shall publish the risk adjusters established under this paragraph for the
succeeding year.

 16a
(2) Geographic adjustment
(A) In general

Subject to subparagraph (B), for purposes of
section 1395w-113(a)(1)(B)(iii) of this title, the
Secretary shall establish an appropriate methodology for adjusting the national average monthly
bid amount (computed under section 1395w113(a)(4) of this title) to take into account differences in prices for covered part D drugs among
PDP regions.
(B) De minimis rule

If the Secretary determines that the price variations described in subparagraph (A) among PDP
regions are de minimis, the Secretary shall not
provide for adjustment under this paragraph.
(C) Budget neutral adjustment

Any adjustment under this paragraph shall be
applied in a manner so as to not result in a change
in the aggregate payments made under this part
that would have been made if the Secretary had
not applied such adjustment.
(d) Payment methods
(1) In general

Payments under this section shall be based on
such a method as the Secretary determines. The Secretary may establish a payment method by which interim payments of amounts under this section are
made during a year based on the Secretary’s best estimate of amounts that will be payable after obtaining
all of the information.

 17a
(2) Requirement for provision of information
(A) Requirement

Payments under this section to a PDP sponsor
or MA organization are conditioned upon the furnishing to the Secretary, in a form and manner
specified by the Secretary, of such information as
may be required to carry out this section.
(B) Restriction on use of information

Information disclosed or obtained pursuant to
subparagraph (A) may be used by officers, employees, and contractors of the Department of
Health and Human Services only for the purposes
of, and to the extent necessary in, carrying out this
section.
(3) Source of payments

Payments under this section shall be made from
the Medicare Prescription Drug Account.
(4) Application of enrollee adjustment

The provisions of section 1395w-23(a)(2) of this title shall apply to payments to PDP sponsors under
this section in the same manner as they apply to payments to MA organizations under section 1395w23(a) of this title.

 18a
(e) Portion of total payments to a sponsor or organization subject to risk (application of risk corridors)
(1) Computation of adjusted allowable risk corridor
costs
(A) In general

For purposes of this subsection, the term “adjusted allowable risk corridor costs” means, for a
plan for a coverage year (as defined in subsection
(b)(4) of this section)—
(i) the allowable risk corridor costs (as defined in subparagraph (B)) for the plan for the
year, reduced by
(ii) the sum of (I) the total reinsurance payments made under subsection (b) of this section
to the sponsor of the plan for the year, and (II)
the total subsidy payments made under section
1395w-114 of this title to the sponsor of the plan
for the year.
(B) Allowable risk corridor costs

For purposes of this subsection, the term “allowable risk corridor costs” means, with respect to
a prescription drug plan offered by a PDP sponsor
or an MA-PD plan offered by an MA organization,
the part of costs (not including administrative
costs, but including costs directly related to the
dispensing of covered part D drugs during the
year) incurred by the sponsor or organization under the plan that are actually paid (net of discounts, chargebacks, and average percentage rebates) by the sponsor or organization under the
plan, but in no case more than the part of such

 19a
costs that would have been paid under the plan if
the prescription drug coverage under the plan
were basic prescription drug coverage, or, in the
case of a plan providing supplemental prescription
drug coverage, if such coverage were basic prescription drug coverage taking into account the
adjustment under section 1395w-111(c)(2) of this
title. In computing allowable costs under this
paragraph, the Secretary shall compute such costs
based upon imposition under paragraphs (1)(D)
and (2)(E) of section 1395w-114(a) of this title of
the maximum amount of copayments permitted
under such paragraphs.
(2) Adjustment of payment
(A) No adjustment if adjusted allowable risk
corridor costs within risk corridor

If the adjusted allowable risk corridor costs (as
defined in paragraph (1)) for the plan for the year
are at least equal to the first threshold lower limit
of the risk corridor (specified in paragraph
(3)(A)(i)), but not greater than the first threshold
upper limit of the risk corridor (specified in paragraph (3)(A)(iii)) for the plan for the year, then no
payment adjustment shall be made under this subsection.
(B) Increase in payment if adjusted allowable risk
corridor costs above upper limit of risk corridor
(i)

Costs between first and second threshold
upper limits

If the adjusted allowable risk corridor costs
for the plan for the year are greater than the

 20a
first threshold upper limit, but not greater
than the second threshold upper limit, of the
risk corridor for the plan for the year, the Secretary shall increase the total of the payments
made to the sponsor or organization offering
the plan for the year under this section by an
amount equal to 50 percent (or, for 2006 and
2007, 75 percent or 90 percent if the conditions
described in clause (iii) are met for the year) of
the difference between such adjusted allowable risk corridor costs and the first threshold
upper limit of the risk corridor.
(ii) Costs above second threshold upper limits

If the adjusted allowable risk corridor costs
for the plan for the year are greater than the
second threshold upper limit of the risk corridor for the plan for the year, the Secretary
shall increase the total of the payments made
to the sponsor or organization offering the plan
for the year under this section by an amount
equal to the sum of—
(I) 50 percent (or, for 2006 and 2007,
75 percent or 90 percent if the conditions described in clause (iii) are met for the year) of
the difference between the second threshold
upper limit and the first threshold upper
limit; and
(II) 80 percent of the difference between such adjusted allowable risk corridor
costs and the second threshold upper limit
of the risk corridor.

 21a
(iii) Conditions for application of higher percentage for 2006 and 2007

The conditions described in this clause are
met for 2006 or 2007 if the Secretary determines with respect to such year that—
(I) at least 60 percent of prescription
drug plans and MA-PD plans to which this
subsection applies have adjusted allowable
risk corridor costs for the plan for the year
that are more than the first threshold upper
limit of the risk corridor for the plan for the
year; and
(II) such plans represent at least 60 percent of part D eligible individuals enrolled in
any prescription drug plan or MA-PD plan.
(C) Reduction in payment if adjusted allowable
risk corridor costs below lower limit of risk
corridor
(i) Costs between first and second threshold
lower limits

If the adjusted allowable risk corridor costs
for the plan for the year are less than the first
threshold lower limit, but not less than the second threshold lower limit, of the risk corridor
for the plan for the year, the Secretary shall
reduce the total of the payments made to the
sponsor or organization offering the plan for
the year under this section by an amount (or
otherwise recover from the sponsor or organization an amount) equal to 50 percent (or, for
2006 and 2007, 75 percent) of the difference between the first threshold lower limit of the risk

 22a
corridor and such adjusted allowable risk corridor costs.
(ii) Costs below second threshold lower limit

If the adjusted allowable risk corridor costs
for the plan for the year are less the second
threshold lower limit of the risk corridor for
the plan for the year, the Secretary shall reduce the total of the payments made to the
sponsor or organization offering the plan for
the year under this section by an amount (or
otherwise recover from the sponsor or organization an amount) equal to the sum of—
(I) 50 percent (or, for 2006 and 2007,
75 percent) of the difference between the
first threshold lower limit and the second
threshold lower limit; and
(II) 80 percent of the difference between the second threshold upper limit of
the risk corridor and such adjusted allowable risk corridor costs.
(3) Establishment of risk corridors
(A) In general

For each plan year the Secretary shall establish a risk corridor for each prescription drug plan
and each MA-PD plan. The risk corridor for a
plan for a year shall be equal to a range as follows:
(i)

First threshold lower limit

The first threshold lower limit of such corridor shall be equal to—

 23a
(I) the target amount described in subparagraph (B) for the plan; minus
(II) an amount equal to the first threshold risk percentage for the plan (as determined under subparagraph (C)(i)) of such
target amount.
(ii) Second threshold lower limit

The second threshold lower limit of such
corridor shall be equal to—
(I) the target amount described in subparagraph (B) for the plan; minus
(II) an amount equal to the second
threshold risk percentage for the plan (as
determined under subparagraph (C)(ii)) of
such target amount.
(iii) First threshold upper limit

The first threshold upper limit of such corridor shall be equal to the sum of—
(I)

such target amount; and

(II) the amount described in clause
(i)(II).
(iv) Second threshold upper limit

The second threshold upper limit of such
corridor shall be equal to the sum of—
(I)

such target amount; and

(II) the amount described in clause
(ii)(II).

 24a
(B) Target amount described

The target amount described in this paragraph
is, with respect to a prescription drug plan or an
MA-PD plan in a year, the total amount of payments paid to the PDP sponsor or MA-PD organization for the plan for the year, taking into account amounts paid by the Secretary and enrollees, based upon the standardized bid amount (as
defined in section 1395w-113(a)(5) of this title and
as risk adjusted under subsection (c)(1) of this section), reduced by the total amount of administrative expenses for the year assumed in such standardized bid.
(C) First and second threshold risk percentage
defined
(i)

First threshold risk percentage

Subject to clause (iii), for purposes of this
section, the first threshold risk percentage is—
(I)

for 2006 and 2007, and1 2.5 percent;

(II) for 2008 through 2011, 5 percent;
and
(III) for 2012 and subsequent years, a
percentage established by the Secretary,
but in no case less than 5 percent.
(ii) Second threshold risk percentage

Subject to clause (iii), for purposes of this
section, the second threshold risk percentage
is—
1

So in original.

The word “and” probably should not appear.

 25a
(I)

for 2006 and 2007, 5 percent;

(II) for 2008 through 2011, 10 percent;
and
(III) for 2012 and subsequent years, a
percentage established by the Secretary
that is greater than the percent established
for the year under clause (i)(III), but in no
case less than 10 percent.
(iii) Reduction of risk percentage to ensure
2 plans in an area

Pursuant to section 1395w-111(b)(2)(E)(ii)
of this title, a PDP sponsor may submit a bid
that requests a decrease in the applicable first
or second threshold risk percentages or an increase in the percents applied under paragraph (2).
(4) Plans at risk for entire amount of supplemental
prescription drug coverage

A PDP sponsor and MA organization that offers a
plan that provides supplemental prescription drug
benefits shall be at full financial risk for the provision
of such supplemental benefits.
(5) No effect on monthly premium

No adjustment in payments made by reason of
this subsection shall affect the monthly beneficiary
premium or the MA monthly prescription drug beneficiary premium.

 26a
(f ) Disclosure of information
(1) In general

Each contract under this part and under part C of
this subchapter shall provide that—
(A) the PDP sponsor offering a prescription
drug plan or an MA organization offering an MAPD plan shall provide the Secretary with such information as the Secretary determines is necessary to carry out this section; and
(B) the Secretary shall have the right in accordance with section 1395w-27(d)(2)(B) of this title (as applied under section 1395w-112(b)(3)(C) of
this title) to inspect and audit any books and records of a PDP sponsor or MA organization that
pertain to the information regarding costs provided to the Secretary under subparagraph (A).
(2) Restriction on use of information

Information disclosed or obtained pursuant to the
provisions of this section may be used—
(A) by officers, employees, and contractors
of the Department of Health and Human Services
for the purposes of, and to the extent necessary
in—
(i)

carrying out this section; and

(ii) conducting oversight, evaluation, and
enforcement under this subchapter; and
(B) by the Attorney General and the Comptroller General of the United States for the purposes of, and to the extent necessary in, carrying
out health oversight activities.

 27a
(g) Payment for fallback prescription drug plans

In lieu of the amounts otherwise payable under this
section to a PDP sponsor offering a fallback prescription
drug plan (as defined in section 1395w-111(g)(4) of this
title2), the amount payable shall be the amounts determined under the contract for such plan pursuant to section 1395w-111(g)(5) of this title.
12. 42 U.S.C. 18001(g)(1) provides:
Immediate access to insurance for uninsured individuals
with a preexisting condition
(g) Funding; termination of authority
(1) In general

There is appropriated to the Secretary, out of any
moneys in the Treasury not otherwise appropriated,
$5,000,000,000 to pay claims against (and the administrative costs of ) the high risk pool under this section
that are in excess of the amount of premiums collected from eligible individuals enrolled in the high
risk pool. Such funds shall be available without fiscal year limitation.

2

See References in Text note below.

 28a
13. 42 U.S.C. 18031(a)(1) provides:
Affordable choices of health benefit plans
(a) Assistance to States to establish American Health
Benefit Exchanges
(1) Planning and establishment grants

There shall be appropriated to the Secretary, out
of any moneys in the Treasury not otherwise appropriated, an amount necessary to enable the Secretary
to make awards, not later than 1 year after March 23,
2010, to States in the amount specified in paragraph
(2) for the uses described in paragraph (3).
14. 42 U.S.C. 18042(g) provides:
Federal program to assist establishment and operation of
nonprofit, member-run health insurance issuers
(g) Appropriations

There are hereby appropriated, out of any funds in
the Treasury not otherwise appropriated, $6,000,000,000
to carry out this section.
15. 42 U.S.C. 18043(c) provides:
Funding for the territories
(c) Appropriation and allocation
(1) Appropriation

Out of any funds in the Treasury not otherwise appropriated, there is appropriated for purposes of
payment pursuant to subsection (a) $1,000,000,000, to

 29a
be available during the period beginning with 2014
and ending with 2019.
(2) Allocation

The Secretary shall allocate the amount appropriated under paragraph (1) among the territories for
purposes of carrying out this section as follows:
(A)

For Puerto Rico, $925,000,000.

(B) For another territory, the portion of
$75,000,000 specified by the Secretary.
16. 42 U.S.C. 18061 provides:
Transitional reinsurance program for individual market
in each State
(a) In general

Each State shall, not later than January 1, 2014—
(1) include in the Federal standards or State law
or regulation the State adopts and has in effect under
section 18041(b) of this title the provisions described
in subsection (b); and
(2) establish (or enter into a contract with) 1 or
more applicable reinsurance entities to carry out the
reinsurance program under this section.
(b) Model regulation
(1) In general

In establishing the Federal standards under section 18041(a) of this title, the Secretary, in consultation with the National Association of Insurance Commissioners (the “NAIC”), shall include provisions

 30a
that enable States to establish and maintain a program under which—
(A) health insurance issuers, and third party administrators on behalf of group health plans, are required to make payments to an applicable reinsurance entity for any plan year beginning in the 3-year
period beginning January 1, 2014 (as specified in paragraph (3); 1 and
(B) the applicable reinsurance entity collects
payments under subparagraph (A) and uses amounts
so collected to make reinsurance payments to health
insurance issuers described in subparagraph (A) that
cover high risk individuals in the individual market
(excluding grandfathered health plans) for any plan
year beginning in such 3-year period.
(2) High-risk individual; payment amounts

The Secretary shall include the following in the
provisions under paragraph (1):
(A)

Determination of high-risk individuals

The method by which individuals will be identified as high risk individuals for purposes of the reinsurance program established under this section.
Such method shall provide for identification of individuals as high-risk individuals on the basis of—
(i) a list of at least 50 but not more than 100
medical conditions that are identified as highrisk conditions and that may be based on the identification of diagnostic and procedure codes that
So in original. A second closing parenthesis probably should
precede the semicolon.
1

 31a
are indicative of individuals with pre-existing,
high-risk conditions; or
(ii) any other comparable objective method
of identification recommended by the American
Academy of Actuaries.
(B)

Payment amount

The formula for determining the amount of
payments that will be paid to health insurance issuers described in paragraph (1)(B) that insure
high-risk individuals. Such formula shall provide
for the equitable allocation of available funds
through reconciliation and may be designed—
(i) to provide a schedule of payments that
specifies the amount that will be paid for each
of the conditions identified under subparagraph
(A); or
(ii) to use any other comparable method for
determining payment amounts that is recommended by the American Academy of Actuaries
and that encourages the use of care coordination and care management programs for high
risk conditions.
(3) Determination of required contributions
(A)

In general

The Secretary shall include in the provisions
under paragraph (1) the method for determining
the amount each health insurance issuer and group
health plan described in paragraph (1)(A) contributing to the reinsurance program under this section is required to contribute under such paragraph for each plan year beginning in the 36-

 32a
month period beginning January 1, 2014. The
contribution amount for any plan year may be
based on the percentage of revenue of each issuer
and the total costs of providing benefits to enrollees in self-insured plans or on a specified amount
per enrollee and may be required to be paid in advance or periodically throughout the plan year.
(B)

Specific requirements

The method under this paragraph shall be designed so that—
(i) the contribution amount for each issuer
proportionally reflects each issuer’s fully insured commercial book of business for all major
medical products and the total value of all fees
charged by the issuer and the costs of coverage
administered by the issuer as a third party administrator;
(ii) the contribution amount can include an
additional amount to fund the administrative
expenses of the applicable reinsurance entity;
(iii) the aggregate contribution amounts for
all States shall, based on the best estimates of
the NAIC and without regard to amounts described in clause (ii), equal $10,000,000,000 for
plan years beginning in 2014, $6,000,000,000 for
plan years beginning 2 2015, and $4,000,000,000
for plan years beginning in 2016; and
(iv) in addition to the aggregate contribution amounts under clause (iii), each issuer’s

2

So in original.

Probably should be followed by “in”.

 33a
contribution amount for any calendar year under clause (iii) reflects its proportionate share
of an additional $2,000,000,000 for 2014, an additional $2,000,000,000 for 2015, and an additional $1,000,000,000 for 2016.
Nothing in this subparagraph shall be construed to
preclude a State from collecting additional amounts
from issuers on a voluntary basis.
(4) Expenditure of funds

The provisions under paragraph (1) shall provide
that—
(A) the contribution amounts collected for any
calendar year may be allocated and used in any of
the three calendar years for which amounts are
collected based on the reinsurance needs of a particular period or to reflect experience in a prior
period; and
(B) amounts remaining unexpended as of December, 2016, may be used to make payments under any reinsurance program of a State in the individual market in effect in the 2-year period beginning on January 1, 2017.
Notwithstanding the preceding sentence, any contribution amounts described in paragraph (3)(B)(iv) shall be
deposited into the general fund of the Treasury of the
United States and may not be used for the program established under this section.

 34a
(c) Applicable reinsurance entity

For purposes of this section—
(1) In general

The term “applicable reinsurance entity” means a
not-for-profit organization—
(A) the purpose of which is to help stabilize
premiums for coverage in the individual market in
a State during the first 3 years of operation of an
Exchange for such markets within the State when
the risk of adverse selection related to new rating
rules and market changes is greatest; and
(B) the duties of which shall be to carry out
the reinsurance program under this section by coordinating the funding and operation of the riskspreading mechanisms designed to implement the
reinsurance program.
(2) State discretion

A State may have more than 1 applicable reinsurance entity to carry out the reinsurance program under this section within the State and 2 or more States
may enter into agreements to provide for an applicable reinsurance entity to carry out such program in
all such States.
(3) Entities are tax-exempt

An applicable reinsurance entity established under this section shall be exempt from taxation under
chapter 1 of title 26. The preceding sentence shall
not apply to the tax imposed by section 511 such 3
3

So in original.

Probably should be preceded by “of ”.

 35a
title (relating to tax on unrelated business taxable income of an exempt organization).
(d) Coordination with State high-risk pools

The State shall eliminate or modify any State highrisk pool to the extent necessary to carry out the reinsurance program established under this section. The
State may coordinate the State high-risk pool with such
program to the extent not inconsistent with the provisions of this section.
17. 42 U.S.C. 18062 provides:
Establishment of risk corridors for plans in individual
and small group markets
(a) In general

The Secretary shall establish and administer a program of risk corridors for calendar years 2014, 2015, and
2016 under which a qualified health plan offered in the
individual or small group market shall participate in a
payment adjustment system based on the ratio of the allowable costs of the plan to the plan’s aggregate premiums. Such program shall be based on the program for
regional participating provider organizations under part
D of title XVIII of the Social Security Act [42 U.S.C.
1395w-101 et seq.].

 36a
(b) Payment methodology
(1) Payments out

The Secretary shall provide under the program
established under subsection (a) that if—
(A) a participating plan’s allowable costs for
any plan year are more than 103 percent but not
more than 108 percent of the target amount, the
Secretary shall pay to the plan an amount equal to
50 percent of the target amount in excess of 103
percent of the target amount; and
(B) a participating plan’s allowable costs for
any plan year are more than 108 percent of the
target amount, the Secretary shall pay to the plan
an amount equal to the sum of 2.5 percent of the
target amount plus 80 percent of allowable costs
in excess of 108 percent of the target amount.
(2) Payments in

The Secretary shall provide under the program established under subsection (a) that if—
(A) a participating plan’s allowable costs for any
plan year are less than 97 percent but not less than
92 percent of the target amount, the plan shall pay to
the Secretary an amount equal to 50 percent of the
excess of 97 percent of the target amount over the
allowable costs; and
(B) a participating plan’s allowable costs for any
plan year are less than 92 percent of the target
amount, the plan shall pay to the Secretary an
amount equal to the sum of 2.5 percent of the target
amount plus 80 percent of the excess of 92 percent of
the target amount over the allowable costs.

 37a
(c) Definitions

In this section:
(1) Allowable costs
(A)

In general

The amount of allowable costs of a plan for any
year is an amount equal to the total costs (other
than administrative costs) of the plan in providing
benefits covered by the plan.
(B)

Reduction for risk adjustment and reinsurance payments

Allowable costs shall 1   reduced by any risk adjustment and reinsurance payments received under section 2   18061 and 18063 of this title.
(2) Target amount

The target amount of a plan for any year is an
amount equal to the total premiums (including any
premium subsidies under any governmental program),
reduced by the administrative costs of the plan.
18. 42 U.S.C. 18063 provides:
Risk adjustment
(a) In general
(1) Low actuarial risk plans

Using the criteria and methods developed under
subsection (b), each State shall assess a charge on
1
2

So in original.
So in original.

Probably should be followed by “be”.
Probably should be “sections”.

 38a
health plans and health insurance issuers (with respect to health insurance coverage) described in subsection (c) if the actuarial risk of the enrollees of such
plans or coverage for a year is less than the average
actuarial risk of all enrollees in all plans or coverage
in such State for such year that are not self-insured
group health plans (which are subject to the provisions of the Employee Retirement Income Security
Act of 1974 [29 U.S.C. 1001 et seq.]).
(2) High actuarial risk plans

Using the criteria and methods developed under
subsection (b), each State shall provide a payment to
health plans and health insurance issuers (with respect to health insurance coverage) described in subsection (c) if the actuarial risk of the enrollees of such
plans or coverage for a year is greater than the average actuarial risk of all enrollees in all plans and coverage in such State for such year that are not selfinsured group health plans (which are subject to the
provisions of the Employee Retirement Income Security Act of 1974).
(b) Criteria and methods

The Secretary, in consultation with States, shall establish criteria and methods to be used in carrying out
the risk adjustment activities under this section. The
Secretary may utilize criteria and methods similar to the
criteria and methods utilized under part C or D of title
XVIII of the Social Security Act [42 U.S.C. 1395w-21
et seq., 1395w-101 et seq.]. Such criteria and methods
shall be included in the standards and requirements the
Secretary prescribes under section 18041 of this title.

 39a
(c) Scope

A health plan or a health insurance issuer is described in this subsection if such health plan or health
insurance issuer provides coverage in the individual or
small group market within the State. This subsection
shall not apply to a grandfathered health plan or the issuer of a grandfathered health plan with respect to that
plan.
19. Patient Protection and Affordable Care Act, Pub. L.
No. 111-148, Tit. I, Subtit. E, Pt. I, Subpt. A, § 1401,
124 Stat. 213 provides in pertinent part:
SEC. 1401. REFUNDABLE TAX CREDIT PROVIDING
PREMIUM ASSISTANCE FOR COVERAGE
UNDER A QUALIFIED HEALTH PLAN.

* * * * *
(d) CONFORMING AMENDMENTS.—
(1) Paragraph (2) of section 1324(b) of title 31,
United States Code, is amended by inserting “36B,”
after “36A,”.
(2) The table of sections for subpart C of part IV
of subchapter A of chapter 1 of the Internal Revenue
Code of 1986 is amended by inserting after the item
relating to section 36A the following new item:
“Sec. 36B. Refundable credit for coverage under a
qualified health plan.”.
* * * * *

 40a
20. Patient Protection and Affordable Care Act, Pub. L.
No. 111-148, Tit. II, Subtit. I, § 2707(e)(1), 124 Stat. 327
(42 U.S.C. 1396a note) provides in pertinent part:
SEC. 2707. MEDICAID EMERGENCY PSYCHIATRIC
DEMONSTRATION PROJECT.

(e) LIMITATIONS ON FEDERAL FUNDING.—
(1)

APPROPRIATION.—
* * * * *

(B) BUDGET AUTHORITY.—Subparagraph (A)
constitutes budget authority in advance of appropriations Act and represents the obligation of the
Federal Government to provide for the payment
of the amounts appropriated under that subparagraph.
21. Department of Health and Human Services Appropriations Act, 2014, Pub. L. No. 113-76, Div. H, Tit. II,
128 Stat. 374 provides in pertinent part:
*

*

*

*

*

CENTERS FOR MEDICARE AND MEDICAID SERVICES
*

*

*

*

*

PROGRAM MANAGEMENT

For carrying out, except as otherwise provided, titles
XI, XVIII, XIX, and XXI of the Social Security Act, titles XIII and XXVII of the PHS Act, the Clinical Laboratory Improvement Amendments of 1988, and other responsibilities of the Centers for Medicare and Medicaid
Services, not to exceed $3,669,744,000, to be transferred
from the Federal Hospital Insurance Trust Fund and

 41a
the Federal Supplementary Medical Insurance Trust
Fund, as authorized by section 201(g) of the Social Security Act; together with all funds collected in accordance with section 353 of the PHS Act and section
1857(e)(2) of the Social Security Act, funds retained by
the Secretary pursuant to section 302 of the Tax Relief
and Health Care Act of 2006; and such sums as may be
collected from authorized user fees and the sale of data,
which shall be credited to this account and remain available until September 30, 2019: Provided, That all funds
derived in accordance with 31 U.S.C. 9701 from organizations established under title XIII of the PHS Act shall
be credited to and available for carrying out the purposes of this appropriation: Provided further, That the
Secretary is directed to collect fees in fiscal year 2014
from Medicare Advantage organizations pursuant to
section 1857(e)(2) of the Social Security Act and from eligible organizations with risk-sharing contracts under
section 1876 of that Act pursuant to section 1876(k)(4)(D)
of that Act: Provided further, That $22,004,000 shall
be available for the State high-risk health insurance pool
program as authorized by the State High Risk Pool
Funding Extension Act of 2006.
*

*

*

*

*

 42a
22. Department of Health and Human Services Appropriations Act, 2015, Pub. L. No. 113-235, Div. G, Tit. II,
128 Stat. 2466 provides in pertinent part:
*

*

*

*

*

CENTERS FOR MEDICARE AND MEDICAID SERVICES
* * * * *
PROGRAM MANAGEMENT

For carrying out, except as otherwise provided, titles
XI, XVIII, XIX, and XXI of the Social Security Act, titles XIII and XXVII of the PHS Act, the Clinical Laboratory Improvement Amendments of 1988, and other responsibilities of the Centers for Medicare and Medicaid
Services, not to exceed $3,669,744,000, to be transferred
from the Federal Hospital Insurance Trust Fund and
the Federal Supplementary Medical Insurance Trust
Fund, as authorized by section 201(g) of the Social Security Act; together with all funds collected in accordance with section 353 of the PHS Act and section
1857(e)(2) of the Social Security Act, funds retained by
the Secretary pursuant to section 302 of the Tax Relief
and Health Care Act of 2006; and such sums as may be
collected from authorized user fees and the sale of data,
which shall be credited to this account and remain available until September 30, 2020: Provided, That all
funds derived in accordance with 31 U.S.C. 9701 from
organizations established under title XIII of the PHS
Act shall be credited to and available for carrying out
the purposes of this appropriation: Provided further,
That the Secretary is directed to collect fees in fiscal
year 2015 from Medicare Advantage organizations pursuant to section 1857(e)(2) of the Social Security Act and

 43a
from eligible organizations with risk-sharing contracts
under section 1876 of that Act pursuant to section
1876(k)(4)(D) of that Act.
*

*

*

*

*

OFFICE OF THE SECRETARY
*

*

*

*

*

PUBLIC HEALTH AND SOCIAL SERVICES EMERGENCY FUND

*

*

*

*

*

GENERAL PROVISIONS
*

*

*

*

*

SEC. 227. None of the funds made available by this
Act from the Federal Hospital Insurance Trust Fund or
the Federal Supplemental Medical Insurance Trust
Fund, or transferred from other accounts funded by this
Act to the “Centers for Medicare and Medicaid Services
—Program Management” account, may be used for payments under section 1342(b)(1) of Public Law 111-148
(relating to risk corridors).
*

*

*

*

*

 44a
23. Department of Health and Human Services Appropriations Act, 2016, Pub. L. No. 114-113, Div. H, Tit. II,
§ 225, 129 Stat. 2624 provides:
SEC. 225. None of the funds made available by this
Act from the Federal Hospital Insurance Trust Fund or
the Federal Supplemental Medical Insurance Trust
Fund, or transferred from other accounts funded by this
Act to the ‘‘Centers for Medicare and Medicaid Services—
Program Management’’ account, may be used for payments under section 1342(b)(1) of Public Law 111-148
(relating to risk corridors).
24. Continuing Appropriations Act, 2017, Pub. L. No.
114-223, Div. C, §§ 103-104, 130 Stat. 909 provides:
SEC. 103. Appropriations made by section 101 shall
be available to the extent and in the manner that would
be provided by the pertinent appropriations Act.
SEC. 104. Except as otherwise provided in section
102, no appropriation or funds made available or authority granted pursuant to section 101 shall be used to initiate or resume any project or activity for which appropriations, funds, or other authority were not available
during fiscal year 2016.
25. Further Continuing Appropriations Act, 2017,
Pub. L. No. 114-254, Div. A, § 101, 130 Stat. 1005 provides:
SEC. 101. The Continuing Appropriations Act,
2017 (division C of Public Law 114-223) is amended by—
(1) striking the date specified in section 106(3)
and inserting ‘‘April 28, 2017’’;

 45a
(2) striking ‘‘0.496 percent’’ in section 101(b) and
inserting ‘‘0.1901 percent’’; and
(3) inserting after section 145 the following new
sections:
26. Department of Health and Human Services Appropriations Act, 2017, Pub. L. No. 115-31, Div. H, Tit. II,
§ 223, 131 Stat. 543 provides:
SEC. 223. None of the funds made available by this
Act from the Federal Hospital Insurance Trust Fund or
the Federal Supplemental Medical Insurance Trust
Fund, or transferred from other accounts funded by this
Act to the ‘‘Centers for Medicare and Medicaid Services—
Program Management’’ account, may be used for payments under section 1342(b)(1) of Public Law 111-148
(relating to risk corridors).
27. 45 C.F.R. 153.500 provides:
Definitions

The following definitions apply to this subpart:
Adjustment percentage means, with respect to a
QHP:
(1) For benefit year 2014—
(i) For a QHP offered by a health insurance issuer
with allowable costs of at least 80 percent of after-tax
premium in a transitional State, the percentage specified by HHS for such QHPs in the transitional State;
and otherwise
(ii) Zero percent.

 46a
(2) For benefit year 2015, for a QHP offered by a
health insurance issuer in any State, 2 percent.
(3) For benefit year 2016—
(i) For a QHP offered by a health insurance issuer
with allowable costs of at least 80 percent of after-tax
premium, the percentage specified by HHS; and otherwise
(ii) Zero percent.
Administrative costs mean, with respect to a QHP,
total non-claims costs incurred by the QHP issuer for
the QHP, including taxes and regulatory fees.
After-tax premiums earned mean, with respect to a
QHP, premiums earned with respect to the QHP minus
taxes and regulatory fees.
Allowable administrative costs mean, with respect to
a QHP, the sum of administrative costs of the QHP,
other than taxes and regulatory fees, plus profits earned
by the QHP, which sum is limited to the sum of 20 percent and the adjustment percentage of after-tax premiums earned with respect to the QHP (including any premium tax credit under any governmental program), plus
taxes and regulatory fees.
Allowable costs means, with respect to a QHP, an
amount equal to the pro rata portion of the sum of incurred claims within the meaning of § 158.140 of this
subchapter (including adjustments for any direct and indirect remuneration), expenditures by the QHP issuer
for the QHP for activities that improve health care quality as set forth in § 158.150 of this subchapter, expenditures by the QHP issuer for the QHP related to health

 47a
information technology and meaningful use requirements as set forth in § 158.151 of this subchapter, and
the adjustments set forth in § 153.530(b); in each case
for all of the QHP issuer’s non-grandfathered health
plans in a market within a State, allocated to the QHP
based on premiums earned.
Charge means the flow of funds from QHP issuers to
HHS.
Direct and indirect remuneration means prescription drug rebates received by a QHP issuer within the
meaning of § 158.140(b)(1)(i) of this subchapter.
Payment means the flow of funds from HHS to QHP
issuers.
Premiums earned mean, with respect to a QHP, all
monies paid by or for enrollees with respect to that plan
as a condition of receiving coverage, including any fees
or other contributions paid by or for enrollees, within
the meaning of § 158.130 of this subchapter.
Profits mean, with respect to a QHP, the greater of:
(1) The sum of three percent and the adjustment
percentage of after-tax premiums earned; and
(2) Premiums earned of the QHP minus the sum of
allowable costs and administrative costs of the QHP.
Qualified health plan or QHP means, with respect to
the risk corridors program only—
(1) A qualified health plan, as defined at § 155.20 of
this subchapter;
(2) A health plan offered outside the Exchange by
an issuer that is the same plan as a qualified health plan,
as defined at § 155.20 of this subchapter, offered through

 48a
the Exchange by the issuer. To be the same plan as a
qualified health plan (as defined at § 155.20 of this subchapter) means that the health plan offered outside the
Exchange has identical benefits, premium, cost-sharing
structure, provider network, and service area as the
qualified health plan (as defined at § 155.20 of this subchapter); or
(3) A health plan offered outside the Exchange that
is substantially the same as a qualified health plan, as
defined at § 155.20 of this subchapter, offered through
the Exchange by the issuer. To be substantially the
same as a qualified health plan (as defined at § 155.20 of
this subchapter) means that the health plan meets the
criteria set forth in paragraph (2) of this definition with
respect to the qualified health plan, except that its benefits, premium, cost-sharing structure, and provider
network may differ from those of the qualified health
plan (as defined at § 155.20 of this subchapter) provided
that such differences are tied directly and exclusively to
Federal or State requirements or prohibitions on the
coverage of benefits that apply differently to plans depending on whether they are offered through or outside
an Exchange.
Risk corridors means any payment adjustment system based on the ratio of allowable costs of a plan to the
plan’s target amount.
Target amount means, with respect to a QHP, an
amount equal to the total premiums earned with respect
to a QHP, including any premium tax credit under any
governmental program, reduced by the allowable administrative costs of the plan.

 49a
Taxes and regulatory fees mean, with respect to a
QHP, Federal and State licensing and regulatory fees
paid with respect to the QHP as described in § 158.161(a)
of this subchapter, and Federal and State taxes and assessments paid with respect to the QHP as described in
§ 158.162(a)(1) and (b)(1) of this subchapter.
Transitional State means a State that does not enforce compliance with § 147.102, § 147.104, § 147.106,
§ 147.150, § 156.80, or subpart B of part 156 of this subchapter for individual market and small group health
plans that renew for a policy year starting between January 1, 2014, and October 1, 2014, in accordance with the
transitional policy outlined in the CMS letter dated November 14, 2013.
28. 45 C.F.R. 153.510 provides:
Risk corridors establishment and payment methodology.

(a) General requirement. A QHP issuer must adhere to the requirements set by HHS in this subpart and
in the annual HHS notice of benefit and payment parameters for the establishment and administration of a program of risk corridors for calendar years 2014, 2015, and
2016.
(b) HHS payments to health insurance issuers.
QHP issuers will receive payment from HHS in the following amounts, under the following circumstances:
(1) When a QHP’s allowable costs for any benefit
year are more than 103 percent but not more than 108
percent of the target amount, HHS will pay the QHP issuer an amount equal to 50 percent of the allowable costs
in excess of 103 percent of the target amount; and

 50a
(2) When a QHP’s allowable costs for any benefit
year are more than 108 percent of the target amount,
HHS will pay to the QHP issuer an amount equal to the
sum of 2.5 percent of the target amount plus 80 percent
of allowable costs in excess of 108 percent of the target
amount.
(c) Health insurance issuers’ remittance of
charges. QHP issuers must remit charges to HHS in
the following amounts, under the following circumstances:
(1) If a QHP’s allowable costs for any benefit year
are less than 97 percent but not less than 92 percent of
the target amount, the QHP issuer must remit charges
to HHS in an amount equal to 50 percent of the difference between 97 percent of the target amount and the
allowable costs; and
(2) When a QHP’s allowable costs for any benefit
year are less than 92 percent of the target amount, the
QHP issuer must remit charges to HHS in an amount
equal to the sum of 2.5 percent of the target amount plus
80 percent of the difference between 92 percent of the
target amount and the allowable costs.
(d) Charge submission deadline. A QHP issuer
must remit charges to HHS within 30 days after notification of such charges.
(e) A QHP issuer is not subject to the provisions of
this subpart with respect to a stand-alone dental plan.
(f ) Eligibility under health insurance market
rules. The provisions of this subpart apply only for
plans offered by a QHP issuer in the SHOP or the individual or small group market, as determined according
to the employee counting method applicable under State

 51a
law, that are subject to the following provisions:
§§ 147.102, 147.104, 147.106, 147.150, 156.80, and subpart B of part 156 of this subchapter.
(g) Adjustment to risk corridors payments and
charges. If an issuer reported a certified estimate of
2014 cost-sharing reductions on its 2014 MLR and Risk
Corridors Annual Reporting Form that is lower than the
actual value of cost-sharing reductions calculated under
§ 156.430(c) of this subchapter for the 2014 benefit year,
HHS will make an adjustment to the amount of the issuer’s 2015 benefit year risk corridors payment or
charge measured by the full difference between the certified estimate of 2014 cost-sharing reductions reported
and the actual value of cost-sharing reductions provided
as calculated under § 156.430(c) for the 2014 benefit
year.