Common Ground Healthcare Cooperative v. United States
Common Ground Healthcare Risk Corridors Class Action
Case No. 17-cv-00877-MMS

Frequently Asked Questions

 

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  • You were sent the notice because government records show that you offered one or more Qualified Health Plans ("QHPs") under the Patient Protection and Affordable Care Act ("Affordable Care Act") in the 2016 benefit year, and that your allowable costs in the 2016 benefit year, as calculated by the Centers for Medicare and Medicaid Services, were more than 103 percent of your target amounts (as those terms are defined in the Affordable Care Act).

    The purpose of the notice is to inform you of a class action lawsuit regarding unpaid risk corridor amounts for the 2016 benefit year, to advise you of how your rights may be affected by this lawsuit, and to inform you how you can join or "opt in" to the lawsuit if you choose to do so. The class action lawsuit is called Common Ground Healthcare Cooperative v. United States, Case No. 17-877 C. This lawsuit is pending in the United States Court of Federal Claims.

  • Plaintiff Health Republic Insurance Company claims that Defendant United States has not fully paid the risk corridors payments for 2016 to which it and other insurers such as your organization are entitled under the Affordable Care Act. Section 1342 of the Affordable Care Act established a risk corridors program that applied to insurers who offered QHPs on the Affordable Care Act's insurance exchanges in any of the 2014, 2015, or 2016 plan years. The risk corridors program provided that QHP issuers would receive compensation from the United States if their losses exceeded a certain defined amount due to higher-than-expected utilization and medical costs for the issuer's insureds. At the same time, the risk corridors program provided that QHP issuers would pay the government a percentage of any unexpectedly high profits they made over similarly-defined amounts. During 2014, QHPs collectively incurred almost $2.9 billion in compensable losses under the risk corridors program. Similarly, QHPs also incurred substantial compensable losses in 2015, totaling about $5.8 billion, and again incurred approximately $3.95 billion in compensable losses in 2016. Defendant United States has denied it is liable for these alleged losses.

    In appropriations acts for 2015, 2016, and 2017, Congress prohibited the Centers for Medicare & Medicaid Services (“CMS”) and the United States Department of Health & Human Services (“HHS”) from making risk corridor payments from funds appropriated under those acts. HHS and CMS adopted a “budget neutral” approach to the program in which only risk corridor collections from QHP issuers would be used to make risk corridor payments out to other QHP issuers. HHS also stated that distributions under the risk corridor program would be reduced pro rata to the extent of any shortfall. As a result of this budget neutral approach (which Plaintiff contends in this lawsuit violates the Affordable Care Act), QHP issuers received only 12.6% of the “payments out” calculated by the statutory formula under the risk corridors program for the 2014 plan year, representing a $2.5 billion shortfall. Collections, or “payments in,” from the 2015 and 2016 plan years were even less, and HHS used “payments in” from those years to pay QHP issuers small portions of the “payments out” calculated by the statutory formula for the 2014 plan year, meaning that QHP issuers received no risk corridor compensation for the 2015 or 2016 plan years. Today, the collective difference between risk corridors “payments in” and “payments out” calculated by the statutory formula for the 2014, 2015, and 2016 plan years stands at over $12 billion.

    In June 2017, Plaintiff Common Ground Healthcare Cooperative filed a class action lawsuit in the United States Court of Federal Claims alleging that, through this “budget neutral” approach to the risk corridors program, the Government violated Section 1342 of the Affordable Care Act and its implementing regulations. Plaintiff claims that the Class is entitled to relief under the Tucker Act, a federal statute that provides the United States Court of Federal Claims with jurisdiction to award money judgments against the federal government where a statute is money-mandating and requires payment. The case was assigned to Judge Margaret M. Sweeney. On January 8, 2018, the Court entered an order granting class certification and appointing Quinn Emanuel Urquhart & Sullivan, LLP as lead counsel for the Class.

    More detailed information about this lawsuit is contained in the Class Action Complaint filed in this lawsuit. The Class Action Complaint and the Court's decision on the Government's motion to dismiss are available at the Important Documents page.

  • Common Ground Healthcare Cooperative, the Plaintiff who filed this class action, seeks the following on behalf of itself and the Class:

    • Payment from the United States of the full amount of risk corridors payments for the 2016 plan year pursuant to section 1342 of the Affordable Care Act and its implementing regulations;
    • Payment to the lawyers who represent Common Ground Healthcare Cooperative who filed this lawsuit, as well as their expenses and fees associated with bringing and prosecuting this lawsuit —such payment would be drawn from any judgment, settlement, or other recovery obtained by Common Ground Healthcare Cooperative and the class; and
    • The award of any other relief that the Court deems just and proper.
  • In a class action lawsuit, one or more people or entities called “Class Representatives” (in this case Common Ground Healthcare Cooperative) sue on behalf of other people or entities who have similar claims. These people or entities together are a “Class” or “Class members.” The people or entities who sued—and all the Class Members who join the lawsuit—are called “Plaintiffs.” The party or entity against whom the lawsuit is brought is called a “Defendant.” Here, the United States is the Defendant, because it is the party ultimately responsible for paying amounts owed under the Affordable Care Act. The Court of Federal Claims will resolve all legal and factual issues for every eligible Class Member who timely submits a Class Action Opt-In Notice Form. Those individuals who do not timely submit a Class Action Opt-In Notice Form will be excluded from the Class in this case.

    More information about why the Court has allowed this lawsuit to be a class action is located in the Court's Order certifying the Class, available at the Important Documents page.

  • You will need to decide whether you wish to join this lawsuit as a Class member. You are not part of the Class unless and until you fill out the Class Action Opt-In Notice Form located at the end of this Notice or at the Electronic Opt-In Submission page. Rule 23 of the Rules of the United States Court of Federal Claims requires that Class Members wishing to participate in this class action must join or “opt-in” to this class action lawsuit. If you fit the description in the next question, you may opt-in and join this lawsuit.

    Please note that this "opt-in" procedure is different than many other class action lawsuits in the United States because, if you did nothing, you will not be able to participate in the lawsuit as a Class member.

  • Under the Rules of the United States Court of Federal Claims, the Court has allowed the lawsuit to be a class action on behalf of the following:

    All persons or entities offering Qualified Health Plans under the Patient Protection and Affordable Care Act in the 2016 benefit year, and whose allowable costs in the 2016 benefit year, as calculated by the Centers for Medicare & Medicaid Services, were more than 103 percent of their target amounts (as those terms are defined in the Patient Protection and Affordable Care Act). Excluded from the Class are the Defendant and its members, agencies, divisions, departments, and employees.

  • If you choose to participate in this lawsuit, and potentially participate in any recovery that may result from this lawsuit, it is extremely important that you read, sign, and return the Class Action Opt-In Notice Form electronically via the website or by mail, courier or facsimile to Class Counsel. The various locations and methods by which you may submit a Class Action Opt-In Notice Form are listed below:

    By Internet:     

    http://www.riskcorridorsclassaction2016.com/optin
    • A copy of the Class Action Opt-In Notice Form may also be downloaded on this website.

    By Courier:     

    Risk Corridors Class Action
    c/o JND Class Action Administration
    2727 Western Avenue, Suite 200
    Seattle, WA 98121

    By Mail:     

    Risk Corridors Class Action
    c/o JND Class Action Administration
    PO Box 91307
    Seattle, WA 98111

    By Facsimile:     

    1-866-282-0407

     

    The Class Action Opt-In Notice Form must be submitted, faxed, postmarked, or delivered on or before 60 days after the date of this Notice, that is, on or before Monday, April 23, 2018.

     

    If you do not wish to participate in the lawsuit, you need not take any action.

  • If you are eligible to be a Class member and choose to join the Class, you will receive any monetary or other benefits obtained from the lawsuit. A judgment in this case will be binding on you, meaning you could not pursue your own separate lawsuit using your own attorney. Similarly, you may be bound by, and can share in, any settlement reached on behalf of the class. In the event Class Counsel and the United States reach a settlement, you will receive notice of the settlement and you may object to the settlement and be heard by the Court on your objection. In the case of any settlement reached before entry of judgment, Class Counsel may seek to decertify the litigation class and recertify a settlement class, which would allow any Class members that previously opted-in to decide whether to join the settlement class at that time.

    Any person or entity who submits a Class Action Opt-In Notice Form to join the Class need not appear in Court in order to participate. If you become a Class Member, your interests will be represented by the Class Representative and Class Counsel. Ultimately, the Court will rule on whether you are entitled to compensation and, if so, the amount of compensation owed to you.

    In order to join the Class, you must submit a Class Action Opt-In Notice Form by Monday, April 23, 2018. This means your Class Action Opt-In Notice Form must either be submitted electronically at http://www.riskcorridorsclassaction2016.com/optin, received by facsimile, postmarked, or hand delivered by Monday, April 23, 2018.

  • You will not have to pay any money out of pocket to participate in the Class Action. If the Class is successful in this litigation, however, Class Counsel will ask the Court’s permission to be compensated for litigating this case and representing the successful Class. Any sums received by Class Counsel in compensation will be deducted from any recovery, which will proportionately reduce the amount of any award each Class Member receives. If the case is unsuccessful, you will have no obligation for attorneys’ fees or costs.

    Class Counsel represents that it will request no more than 5% of any judgment or settlement obtained for the Class. The fee may be substantially less than 5% depending upon the level of class participation represented by the final membership of the Class. In any event, the exact percentage of Class Counsel’s fees will be determined by the Court subject to, among other things, the amount at issue in the case and what is called a “lodestar cross-check” (i.e., a limitation on class counsel fees based on the number of hours actually worked on the case). See, e.g., Geneva Rock Products, Inc. v. United States, 119 Fed. Cl. 581, 595-96 (2015); Loving v. Sec’y of Health and Human Servs., 2016 WL 4098722, at *4 (Fed. Cl. Spec. Mstr. July 7, 2016).

  • If you do not submit a Class Action Opt-In Notice Form electronically, postmarked, faxed, or hand delivered on or before Monday, April 23, 2018, you cannot participate as a Class Member in this case. As a result, you will not receive any money or benefits from the Court as a result of this lawsuit. However, you keep the right to hire your own lawyer to sue the United States separately about the same legal claims in this lawsuit and you will not be legally bound by any decision of the Court in this class action.

  • The Court has decided that attorneys at the law firm of Quinn Emanuel Urquhart & Sullivan, LLP, led by partners Stephen Swedlow, J.D. Horton, and Adam Wolfson, are qualified to represent you and all Class Members. Quinn Emanuel Urquhart & Sullivan, LLP is called “Class Counsel.” Class Counsel has experience handling this type of lawsuit. More information about Class Counsel is available at: www.quinnemanuel.com.

  • You do not need to hire your own lawyer because Class Counsel will work on your behalf and represent your interests if you join the Class. You have the right to have your own lawyer. Your own lawyer can appear in court for you if you want someone other than Class Counsel to speak on your behalf. If you choose to hire your own lawyer, you will have to pay that lawyer.

  • If the case is not resolved by a settlement, summary judgment, or otherwise, the Class Counsel will have to prove the claims of Plaintiff and the Class at trial. The parties are currently in the pre-trial discovery phase, during which they are exchanging information about the facts of the case. At a trial, the judge would hear all of the evidence to reach a decision about whether the Plaintiff or Defendant is right about the claims in this case.

  • You do not need to attend the trial. The Class Counsel will present the case on behalf of all Class members. You and/or your own lawyer are welcome, and entitled, to attend the trial at your own expense.

  • If the Class is successful and obtains money as a result of the trial or a settlement, you will be notified about how to participate and receive your share. The parties at this time do not know how long this will take.

  • If you have additional questions about the Notice, you may view the additional information available on this website, or you may contact Class Counsel:

    Stephen A. Swedlow, Esq.
    Quinn Emanuel Urquhart & Sullivan, LLP
    191 N. Wacker Drive, Suite 2700
    Chicago, IL 60661
    (312) 705-7400
    stephenswedlow@quinnemanuel.com

    Please do not contact the United States Court of Federal Claims with questions or requests for information.

FOR MORE INFORMATION

Visit this website often to get the most up-to-date information.

Mail

Risk Corridors Class Action Plan Year 2016
c/o JND Legal Administration
PO Box 91307
Seattle, WA 98111