Fifth Circuit Reverses District Court, Rules for United States in Health Insurance Fee Case

On July 31, 2020, the U.S. Court of Appeals for the Fifth Circuit issued its ruling in Texas v. Rettig, upholding the federal requirement that states reimburse Medicaid managed care organizations (MCOs) for the health insurance provider fee (HIPF) that MCOs pay under the Affordable Care Act (ACA).

Manatt, Phelps & Phillips, LLP filed an amicus brief in the case on behalf of the Medicaid Health Plans of America (MHPA), a nonprofit trade association of MCOs, in support of reversal of the district court’s 2018 decision, which would have set aside key aspects of the federal regulation that requires states to pay Medicaid MCOs actuarially sound capitation rates, including reimbursement for the HIPF. MHPA’s brief explained the real-world consequences of the district court’s judgment and argued that the plaintiff states lacked standing to challenge the regulation, because the plaintiff states conceded that even if the regulation were struck down, they would still be required to reimburse the MCOs for the HIPF. The Fifth Circuit concluded that the Medicaid managed care actuarial soundness regulation is lawful.

The Manatt team representing Medicaid Health Plans of America was led by partner Michael Kolber and included appellate partner Benjamin G. Shatz, litigation partner Andrew Zimmitti, and Manatt Health counsel Adam M. Finkelstein and associate Julian Polaris.

Click here to read Manatt’s full amicus brief.

Click here to read the Fifth Circuit’s decision in Texas v. Rettig.

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