A federal judge has ruled that a lawsuit filed by Community Health Options, in which the Maine-based health insurance cooperative is seeking to recover millions of dollars from the federal government, can proceed.

The cooperative claims that it owed $22.9 million from a program designed to help insurers manage costs for the first few years of operation under the Affordable Care Act.

CHO, which is based in Lewiston, paid $2 million into the “risk corridors” pool in 2014, when it was the only cooperative in the country set up after the ACA went into effect to turn a profit. But after making $7 million in 2014, it lost $31 million in 2015 and has set aside a reserve fund of $43 million to cover potential losses this year.

CHO filed its suit against the Department of Health and Human Services in August, saying it is owed the money to help offset part of the losses it suffered last year.

DHHS had asked a judge in the U.S. Court of Federal Claims to put the CHO lawsuit on hold while it deals with a dozen similar cases from other insurers.

Last week, Senior Judge James F. Merow denied the request, saying that having 13 cases on the same issue “does not strike this court as an overwhelming number of cases.” Merow also said the government would likely be able to press the same legal arguments in all the cases, since the insurers are all seeking money from the risk corridors pool. That lessens the workload on the lawyers representing DHHS, he said, because “the same arguments and legal authority should be applicable to each.”

Merow, however, did give the federal government more time to respond to the CHO lawsuit and the insurer’s request for a summary judgment in the case. He said DHHS needs to file those arguments by Jan. 13.


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