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Federal appeals court greenlights CSR lawsuit settlement

The inter-branch battle over cost-sharing reduction payments took one big step toward closure Wednesday as a federal appeals court dismissed the U.S. House of Representatives' lawsuit against HHS.

The U.S. Court of Appeals for the District of Columbia Circuit dismissed the appeal lodged by the Obama administration after the House led by former GOP House Speaker John Boehner won an initial claim that HHS did not have the authority to pay out CSRs to insurers in the Obamacare exchanges without an appropriation from Congress.

President Donald Trump, after months of threatening to halt the payments, cut them off in October 2017. This triggered months of negotiation between the two top lawmakers on the Senate health committee, Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.), to appropriate CSRs. Their negotiations fell apart in March.

The lawsuit got complicated when 19 Democratic state attorneys general intervened in the case. Last December, the attorneys general, the GOP-led House and the Trump administration reached an agreement that would allow the state attorneys general to continue a separate lawsuit over the CSRs in a California federal court.

In March, the settlement hit a delay when the appellate judges asked the parties to explain the "exceptional circumstances" cited when the House backed out of the original suit against the Obama HHS.

In April, HHS argued in a brief that the exceptional circumstances standard did not apply to the settlement request and the two government branches could resolve the suit "amicably.

House Republicans applauded the decision as a triumph of congressional appropriation authority.

"In a battle over the separation of powers, the House has prevailed," House Speaker Paul Ryan (R-Wisc.) said in a statement. "When former Speaker John Boehner initiated this suit, it was to protect one of the House's most primary authorities: the power to spend."

Susannah Luthi covers health policy and politics in Congress for Modern Healthcare. Most recently, Luthi covered health reform and the Affordable Care Act exchanges for Inside Health Policy. She returned to journalism from a stint abroad exporting vanilla in Polynesia. She has a bachelor’s degree in Classics and journalism from Hillsdale College in Michigan and a master’s in professional writing from the University of Southern California.

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