The U.S. Court of Federal Claims ruled on May 19, 2026, to approve a five-percent attorney fee for Class Counsel in the case of Common Ground Healthcare Cooperative v. United States (Docket No. 17-877). This decision comes after a lengthy legal battle concerning unpaid cost-sharing reduction (CSR) payments owed to health insurers under the Affordable Care Act (ACA). The ruling is significant as it affects numerous health care cooperatives and could set a precedent for future cases involving similar claims.
Common Ground Healthcare Cooperative, along with other similarly situated insurers, filed a class action lawsuit against the United States in 2017. The lawsuit challenged the government's failure to make risk corridor payments to Qualified Health Plan (QHP) issuers as mandated by the ACA. Following the initial complaint, the case evolved to include claims for unpaid CSR payments, which are designed to lower out-of-pocket costs for eligible health insurance customers.
The dispute arose after the government ceased CSR payments in October 2017, citing a lack of congressional appropriation for such payments. This led to the class action lawsuit, which sought to recover the owed CSR payments for the 2017 and 2018 benefit years. The case was certified as a class action in April 2018, with Common Ground appointed as the class representative and Quinn Emanuel Urquhart & Sullivan, LLP as lead counsel.
In February 2019, the court ruled in favor of the plaintiffs, granting a judgment of over $1.5 billion for the class. However, the government appealed the decision, leading to further litigation that extended over several years. The case saw a significant development when the U.S. Court of Appeals for the Federal Circuit affirmed in part and reversed in part the lower court's decision, ultimately allowing for settlement negotiations.
After extensive negotiations, the parties reached a settlement agreement in 2025, which was preliminarily approved by the court. Class Counsel subsequently filed a motion for approval of attorney fees, requesting a five-percent fee from the settlement amount. The court directed class members to submit any objections to the fee request.
Only one class member, Quartz Benefits, objected to the fee request, suggesting that a lower fee of 2.5 percent would be more appropriate. However, the court found that the five-percent fee was justified based on several factors, including the quality of counsel, the complexity of the litigation, and the risk of non-recovery.
The court noted, "The benefits that Class Counsel generated for the Settlement Classes justify a five-percent fee award based on the seven Moore factors, and a lodestar cross-check confirms that a five-percent fee award is reasonable." This statement underscores the thorough analysis the court conducted in evaluating the fee request.
The ruling has significant implications for health insurers and similar entities that rely on CSR payments. It reinforces the importance of legal representation in navigating complex healthcare laws and could influence future cases involving unpaid government obligations to insurers.
Looking ahead, it is unclear if the government will appeal this decision. The case has already gone through multiple levels of litigation, and any further appeal could prolong the resolution of the matter. However, for now, the court's decision stands, allowing Class Counsel to receive the approved attorney fees while also ensuring that the settlement benefits the class members as intended.