Cause of Action Institute Representing TABOR Foundation in Suit Challenging Colorado Hospital Provider Tax

Washington, DC – July 3, 2018 – Cause of Action Institute today announced that it is taking on the representation of the TABOR Foundation in its ongoing lawsuit TABOR Foundation, et al. v. Colorado Department of Health Care Policy & Financing, et al.  The case argues that the state has violated Colorado’s Taxpayer’s Bill of Rights (“TABOR”) by using a hospital provider tax to artificially increase costs and then collect higher reimbursements from the federal government under Medicaid.

“TABOR requires that the state get consent from the people before raising taxes.  But for the past eight years the state of Colorado has been taxing hospitals by hundreds of millions of dollars to fleece the federal government without the required TABOR vote.  The TABOR Foundation is rightly pushing back on the sweetheart deal that leaves taxpayers stuck with the bill,” said James Valvo, Counsel and Senior Policy Advisor at Cause of Action Institute.

“The people of Colorado are confronted with actions taken by the legislature and the governor to damage their constitution.  The Hospital Provider program was built on a lie, then made much worse.   The people should get a final vote on tax increases and new government debt, but that was taken from them in a dishonest power grab by elected officials,” said Penn R. Pfiffner, Chairman of the TABOR Foundation.  “The TABOR Foundation is grateful that Cause of Action Institute has stepped in to allow this lawsuit to go forward.  Its participation supports all the citizens of Colorado to reverse the corrupt government actions and to allow the people once again to control their state government.”

TABOR Foundation v. Colorado Department of Health Care Policy & Financing is an ongoing Colorado state court lawsuit that began in 2015 challenging a hospital provider tax levied by the state and used to increase Medicaid reimbursements. Under TABOR, new taxes cannot be collected without a vote of the people. The TABOR Foundation’s challenge argues that the hospital provider charge, that is currently reimbursed under Medicaid from the federal government, is in fact a tax and violates the TABOR amendment in Colorado’s state constitution because the state did not hold the required vote.

The case also argues Senate Bill 17-267, which converted the hospital provider tax from the Department to a newly created enterprise, violated the Colorado constitution’s single-subject requirement and failed to comply with the state excess revenue cap, which limits the amount of revenue the state can keep and spend.

Cause of Action Institute will be requesting summary judgment from the Colorado state district court on behalf of the Plaintiffs.

For more information, please contact Mary Beth Gombita,

CoA Institute Probes HHS’s Decision to Use Taxpayer Money to Pay Off Insurance Companies

Washington, D.C. – Cause of Action Institute (CoA Institute) today filed a Freedom of Information Act (FOIA) request to investigate the U.S. Department of Health and Human Services’ decision (HHS) to shift money away from taxpayers to pay off insurers.


The Affordable Care Act (ACA) established the transitional reinsurance program that requires HHS to make payments to health insurers who enroll high-risk individuals and deposit a portion of the contributions from insurers into the U.S. Treasury. Unfortunately for taxpayers, it appears when HHS collected less funds than required by the ACA, the agency decided to allocate all transitional reinsurance program funding to health insurers, depriving taxpayers of billions of dollars.

CoA Institute President and CEO, and former federal judge, Alfred J. Lechner, Jr.:

“COA Institute seeks to understand why the Obama Administration bailed out insurance companies with money that should have been returned to the U.S. Treasury to benefit taxpayers. Providing insurers with the entire contribution from the transitional reinsurance program is not the intention of section 1341(b)(4) of the Affordable Care Act. American taxpayers have a right to know why the Obama Administration skirted the law and gave money intended for the U.S. Treasury to insurance companies.”


Section 1341 of the ACA created the transitional reinsurance program. This program requires that HHS collect reinsurance contributions from health insurance providers and third party administrators on behalf of group health plans. In order to comply with the law, HHS was supposed to use those contributions to make payments to health insurers who enroll high-risk individuals and deposit a portion of the contributions in the U.S. Treasury. In total for 2014, 2015, and 2016, taxpayers were scheduled to receive $5 billion. According to the Congressional Research Service, providing the entire contribution from the transitional reinsurance program to health insurance providers is “in conflict with a plain reading of 1341(b)(4).”

CoA Institute requests documents and communications to understand the Obama Administration’s decision to use taxpayer money to pay off health insurance companies. The full FOIA request is available HERE.