Filed-Rate Doctrine Bars FCA Claims Concerning ACA Premium Rates

The U.S. District Court for the Western District of Virginia recently dismissed with prejudice a federal FCA action, U.S. ex rel. Dixon v. Sentara Health Plans, that sought to challenge ACA premium rates filed in Virginia.¹ The decision, which was issued on July 31, 2026, affects every insurer submitting rates in connection with government health care programs, as well as the actuaries assisting with the development of those rates.

Background

In 2017, Optima Health Plan (Optima), a subsidiary of Sentara Health, worked with Milliman, Inc. (Milliman), its external actuarial consultant, to set proposed 2018 ACA premium rates for individual health plans in Virginia. The market that year was in flux: the incoming administration was threatening to upend the ACA, and in August 2017 Optima’s leading competitor, Anthem, withdrew from Virginia’s individual marketplace, leaving Optima as the only insurer in parts of the state. Optima submitted its proposed rates to Virginia’s Bureau of Insurance (BOI) and to CMS for review and approval.

Three Virginia residents later filed a qui tam complaint under the FCA, alleging that Milliman and Optima had inflated those rates through purposefully misstated predictive assumptions. The resulting purportedly inflated rates, they claimed, cost federal taxpayers hundreds of millions of dollars in the form of excess Advance Premium Tax Credit payments.

The relators’ allegations were scrutinized and rejected at every level before the case reached the court. BOI had already reviewed and approved Optima’s rates through its standard process.  When the relators raised objections regarding those rates, BOI sought additional information from Optima and Milliman and revisited the 2018 rate filing. After conducting a “concentrated” re-review, BOI again found the rates “supportable and actuarially justified,” never withdrawing its approval. A parallel actuarial malpractice complaint against the lead Milliman actuary fared no better: the Actuarial Board of Counseling and Discipline—the investigative and disciplinary body of the American Academy of Actuaries—investigated for ten months and found no violation of applicable standards.

Rebuffed by both the regulator and the industry watchdog, the relators took their case to federal court in 2020. DOJ investigated for roughly four years before ultimately declining to intervene. The plaintiffs nonetheless pressed on alone, retaining a legal team led by Rick Mountcastle, the former federal prosecutor who was involved in a high-profile litigation against an opioid manufacturer.

The Court’s Decision

The U.S. District Court for the Western District of Virginia held that the plaintiffs’ claims were barred by the “federal filed-rate doctrine,” a judicial doctrine that generally “precludes attacks through judicial cases on regulator-approved rates” and “essentially prevents a court from determining whether a filed rate is reasonable.”

As noted above, the relators’ complaints to BOI had prompted regulators to seek additional information from Optima and Milliman and to revisit the 2018 filing, yet BOI found the rates reasonable again and never withdrew its approval. Given those approvals, the court concluded that the relators’ FCA claims were beyond the authority of the courts: “To find that fraud was committed, the court must find that the premium rates approved by BOI were unreasonable. The filed-rate doctrine prohibits it from doing so.”

In concluding that the filed-rate doctrine barred the relators’ claims as a matter of law, the court rejected each of the plaintiffs’ five arguments against application of the doctrine:

1. Not an “eligibility challenge.” In an attempt to avoid the filed-rate doctrine, the plaintiffs first tried to recast their claims, contending that they were not challenging Optima’s premium rates but rather Optima’s “eligibility” to offer insurance under the ACA and in Virginia’s ACA Exchange. The court found this argument unconvincing, as the relators’ complaint was “replete with challenges to the rates charged by Optima,” with the premium rate increase itself “the very crux” of the relators’ claims.
2. No government exception. The relators next argued that the filed-rate doctrine does not bar the government from challenging rates. The court once again rejected the relators’ argument, finding “no clear authority supporting the application of a blanket ‘government exception’ to claims challenging rates.” The court went on to state that even if a government exception existed, there was “no clear authority” that such an exception would “apply to a qui tam case in which the government has declined to intervene.” The court noted that while qui tam relators may bring claims on behalf of the United States, they ultimately “are not the United States” and are “different in kind,” being “motivated primarily by prospects of monetary reward rather than the public good.” Moreover, DOJ’s decision not to intervene in the FCA action “further remove[d] this case from a typical ‘government action.’”
3. The ACA does not override the doctrine. The relators next argued that, because the filed-rate doctrine is a “judicially created doctrine,” Congress “has the authority to override it” and in fact did override it through the ACA. In an attempt to support that argument, the plaintiffs took the position that the filed-rate doctrine could not be “harmonized” with 42 U.S.C. § 18033(a)(6)(A), which states that federal funds paid through an ACA Exchange are “subject to the False Claims Act.” Once again, the court was unpersuaded. Noting that neither Section 18033(a)(6)(A) nor the ACA generally “refers to the filed-rate doctrine at all,” the court found “no clear or manifest legislative intent to repeal the filed-rate doctrine.”
4. Not merely a “damages doctrine.” The relators next argued that the filed-rates doctrine did not prevent their FCA claims because the doctrine only precludes a damages recovery “where the damages calculation itself will necessarily require the court to determine what a reasonable rate would have been,” whereas the treble damages and civil monetary penalties available under the FCA “could be determined without the court ever determining what a reasonable rate would be.” While the court agreed that FCA damages potentially could be calculated without a “precise determination of the rate that would be reasonable,” the court emphasized that “that fact alone” did not save the relators’ claims. The court explained that a key rationale underlying the filed-rate doctrine was the principle that regulators responsible for rate-making or rate-approving have a “particular expertise” that courts should not “second-guess.” Based on that rationale, the court concluded that the filed-rate doctrine should be applied with an “expansive reach,” precluding “any judicial action which undermines agency rate-making authority.” Because any imposition of FCA damages would require the court to first conclude the BOI-approved rates were unreasonable, the court held that the filed-rate doctrine barred all of the relators’ claims regardless of the relief sought.
5. No fraud exception. Finally, the relators argued that the filed-rate doctrine did not bar their claims because “their claims involve misrepresentations directed toward the rate-setting entity, essentially suggesting that there is a type of ‘fraud exception’ to the doctrine.” Once again, the court rejected the relators’ argument. The court, citing ample precedent, concluded that the doctrine applies even where rates are alleged to have been obtained through fraud on the regulator.

Although the court acknowledged the result was “harsh,” it concluded the law compelled dismissal with prejudice, meaning the case cannot be refiled in district court.

Implications

The district court’s decision carries several important implications for health care companies, actuarial firms, and ACA marketplace participants.

First, this case shows that the filed-rate doctrine remains a potent defense in health care fraud litigation. The ruling reinforces that rates reviewed and approved by state regulators are unassailable in subsequent civil litigation, even where fraud on the regulator is alleged. Entities in regulated rate-setting environments should take note of the doctrine’s broad protective sweep.

Second, the case illustrates how regulatory engagement can bolster a filed-rate doctrine defense. BOI’s concentrated re-review and reaffirmation of the challenged rates was central to the court’s analysis. Companies facing regulatory scrutiny over rate filings should ensure thorough engagement with regulators, since favorable determinations can serve as a critical shield in later litigation.

Third,the decision demonstrates that qui tam relators face an uphill battle invoking a “government exception” to the filed-rate doctrine, especially where the government has declined to intervene in an FCA action. For all of the above reasons, U.S. ex rel. Dixon v. Sentara Health Plans is a welcome case for potential FCA defendants in the ACA marketplace. The plaintiffs, however, have stated they intend to appeal to the U.S. Court of Appeals for the Fourth Circuit.

1. Dentons’ Health Care and Commercial Litigation teams represented one of the defendants, Milliman, in this case. The Dentons case team included New York partners Reid Ashinoff, Sean Cenawood, and Stephen Della Fera; Oakland/San Francisco managing associate Danika Rothwell; and Kansas City managing associate Jacob Margolies, with assistance from Washington, DC, partner Catharine Homer and Chicago partner Tim Storino. ↩︎