AHA and AMA File Lawsuit Against Biden Administration Over Implementation of the No Surprises Act

Toward the end of 2021, the American Hospital Association (AHA) and the American Medical Association (AMA) filed a joint lawsuit against the United States Department of Health and Human Services (HHS) and several other agencies and agency heads, challenging a narrow piece of the implementation of the No Surprises Act. In addition to the AHA and AMA, several providers (Renown Health, UMass Memorial Health Care Inc., and two North Carolina physicians are named as plaintiffs.

Under the No Surprises Act, surprise billing disputes are routed through an arbitration process, which providers have argued favors the side of health insurers in negotiations. The issue that the plaintiffs take up is that in a September 30, 2021, interim final rule by the Biden Administration, the arbiters are directed to go with the rate that is the closest to the health plan’s qualified payment amount, their median contract rate for the same or similar services in a particular geographic region. However, the providers argue that such a direction stymies any meaningful contract negotiations and “deviates from Congress’ balanced design.” Plaintiffs believe that this direction will “all but ensure that hospitals, physicians, and other providers will routinely be undercompensated by commercial insurers and patients will have fewer choices for access to in-network services.”

The groups note that they do not want the No Surprises Act overturned, but instead, want the Biden Administration to revise the implementation of the dispute resolution process. In its press release announcing the suit, the AMA notes that the lawsuit “does not prevent the law’s core patient protections from moving forward and will not increase out-of-pocket costs to patients” and that it only wants to “force the Administration to bring the regulations in line with the law before the dispute negotiations begin.”

“No patient should fear receiving a surprise medical bill,” said Rick Pollack, AHA president and CEO. “That is why hospitals and health systems supported the No Surprises Act to protect patients and keep them out of the middle of disputes between providers and insurers. Congress carefully crafted the law with a balanced, patient-friendly approach and it should be implemented as intended.”

“Congress established important patient protections against unanticipated medical bills in the No Surprises Act, and physicians were a critical part of the legislative solution,” said AMA President Gerald E. Harmon, M.D. “But if regulators don’t follow the letter of the law, patient access to care could be jeopardized as ongoing health plan manipulation creates an unsustainable situation for physicians. Our legal challenge urges regulators to ensure there is a fair and meaningful process to resolve disputes between health care providers and insurance companies.”

Congressional Statement

In November 2021, a bipartisan group of more than 150 lawmakers voiced concerns about the independent dispute resolution provisions put forth in the September 2021 interim final rule by the Administration. In their letter, they urged the amendment of the interim final rule “in order to align the law’s implementation with the legislation Congress passed.”