The Texas Medical Association issued a new lawsuit on September 22 taking aim at a modified rule implementing a surprise medical bill ban, with the group charging the regulation still unfairly favors insurers. The lawsuit shows that provider groups are not mollified by a revised rule issued by the Biden administration. The association charged the new rule, which revises a 2021 regulation, still tilts an arbitration process for out-of-network charges too far in payers’ favor. “There should be a level playing field for physicians and healthcare providers in payment disputes after they’ve cared for patients,” said Gary W. Floyd, M.D., the association’s president, in a statement.
Providers Challenge
The lawsuit is the latest legal fight over how to handle an arbitration process in the No Surprises Act, which outlawed surprise medical bills and called for the process to settle disputes between payers and providers on out-of-network charges. Providers have charged that the Biden administration’s interpretation of the law tilts arbitration too much in favor of insurers. The law outlines a process where the payer and provider submit their preferred amounts for a charge and the third-party arbiter picks one. However, the original final rule released last year called on the arbiter to put a heavy emphasis on the number closest to the qualifying payment amount, which is the geographic average rate for the service. Providers argue that the rule’s emphasis on the amount directly contradicts the law, which specifically did not include a benchmark rate.
The association filed a lawsuit last October challenging arbitration. The American Hospital Association and American Medical Association filed their own lawsuits, as did an air ambulance provider group. A federal judge sided with Texas Medical Association in a February ruling that invalidated the arbitration process. The judge said that Health and Human Services (HHS) didn’t provide adequate comment when it issued the interim final rule and the agency put too much emphasis on the qualifying payment. HHS appealed the ruling, but the administration also issued a new rule in August that tweaked arbitration, lessening the emphasis on the qualifying payment amount and called for the arbiter to put equal weight on other factors. However, providers appear to still be concerned that the qualifying payment amount remains a factor in arbitration.
AHA and AMA Statement
In a joint statement, the AHA and AMA said: “Hospitals and doctors strongly believe that no patient should fear receiving a surprise medical bill and that patients should be kept out of the middle of any billing disputes between providers and commercial health insurance companies. The AHA and AMA fully support the lawsuit just filed in the United States District Court for the Eastern District of Texas, which challenges the government’s August 2022 final rule regarding the No Surprises Act’s independent dispute resolution process. We intend to make our voice heard in this case by filing an amicus brief that explains how the final rule departs from Congressional intent just as the September 2021 interim final rule did. The Texas court previously held that the interim final rule impermissibly rewrote clear statutory terms by placing a thumb on the scale in favor of commercial insurers. The final rule suffers from the same problems. As was the case with the previous suit, the AHA and AMA want to see the law’s core patient protections move forward and seek only to bring the regulations in line with the law. We look forward to supporting the Texas Medical Association’s efforts to restore the balanced, patient-friendly approach that Congress passed and the AHA and AMA supported.”