The American Hospital Association and American Medical Association are urging the U.S. Court of Appeals for the 5th Circuit to uphold a lower court's ruling that invalidated a No Surprises Act final rule which they say favors insurers in the independent dispute resolution (IDR) process.
Texas federal judge Jeremy Kernodle ruled in February that the revised arbitration process "continues to place a thumb on the scale" in favor of insurers and "that the challenged portions of the final rule are unlawful and must be set aside." The lawsuit was filed by the Texas Medical Association and was supported by the AMA and AHA.
The federal government appealed the court's decision. In a friend-of-the-court brief, the AMA and AHA argue that overturning Mr. Kernolde's ruling "will harm not only physicians and hospitals, but also the very patients the [No Surprises Act] is intended to protect."
"A reinstated final rule would threaten across-the-board harms for providers — including in-network providers," the groups argue in the Sept. 18 amicus curiae brief. "This is because when insurers know they can rely on the IDR process to obtain a below-market payment amount for out-of-network items and services, that, in turn, will change their approach to in-network contracting. If an in-network provider refuses to accept a near-[qualifying payment amount] rate during contract negotiations, an insurer can simply terminate the in-network contract—forcing that provider out-of-network so that they can obtain their desired rate through IDR arbitration."
The Texas Medical Association filed four lawsuits challenging provisions of the No Surprises Act. Mr. Kernodle has overseen all four lawsuits and handed the organization wins in all four cases.