HHS loses 4th No Surprises Act lawsuit

A federal judge for the fourth time sided with the Texas Medical Association in legal challenges over the No Surprises Act. 

The Texas Medical Association filed a lawsuit in November arguing that portions of the No Surprise Act artificially deflate the qualifying payment amount. The group alleged the provisions of the rule "skew negotiations in favor of health insurers so strongly that health insurers will force physicians out of insurance networks and physicians will face significant practice viability challenges, struggling to keep their doors open in the wake of the pandemic."

In his Aug. 24 ruling, U.S. District Judge Jeremy Kernolde — who has overseen all four lawsuits filed by the TMA — disallowed several provisions related to the QPA. According to the American Hospital Association, which filed an amicus brief supporting the TMA's argument, those disallowments include those that could allow insurers to include the calculation of QPAs contracted rates for services that providers have not provided, as well as allowing self-insured group health plans to use rates from all plans administered by a third-party administrator in calculating the QPA.  

Mr. Kernolde did strike down TMA's challenge regarding disclosure requirements, according to the lawsuit. 

"While the court disagreed with TMA regarding disclosure requirements in the rules, we remain pleased with the overall outcome," TMA President Rick Snyder II, MD, said in a Aug. 25 news release from the group. "[Aug. 24's] decision regarding the unfair and unlawful portions of the departments' July 2021 interim final rule is critical to implementing the law as intended by Congress."

The judge's latest ruling is the second time he has sided with the TMA in August. On Aug. 3, he ruled that federal agencies did not follow notice and comment requirements when hiking administrative fees. He also invalidated certain rules narrowing batching claims for arbitration.  

Following that decision, HHS said it was temporarily suspending the independent dispute resolution process — including the ability to initiate new disputes — until the federal agencies can provide additional instructions. On Aug. 11, CMS said it is lowering the IDR fee to $50. 

In total, TMA has filed four lawsuits challenging the No Surprises Act. 

The TMA filed its first No Surprises Act lawsuit in October 2021, successfully arguing that requiring arbitrators to heavily weigh figures created by insurers conflicted with the law and provided insurers with an unfair advantage unintended by Congress. 

The group filed a second lawsuit in September, arguing the final rule will "unfairly advantage health insurers by requiring arbitrators to give outsized weight or consideration to the [qualifying payment amount]." The court sided with the TMA in that case, which is being appealed by the federal government to the Fifth Circuit Court of Appeals. 

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