HHS loses another No Surprises Act lawsuit

A Texas federal judge has sided with the Texas Medical Association for a third time in its series of legal challenges over the No Surprises Act, this time over a 600 percent hike in administrative fees when seeking dispute resolutions.   

The TMA filed the lawsuit in January — its fourth challenging provisions of the rule — arguing that the fee hike restricts many physicians' ability to seek arbitration when an insurer offers insufficient payment for care. The lawsuit came after federal agencies announced in October the administrative fees would remain $50 in 2023. Two months later, the agencies announced the fee would increase to $350 beginning in January 2023 "due to supplemental data analysis and increasing expenditures in carrying out the federal [independent dispute resolution] process since the development of the prior 2023 guidance."   

The medical group also disputed interim final rules that narrow the No Surprises Act's stipulations on "batching" claims for arbitration, which it argued Congress had authorized to encourage efficiency and minimize costs in the independent dispute resolution process

U.S. District Judge Jeremy Kernolde ruled Aug. 3 that federal agencies did not follow notice and comment requirements when hiking administrative fees. He also invalidated certain rules narrowing batching claims for arbitration.  

HHS said that as a result of the ruling the IDR process has been temporarily suspended, including the ability to initiate new disputes, until the federal agencies can provide additional instructions.

"While the court declined to provide deadline extensions and certain other requested relief, we remain pleased with the overall outcome," TMA President Rick Snyder II, MD, said in an Aug. 4 statement. "[The] decisions on batching rule provisions and administrative fees will aid in reducing barriers to physician access to the law’s arbitration process, which is vital to both patient access to care and practice viability."

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 TMA in that case, which is currently being appealed by the federal government to the Fifth Circuit Court of Appeals.  

The third lawsuit came in November, with the TMA alleging portions of the rule "artificially deflate the qualifying payment amount." That lawsuit is awaiting a decision.

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