Judge rules against HHS, surprise billing arbitration rule

A federal judge ruled Feb. 23 that the contentious No Surprises Act arbitration process implemented by HHS violated the Administrative Procedure Act, delivering a win to the Texas Medical Association, according to Law360

The association sued the Biden administration in October 2021 over the surprise billing resolution process, claiming that leadership failed to implement a rule that followed Congress' vision for the bill. 

Specifically, providers have taken issue with a portion of the process that assumes the qualifying payment amount, which is the median in-network rate set by health insurers, is the appropriate out-of-network rate. 

The Texas Medical Association claimed the reliance on the qualifying payment amount does not allow arbitrators to exercise discretion and weigh other relevant factors. Presiding Judge Jeremy Kernodle agreed, saying the rule "places its thumb on the scale" for the qualifying payment amount, according to Law360

The court also ruled that HHS erroneously failed to issue notices and comment periods on the rule. 

In a news release shared with Becker's, Diana Fite, MD, immediate past president of the Texas Medical Association, called the ruling "a major victory" for providers and patients. 

"This decision is an important step toward restoring the fair and balanced process that Congress enacted to resolve surprise billing disputes between health insurers and physicians," Dr. Fite said. "The decision will promote patient access to quality care when they need it most and will guard against health insurer business practices that give patients fewer choices of affordable in-network physicians and threaten the sustainability of physician practices."

America's Health Insurance Plans — one of the lobbying groups that submitted amicus curiae briefs supporting HHS — said the decision weakens patient protections and enables providers to profit off the arbitration process. 

"[Providers] have sued to stop the implementation of rules that would lower the cost of healthcare for everyone, defending their own financial interests over the consumers and patients they serve," said Matt Eyles, AHIP president and CEO. "And this wrong and misguided ruling will result in higher healthcare costs and premiums for consumers and businesses — once again threatening healthcare affordability and access for all Americans."

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