Dozens of national, state medical groups challenge feds — again — over surprise-billing rule

The American Hospital Association and the American Medical Association, along with 30 additional national and state medical groups, filed amicus briefs Oct. 19 in support of a lawsuit from the Texas Medical Association that once again challenges the arbitration process established under the No Surprises Act.

The lawsuit was originally filed Sept. 22 in a Texas federal court alongside UT Health Tyler Regional Hospital and a physician.

The 2020 No Surprises Act protects patients from unexpected medical bills and limits how much they can be charged for emergency and nonemergency services from out-of-network providers. It also established an arbitration process for when payers and providers disagreed about these rates.

Under an interim final rule unveiled in July 2021, CMS directed the arbitrator in the independent billing dispute resolution process to assume that the qualifying payment amount, or the median in-network rate set by payers, is the appropriate out-of-network rate. 

The TMA filed a lawsuit Oct. 28 challenging the rule, alleging that CMS, under President Joe Biden's leadership, failed to follow clear direction from Congress about implementing the dispute resolution process. At the time, the association said the process was a "short-sighted approach" that would drive down reimbursement rates and encourage payers to narrow their networks.

A federal judge agreed and ruled against the administration Feb. 23 — a decision that was appealed by HHS in April.

CMS released a revised final rule Aug. 19, which the TMA claims in its new lawsuit still gives too much of an advantage to payers during arbitration.

"Similar to before, the new final rules unfairly advantage insurers by requiring arbitrators to give outsized weight or consideration to an opaque, insurer-calculated amount — called the qualifying payment amount — when choosing between an insurer's offer and a physician's offer in a payment dispute," TMA President Gary Floyd, MD, said. "This is unfair to physicians, providers, and the patients we care for, so we had to seek fairness."

The AMA and the AHA also filed a lawsuit against the original arbitration rule, though they have since moved to dismiss that challenge after the revised rule was issued and filed their amicus brief to support the new lawsuit.

"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 two groups said. "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."

The Physicians Advocacy Institute also filed an amicus brief in support of the TMA, which 14 state medical associations and 16 specialty associations joined.

"Federal regulators doubled down on their flawed dispute resolution approach by continuing to give undue consideration to a payment rate set by insurers for their own financial benefit," PAI CEO Kelly Kenney, said. "Insurers' profits have never been higher. Physicians are right to keep fighting federal regulators’'efforts to give insurers rate-setting power, so patients don’t lose access to critical health care services. Federal agencies overstepped their rulemaking authority. We think the court will continue to agree."

The 14 state medical associations that filed in support: California Medical Association, Connecticut State Medical Society, Medical Association of Georgia, Kentucky Medical Association, Massachusetts Medical Society, Michigan State Medical Society, Nebraska Medical Association, Medical Society of New Jersey, Medical Society of the State of New York, North Carolina Medical Society, Oregon Medical Association, South Carolina Medical Association, Tennessee Medical Association, and Washington State Medical Association.

The 16 specialty medical societies that filed in support: Texas Association of Neurological Surgeons, Texas College of Emergency Physicians, Texas Orthopaedic Association, Texas Radiology Society, Texas Society for Gastroenterology and Endoscopy, American Association of Neurological Surgeons, Congress of Neurological Surgeons, American Academy of Otolaryngology-Head and Neck Surgery, American Association of Orthopaedic Surgeons, American College of Hyperbaric Medicine, American College of Surgeons, American Osteopathic Association, American Society of Plastic Surgeons, Colorado Society of Anesthesiologists, Illinois Society of Anesthesiologists and  North American Spine Society.

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