Federal judge rules against HHS in challenge to surprise billing arbitration rule
The court also ruled that HHS erroneously failed to issue notices and comment periods on the rule.
A federal judge on Wednesday agreed with the Texas Medical Association that the arbitration process in the No Surprises Act violates the Administrative Procedure Act.
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, Becker’s Hospital Review reported. The ruling leaves in place protections for patients against getting bills for thousands of dollars in situations such as going to the emergency room and later finding out one of the doctors was not covered by their insurance.
Related: HHS’s Becerra says surprise billing rules will force providers to ‘tighten their belts’
The association and a Texas-based emergency room physician sued the U.S. Department of Health and Human Services last October in the eastern district of Texas. The lawsuit asserted that 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. The court also ruled that HHS erroneously failed to issue notices and comment periods on the rule.
“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,” said Dr. Diana Fite, immediate past president of the association. “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 countered that 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 health care for everyone, defending their own financial interests over the consumers and patients they serve,” President and CEO Matt Eyles said. “And this wrong and misguided ruling will result in higher health care costs and premiums for consumers and businesses — once again threatening health care affordability and access for all Americans.”
Four additional lawsuits have been filed. Three of them — filed in the District of Columbia, Georgia and Illinois — raise complaints similar to the Texas lawsuit. The fourth lawsuit, filed in New York, echoes those same challenges to the IDR rule but also argues that major provisions of the act are unconstitutional.
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