Brooklyn federal judge dismisses a challenge to ‘No Surprises Act’
Attorneys argued that the law, which limits how much patients have to pay out-of-network providers in emergencies and other scenarios, violated physicians’ Fifth, Seventh and Fourteenth Amendment rights.
U.S. District Judge Ann Donnelly of the Eastern District of New York on Wednesday granted a motion to dismiss a lawsuit challenging the constitutionality of the federal No Surprises Act, a 2020 law aimed at addressing surprise healthcare bills.
Attorneys at Abrams Fensterman filed the suit on behalf of a Long Island surgeon, Daniel Haller, in December, arguing that the law, which limits how much patients have to pay out-of-network providers in emergencies and other scenarios, violated physicians’ 5th, 7th and 14th Amendment rights.
“It takes the physicians’ property without just compensation by prohibiting physicians from recovering the balance of the fair value of their services from their patients,” Abrams Fensterman partners Robert Spolzino, Edward Smith and Justin Kelton write in the complaint.
The Abrams Fensterman team filed a motion for a preliminary injunction in April, arguing that the act’s independent dispute resolution process was “in reality, not independent at all, since it is designed to end in a result controlled by the insurers.”
The suit named the U.S. Department of Health and Human Services, the U.S. Office of Personnel Management, the U.S. Department of Labor, the U.S. Department of the Treasury and their respective leaders as defendants.
Attorneys in the U.S. Department of Justice Civil Division and the U.S. Attorney’s Office for the Eastern District of New York filed the motion to dismiss in April, arguing that the “balance of the equities and the public interest” weighed in favor of allowing the law to remain in place.
Donnelly found Congress created “a new public right” when it passed the No Surprises Act, permitting “health care providers to recover payment directly from insurers for out-of-network services.”
“Congress is not precluded from creating a distinct claim for out-of-network providers against insurers and assigning the adjudication to arbitration,” Donnelly writes, finding that the independent dispute resolution process does not violate the plaintiffs’ rights under the 7th Amendment.
Donnelly also rejected the plaintiffs’ takings claim.
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“While the Act prohibits out-of-network providers from balance billing patients covered by the Act, it also gives providers a right to recover the value of the services provided directly from insurers and creates a process to adjudicate that right,” she writes.
Donnelly found that the plaintiffs’ claim for relief on an alleged due process claim was not ripe, and she dismissed it for lack of subject matter jurisdiction without prejudice while dismissing the 7th Amendment and takings claims with prejudice.
“At this stage, there is no evidence of IDR decisions about payment amounts, how those amounts compare to the parties’ submitted offers, or the extent to which the IDR entities consider additional evidence submitted by the parties,” she says.
Spolzino did not respond to a request for comment.