On Wednesday, U.S. District Court for the Eastern District of Texas ruled in favor of a lawsuit filed by the Texas Medical Association (TMA) challenging the U.S. Department of Health and Human Services’ (HHS) approach to dispute resolution under the No Surprises Act (NSA). The ruling by a Texas judge applies nationwide and means that, barring a higher court’s intervention, the balanced dispute resolution process that Congress created by NSA is restored.

Late last year, the California Medical Association (CMA), through the Physicians Advocacy Institute (PAI), filed an amicus brief that argued that HHS’s NSA regulations were contrary to the law Congress enacted, and that by blatantly favoring the insurance industry, patient access to in-network physicians would be harmed when an emergency strikes.

“This is a major win for patients in California,” said CMA President Robert E. Wailes, M.D. “CMA worked closely with Congress for more than two years to develop a law that protects patients from surprise medical bills and allows physicians to fairly resolve disputes with insurers, and this decision restores the intent of Congress when they passed that law.”

To resolve billing disputes, the statutory language of the NSA called for a process that considers several different criteria; however, the flawed HHS regulation heavily favored the median in-network payment rate as the appropriate payment rate to be paid for out-of-network services in the dispute resolution process.

The Texas judge agreed that the challenged portion of the regulation was procedurally and substantively flawed, as it “conflicts with the unambiguous terms of the Act.” He ordered HHS to immediately vacate the rebuttable presumption standard favoring the median in-network payment rate.

When HHS unveiled the rule, Congressional leaders challenged it as inconsistent with their intent and the clear direction of the law. CMA feared that if the dispute resolution process was not balanced it would disincentivize insurers from contracting with physicians, dramatically reduce fair payments, threaten the sustainability of physician practices, and thus, diminish patient access to in-network medical care.

“The judge clearly agreed with physician organizations that the median in-network payment rate was intended to be one factor in dispute resolution, not the only factor,” said CMA CEO and PAI President, Dustin Corcoran. “CMA applauds the court’s decision to follow clear direction from Congress giving physicians a chance to fairly resolve disputes and encourage insurers to contract with adequate networks of physicians to meet the medical needs of patients.”