CMA supports Texas physicians in surprise billing lawsuit to ensure there is a fair dispute resolution process

October 04, 2022

The Texas Medical Association (TMA) has filed a second lawsuit against the federal government over its misguided implementation of the No Surprises Act, which guides the resolution of payment disputes between out-of-network physicians and insurers. The suit argues that the final regulations are a clear deviation from the law as written and all but ensure that physicians, hospitals, and other providers will routinely be undercompensated by commercial insurers and patients will have fewer choices for access to in-network services.

The California Medical Association (CMA) strongly supports TMA’s important legal action to ensure the Independent Dispute Resolution process is a meaningful avenue to dispute payment for services subject to the No Surprises Act and to protect patient access to in-network physicians.

The statutory language of the No Surprises Act as passed by Congress established a balanced process to fairly resolve payment disputes between physicians and insurers for certain unanticipated out-of-network medical bills, using several different criteria. When U.S. Department of Health and Human Services (HHS) unveiled the proposed rule, Congressional leaders challenged it as inconsistent with their intent and the clear direction of the law. 

This is the second TMA lawsuit challenging federal regulators’ blatant disregard for Congressional intent and the clear direction of the law to provide a fair, independent and neutral dispute resolution process that ensures arbiters will consider all factors in each case equally. Despite an earlier ruling from the U.S. District Court for the Eastern District of Texas, which resoundingly rejected a similar regulation, federal regulators have once again skewed the independent dispute resolution process in favor of the insurers.

The federal judge in the first lawsuit ruled that the median in-network payment rate was intended to be one factor in dispute resolution, not the only factor and ordered HHS to immediately vacate the rebuttable presumption standard favoring the median in-network payment rate.

HHS instead doubled down by issuing a new final rule that replaces the earlier presumption that was successfully challenged in court with a new set of requirements that give health insurers the same advantage. 

"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,” says TMA President Gary W. Floyd, M.D. “This is unfair to physicians, providers, and the patients we care for, so we had to seek fairness.”

Congress clearly rejected this approach by ensuring that there was no preference or priority given to any one factor in the dispute resolution process defined in the No Surprises Act.

The final rule unlawfully ties arbitrators’ hands and place an unmistakable “thumb on the scale” for the insurers. It ultimately allows insurers to shirk their responsibilities to patients, and enjoy even higher profits at the expense of patients, providers and employers. The rule disincentivizes insurers from negotiating contracts in good faith, paying appropriate rates, and providing robust physician networks to meet the needs of patients. 

This rule will harm patients’ access to medical care, particularly to specialty care in emergencies. t is already forcing more physicians out of network and accelerating consolidation, leading to increased costs to employers, patients and the government.


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