Texas Medical Association sues to block parts of surprise billing ban

Dive Brief:

The Texas Medical Association has sued various agencies of the federal government to stop the implementation of the No Surprises Act, which bans surprise medical billing. Joining the TMA in its suit is Adam Corley, an emergency room physician in Tyler, Texas.
The lawsuit primarily takes issue with the independent dispute resolution process the regulations governing the law put in place. The ban is slated to take effect on Jan. 1. Payers have been unable to get the law's implementation delayed.
The 35-page complaint was filed last week in the United States District Court for the Eastern District of Texas, the same branch of the federal court system that ruled the Affordable Care Act was unconstitutional in 2018.

Dive Insight:

The lawsuit filed by the TMA against HHS, the Labor Department, the Treasury Department and the Office of Personnel Management claims that the dispute resolution process will be skewed toward payers because the final rules give too much weight to what is known as the qualifying payment amount — the median of contracted rates between payers and providers in determining what reimbursements should be for out-of-network care.

The lawsuit contends that payers have an outsized amount of leverage in determining that rate, although providers are allowed to give evidence showing that the qualifying payment amount is materially different from the appropriate out-of-network rate. The No Surprises Act also established an auditing process to ensure that HHS and Treasury are able to audit rate-setting by payers to ensure that it is being done in an appropriate fashion.

The lawsuit also claims that the regulations were issued without proper notice for TMA and other interested parties to submit comments. It has asked the court to vacate the portion of the rule regarding the qualifying payment amount. According to the suit, the TMA and Corley estimated it would first be used to settle disputes in March 2022.

The federal government has yet to file a formal response to the TMA lawsuit. Congress passed the No Surprises Act late last year as part of an omnibus spending bill.