Aug. 5, 2024
Appeals Court Agrees With Physicians’ Argument
in Federal No Surprises Act Case
AUSTIN - Statement by G. Ray Callas, MD, Texas Medical Association (TMA) president, in response to the U.S Court of Appeals for the Fifth Circuit’s ruling Friday in TMA’s favor. The court affirmed the district court’s decision in an appeal filed by several federal government agencies to TMA’s earlier victory in a lawsuit challenging certain components of the federal agencies’ final rules governing independent dispute resolution for surprise medical bills under the No Surprises Act. TMA argued the case in December 2022 in the U.S. District Court for the Eastern District of Texas. The district court later ruled in TMA’s favor, prompting the federal government appeal.
It was the second of four TMA lawsuits against federal agencies related to rulemaking under the surprise-billing arbitration law.
TMA argued the agencies – when implementing the federal surprise billing independent dispute resolution processes – adopted rules that conflict with the law and skew results in favor of insurers. TMA believes these rules are tipped to the detriment of both physicians and the patients they serve.
“TMA is pleased the U.S. Court of Appeals for the Fifth Circuit has agreed with physicians in our challenge to the federal agencies’ unfair and unlawful August 2022 rules pertaining to implementation of the federal No Surprises Act surprise-billing law.
“We have long held that the federal departments lack authority to tell arbitrators how to weigh the factors during surprise billing arbitration.
“The government agencies’ rules unfairly advantaged insurers by requiring arbitrators to give outsized weight or consideration to an opaque, insurer-calculated amount – called the qualifying payment amount, or QPA – when choosing between an insurer’s offer and a physician’s offer in a payment dispute.
“TMA strongly believed tilting the scales in this manner was unfair to physicians, providers, and the patients we care for.
“We hope this resolves the issue once and for all: Congress intended the NSA to be a fair means of protecting patients from surprise bills. The federal agency rules must adhere to the law and cannot privilege the qualifying payment amount.”
TMA NSA Lawsuits Summary Timeline:
This judgment has a nationwide impact and decides the federal government’s appeal to the U.S. Court of Appeals for the Fifth Circuit of TMA’s second lawsuit challenging the No Surprises Act final rules published by the federal agencies. TMA alleged the final rules unfairly advantaged health insurers by requiring arbitrators to give outsized weight or consideration to the QPA. The QPA is an amount that is supposed to be the median in-network rate under the law, but the federal agencies’ methodology deflated the rate. In February 2023 the U.S. district court ruled in TMA’s favor on that case, which the federal government ultimately appealed.
TMA’s first lawsuit challenging the No Surprises Act rules – filed in October 2021, and which TMA also won at the federal district court level – alleged that in the interim final rules governing arbitrations between insurers and physicians, the agencies unlawfully required arbitrators to “rebuttably presume” the offer closest to the QPA was the appropriate out-of-network rate. The court ruled in TMA’s favor.
The U.S. District Court for the Eastern District of Texas also ruled in TMA’s favor in August 2023 in TMA’s third NSA lawsuit. TMA III challenged certain portions of the July 2021 interim final rules proposed by the U.S. departments of Health and Human Services, Labor, and the Treasury, along with the Office of Personnel Management, implementing the federal NSA that artificially deflate the QPA. The federal agencies appealed TMA III, which is currently pending at the U.S. Court of Appeals for the Fifth Circuit.
The court also ruled largely in TMA’s favor in August 2023 in the association’s fourth NSA lawsuit, which TMA filed in January 2023. In TMA IV, the district court held that the federal agencies violated the notice and comment requirements of the Administrative Procedure Act when imposing 600% higher fees on physicians seeking arbitration in disputes with health insurers under the federal NSA and adopting rules that narrowed the law’s provisions on “batching” claims for arbitration.
TMA is the largest state medical society in the nation, representing more than 57,000 physician and medical student members. It is located in Austin and has 110 component county medical societies around the state. TMA’s key objective since 1853 is to improve the health of all Texans.
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TMA Contacts: Brent Annear (512) 370-1381; (512) 656-7320
Swathi Narayanan (512) 370-1382; (408) 987-1318
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