For the fourth time in a row, a federal judge has sided with the Texas Medical Association (TMA) in its legal challenges to regulations that implement the federal No Surprises Act (NSA). The TMA brought another one of its legal actions back in November, alleging that certain provisions of the NSA regulations inappropriately link providers’ payment to the qualifying payment amount (QPA).
The plaintiffs asserted that the U.S. Department of Health and Human Services (HHS) and the other federal departments empowered by the NSA to develop implementing regulations (collectively described hereinafter as “departments”) had crafted the regulations in such a way as to “skew negotiations in favor of health insurers so strongly that health insurers will force physicians out of insurance networks and physicians will face significant practice viability challenges, struggling to keep their doors open in the wake of the pandemic.”
Here Comes the Judge
In an August 24 decision, the U.S. District Court for the Eastern District of Texas disallowed several provisions related to the QPA. According to the American Hospital Association (AHA), which filed an amicus curiae brief supporting the TMA action:
The court specifically disallowed several regulatory provisions related to the QPA calculation, including those that could enable insurers to include in the calculation of QPAs contracted rates for services that providers have not provided, as well as allowing self-insured group health plans to use rates from all plans administered by a third-party administrator in calculating the QPA.
According to Becker’s Hospital Review, Judge Jeremy Kernolde struck down TMA’s challenge regarding disclosure requirements, according to the lawsuit. “While the court disagreed with TMA regarding disclosure requirements in the rules, we remain pleased with the overall outcome,” TMA President Rick Snyder, MD said in an August 25 statement.
The judge’s latest ruling was the second time he sided with the TMA in August. On Aug. 3, he ruled that the departments did not follow notice and comment requirements before raising administrative fee rates by a seven-fold factor. In addition, the court invalidated certain rules that narrowed the batching of claims for arbitration. Following that decision, HHS said it was temporarily suspending the independent dispute resolution (IDR) process.
T for Texas
This latest action marks the fourth filing in federal court by the TMA in its battle against the departments’ NSA regulations. Its string of legal wins is remarkable. What is even more remarkable is that we only seem to hear about this one local group that is making an ongoing difference as it concerns national policy. Where are the medical associations of other states or the national specialty societies?
It is quite interesting to see how one judge in one district of one state can cause a significant segment of the federal government to ditch major policy directives to which it has devoted significant time and resources in developing. Score another one for the local underdogs.
As a result of this latest legal victory, the Centers for Medicare and Medicaid Services (CMS)—an agency within HHS—announced on August 25 that the IDR process will be suspended, in response to the district court ruling. The suspension will remain in place until such time as the departments are able to develop and publish new rules that comport with the court’s latest decision. According to a notice on the CMS website, dated August 25:
As a result of the TMA III decision, effective August 25, 2023, the Departments have temporarily suspended all Federal IDR process operations in order to make changes necessary to comply with the court’s opinion and order. Disputing parties should continue to engage in open negotiation.
That last sentence is important to notice as negotiations—without a federally approved arbiter—is the only way disputing parties can proceed until new regulations are in place.
There is no other update or timeline at this point relative to a final and legally approved set of NSA regulations. We don’t even know if this district court judge’s rulings will be affirmed by the U.S. District Court of Appeals (Fifth Circuit, New Orleans). So, once again, out-of-network providers in participating hospitals find themselves in a holding pattern, waiting to see if there will be a safe place to land.
With best wishes,
Senior Vice President—BPO