The country’s largest medical association has filed its fourth lawsuit to stop the implementation of federal rules connected to 2020’s No Surprises Act, which is meant to put a stop to surprise billing. The latest lawsuit challenges the requirement that all parties involved in an arbitration about a medical bill pay an administrative fee of $350.
The lawsuit arose because federal regulators increased the required fee for parties involved in arbitration. In October 2022 , federal agencies announced that parties involved in arbitration would have to pay $50 through 2023. Two months later, the regulators announced a fee hike of 600 percent to $350 beginning last month “due to supplemental data analysis and increasing expenditures in carrying out the Federal IDR process since the development of the prior 2023 guidance.”
The No Surprises Act was passed in 2020 and meant to prevent patients paying for a non-emergency procedure at an in-network facility done by an out-of-network provider, called “surprise bills.” According to the Texas Department of Insurance, the law bans balance bills in emergencies, when the patient didn’t have a choice of doctors for medical services, or for air ambulance services. The law requires insurance companies to pay these providers at an agreed rate or one determined by an arbitration process, called the independent dispute resolution (IDR). Each side makes their case for how much the procedure should cost, and the arbiter decides. As the rules formerly indicated, the arbiter often used the median rate of in-network prices for the procedure as one of the factors to determine the payment amount. Training experience, previous contracts, and the complexity of the service were also factors.
A surprise medical bill can be debilitating for a patient, and North Texas is at the epicenter of medical debt in the country. Tarrant County is the top county in the country for per capita medical debt, and Dallas County is second. Texas’ nation-leading uninsured rate of 18 percent (the national average is 9 percent) and higher than average medical costs have contributed to high medical debt in the region. The No Surprises Act is one way to reduce medical debt by preventing surprise medical bills that can occur even when a concerted effort is made to make sure all providers are in network.
But since the law’s inception, it has received pushback from medical associations who say that the rules of the arbitration aren’t fair and the burden is too much for providers. In March of last year, TMA won a judgment against the federal government when a judge ruled that regulators did not follow the text of the act when it required the arbitrators to use the median in-network rate in settling payment conflicts between insurers and out-of-network providers. Physicians wanted other factors, such as the complexity of services, market share, and prior contracted rates to be included.
Just last month, TMA won another summary judgment when the US District Court ruled in its favor about other rules connected to the implementation of the law. TMA argued that the final rules unfairly advantage insurers by requiring arbitrators to give disproportional consideration to the qualified payment amount when deciding between the physician and payor’s offer in a dispute. ““This decision is a major victory for patients and physicians. It also is a reminder that federal agencies must adopt regulations in accordance with the law. The decision will promote patients’ access to quality care when they need it most and help guard against health insurer business practices that give patients fewer choices of affordable in-network physicians and threaten the sustainability of physician practices,” said TMA President Dr. Gary Floyd.
The latest lawsuit, filed in the U.S. District Court of Eastern Texas, says that the fee hike for the arbitration process could effectively deny providers access to the process. It called the rules, which are being implemented by the U.S. departments of Health and Human Services, Labor, and the Treasury, and the U.S. Office of Personnel Management, “arbitrary and capricious.” TMA, which represents 57,000 physicians and is the country’s largest state medical association, is also protesting the grouping, or “batching” of arbitration cases to improve efficiency and minimize cost.
“Why would doctors and providers pay the $350 nonrefundable administrative fee to arbitrate a $200 or so payment dispute with a health insurer?” said Floyd via statement. “The fees deny physicians the ability to formally seek fair payment for taking care of our patients, and that’s just wrong.”
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