Texas Medical Association files another lawsuit against No Surprises Act

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The Texas Medical Association has filed its third lawsuit against the No Surprises Act. 

The complaint was made Wednesday by the TMA and Tyler Regional Hospital in Texas in the U.S. District Court for the Eastern District of Texas. It is against the Department of Health and Human Services, which released the rule; the Department of Labor; and the Department of the Treasury.

The lawsuit challenges certain portions of implementation of the July 2021 interim final rule. Specifically, the TMA and Tyler Regional Hospital allege that the rules "artificially deflate" the Qualifying Payment Amount, an insurer-calculated amount used in arbitration when deciding the appropriate out-of-network rate presented by physicians and insurers.

The system is rigged against doctors and in favor of the insurer, the TMA said by statement. The TMA and health system want a declaration that the federal departments acted unlawfully and vacate provisions of the July rule.

WHY THIS MATTERS

While the Qualifying Payment Amount is supposed to be the median in-network rate, the methodology conflicts with the way that the No Surprises Act requires insurers to calculate the payment amount, the TMA said. Physicians have the scales tipped against them from the outset of negotiations, TMA president Dr. Gary W. Floyd said. There is also a lack of transparency, he said.

"TMA is concerned that these provisions unfairly disadvantage physicians in payment disputes with health insurers and will ultimately rob patients access to physicians' care," Floyd said.

The rule allows insurers to include "ghost rates" in their QPA calculations. These are contract rates with physicians and providers who don't actually provide the health service in question, the TMA said. Because there is little motivation for those not providing the service to negotiate rates, this lowers the rates for the providers who actually provide the services.

The TMA contends that the rule allows insurers to use the rates of physicians who are not in the same or a similar specialty. It also says that the rule requires insurers to use an amount other than the total payment in calculating QPA when a contract includes risk sharing, bonus or penalty or other incentive-based adjustments.

Also, self-insured plans are able to opt in to a lower QPA, the TMA said.

THE LARGER TREND

This is the third lawsuit filed by the TMA against the No Surprises Act.

TMA filed its first lawsuit in 2021, alleging that the interim final rules governing arbitrations unlawfully required arbitrators to "rebuttably presume" the offer closest to the QPA was the appropriate out-of-network rate. TMA won at the district court level. The federal government declined to pursue an appeal. Instead, HHS published changes in final rules released on August 26.

TMA filed its second lawsuit in September challenging the final rules, alleging that they unfairly advantaged health insurers by requiring arbitrators to give outsized weight or consideration to the QPA. The hearing on that lawsuit is scheduled for December 20 in Tyler, Texas.

Last week, leaders of the House Ways and Means Committee sent a letter to several federal agencies saying the final rule implementing the No Surprises Act favors insurers and should be changed to reflect provider concerns.

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org