Court rules as unlawful the arbitration process of No Surprises Act final rule
Portions of the final rule must be set aside, the federal court has ruled.
Photo: Alex Wong/Getty Images
A federal court has vacated provisions of a final rule regarding the arbitration process under the No Surprises Act and remanded it back for further consideration.
On Monday, U.S. District Court Judge Jeremy Kernodle sided with the Texas Medical Association's argument that the final rule unlawfully conflicts with the NSA in restricting arbitrators' discretion and unlawfully tilting the arbitration process in favor of the Qualifying Payment Amount set by insurers.
The court concluded that the challenged portions of the final rule are unlawful and must be set aside under the Administrative Procedure Act.
WHY THIS MATTERS
The Texas Medical Association has challenged portions of a final rule issued by the Department of Health and Human Services governing the arbitration process for resolving payment disputes between certain out-of-network providers and insurers. Having insurers, rather than providers, select the payment amounts was seen as a move to lower healthcare costs.
Providers challenged the interim final rule issued on September 30, 2021 by the Department of Health and Human Services, the Department of Labor and the Department of the Treasury. The court then vacated certain provisions, including the presumption in favor of the QPA.
The departments went back to the drawing board. In August 2022, they issued the final rule with new requirements for arbitrators when considering the statutory factors.
Dr. Gary W. Floyd, president of the Texas Medical Association said, "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 LARGER TREND
This lawsuit is among numerous cases brought by the Texas Medical Association against implementation of the No Surprises Act.
TMA argued this case in December, addressing the second of four TMA lawsuits against federal agencies related to rulemaking.
In two prior cases, the court reviewed an interim final rule and held that the NSA unambiguously requires arbitrators to consider several factors when selecting the proper payment amount – and does not instruct arbitrators to weigh any one factor or circumstance more heavily than the others.
The Texas Medical Association is also challenging a 600% hike in administrative fees for seeking federal dispute resolution in No Surprises Act situations. TMA is seeking relief in filing a fourth lawsuit in the U.S. District Court for the Eastern District of Texas.
Twitter: @SusanJMorse
Email the writer: SMorse@himss.org
