No Surprises Act Interim Final Rule and Arbitration Continues to Face Legal Challenges

The No Surprises Act, a law that aims to protect Americans covered by private health plans from receiving surprise medical bills relating to emergency services or non-emergency services from out-of-network providers at in-network facilities, has been met with trouble since its implementation at the beginning of the year.

In February, a district court in Texas issued a ruling that would disrupt the dispute resolution process outlined by the Act. Last Friday the U.S. Department of Justice (DOJ) and the U.S. Department of Health and Human Services (HHS) announced they would appeal that ruling.

The case was filed last year by the Texas Medical Association, challenging the interim final rule that implemented the No Surprises Act’s arbitration process that resolves payment disputes between out-of-network providers and health plans. The U.S. District Court in Texas called the arbitration process “baseball style,” because the provider and payer must submit a proposed payment amount with an explanation for the arbitrator, who is required to select one.

According to Healthcare Finance News, the court said that because the qualifying payment amount (QPA) is usually the median of the contracted rates as of January 31, 2019, insurers “now hold ultimate power, and are charged by regulation to calculate the QPA.” The court also said that HHS’s failure to comply with notice-and-comment requirements for the interim final rule provided a second and independent basis to set aside the rule.

After the DOJ’s announcement that it would appeal the ruling, three major medical associations filed suit to prevent insurer use of the rule’s dispute resolution process to “raise profits by narrowing medical networks, which denies patients their choice of providers and may delay diagnosis and treatment of injury.” These associations are the American College of Emergency Physicians (ACEP), the American College of Radiology (ACR) and the American Society of Anesthesiologists (ASA).

From an ASA press release:

ACEP, ACR and ASA will work with legal partners and patient advocates to ensure that the Surprise Billing Interim Final Rule ultimately complies with the text and spirit of the No Surprises Act as passed by Congress.

Inside Health Policy reports that several other stakeholders have filed suit, including the American Medical Association (AMA) and the American Hospital Association (AHA). The case was heard in the District Court for the District of Columbia in March. Additionally, the Biden administration said that it still plans to issue a final rule based on comments received on the interim final rule and that the rule is expected to be published by the summer.