The American Hospital Association and the American Medical Association sued the federal government Thursday over its planned surprise billing arbitration process, which the groups say unfairly favors insurers and goes against Congress' intent.
The organizations asked the U.S. District Court for the District of Columbia to block only the provisions of the interim final rule that require arbitrators assisting payers and out-of-network providers through a billing dispute should first consider a plan's median in-network rate when parties can't resolve the situation themselves.
The lawsuit says the way federal officials constructed the arbitration process will harm AHA and AMA members and their patients by leading to underpayments for out-of-network bills. The organizations also predict the system will cause insurers to lower in-network rates, potentially forcing providers out of insurance networks. The American Society of Anesthesiologists accused Blue Cross Blue Shield of North Carolina last month of using surprise billing to cut rates.
The AHA and AMA suit argues the rule is also contrary to law, since the No Surprises Act directs arbitrators to consider the median in-network rate for the area but also several other factors when deciding how to handle a disputed bill.
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"Congress established important patient protections against unanticipated medical bills in the No Surprises Act, and physicians were a critical part of the legislative solution," AMA President Dr. Gerald Harmon said in a news release. "But if regulators don't follow the letter of the law, patient access to care could be jeopardized as ongoing health plan manipulation creates an unsustainable situation for physicians."
AHA, AMA and other provider groups voiced their disappointment with the rule in comments submitted to the federal government earlier this week. But insurers said the rule was fair and necessary to keep the dispute resolution process objective.
The Texas Medical Association filed its own lawsuit against the out-of-network bill dispute resolution process in October, and a hearing is set for February. The rule goes into effect Jan. 1.
