A regulation implementing the No Surprises Act is unfair to physicians and biased toward health insurance companies, the Texas Medical Association charges in a lawsuit filed against the the federal government Thursday.
The Texas group asks the U.S. District Court for the Eastern District of Texas to toss the interim final regulation on surprise billing, alleging it exceeds statutory authority and defies congressional intent. The medical society further contends that the departments of Health and Human Services, Labor, and Treasury and the Office of Personnel Management violated the law by not allowing comments on the rule.
Provider groups including the American Hospital Association and the Federation of American Hospitals have levied similar criticisms about the implementation of the surprise billing ban. Insurers and consumer advocates heralded the policy as a win for patients.
The No Surprises Act, enacted as part of an omnibus spending bill in February, effectively prohibits providers from billing patients for out-of-network emergency services or for services performed by out-of-network clinicians at in-network facilities.
Federal authorities issued the regulation the Texas doctors seek to block, which governs billing disputes between providers and payers, last month and it's due to take effect Jan. 1. The government published a separate interim final rule that banned surprise bills from many types of providers in July.
The Texas Medical Association argues the September rule undermines doctors in its complaint, and describes the regulation as "manifestly unlawful." The independent dispute resolution process outline in the regulation will "unfairly skew" outcomes in favor of insurance companies, "granting them windfall they were unable to obtain the legislative process," the lawsuit says.
As the rule spells out, billing disputes will run through independent arbiters, who will weigh both sides' proposals on appropriate reimbursement. According to the Texas Medical Association, allowing the arbiter to use the "qualifying payment amount" as the basis for determining fair prices for out-of-network services tilts the playing field toward health insurance companies. Typically, a qualifying payment amount is based on an insurer's median contracted rate for a service within a specific geographic area.
Congress intended for arbiters to consider other factors equally, not establish the qualifying payment amount as a benchmark for billing disputes, the Texas medical society contends.
"Other state surprise medical billing laws have set benchmarks that are similar to the [qualifying payment amount], in that they are based on median contract rates as calculated solely by payers with little government oversight and no visibility by healthcare providers," the complaint says. "Experience in these states have shown that tying arbitrations to a benchmark like the [qualifying payment amount] drives down provider reimbursement."