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Texas Medical Association files third lawsuit over surprise billing ban

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Dive Brief:

  • The Texas Medical Association filed a third lawsuit Wednesday that again targets the implementation of the federal law that protects consumers from surprise medical bills.
  • The lawsuit challenges the methodology for calculating payments that play a central part in the arbitration process when payers and providers cannot come to pricing agreements and turn to a third-party.
  • The plaintiffs allege the current methodology will financially harm providers and “deflate” payments they receive after rendering care to patients, according to the lawsuit filed in federal court in Texas.

Dive Insight:

The No Surprises Act has faced repeated legal challenges since its passage in 2020.

The federal legislation was a major win for consumers who found themselves at times stuck with hefty medical bills after being caught between provider and payer pricing disputes.

The law removes patients from the middle of disputes and established a process for payers and providers to settle issues through arbitration. After each side submits a price, arbiters select the one offer they think is most appropriate price for a service.

The lawsuits have argued that the direction given to these arbiters, which is spelled out in the rulemaking, unfairly favors insurers. The plaintiffs have also argued the rules deviate from Congressional intent.

At issue in these suits is the qualifying payment amount, or the median in-network rate for a specific service in a specific region.

In the latest suit, TMA argued there are certain aspects of calculating the QPA that artificially deflates the QPA.

“Calculating QPAs the way the agencies have required means that physicians have the scales tipped against them from the outset of negotiations. Shrouding these calculations in secrecy further disadvantages physicians, by preventing them from raising errors in QPA calculations to the agencies,” TMA President Gary Floyd said in a statement.

TMA won its first lawsuit over the implementation of the law and forced regulators to change the language in the final rule. The nixed language instructed arbiters that they “must begin with the presumption” that the QPA is the appropriate amount.

It’s this instruction that generated pushback from providers, who argued it set a ceiling on prices. A federal judge agreed and struck down that language in a February ruling.

TMA filed its second lawsuit in September, alleging that the final rule, drafted after the judge’s ruling, still unfairly benefits insurers by instructing arbiters to place a greater weight on the QPA.

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