A Win for Doctors in No Surprises Act Struggle

In a move that may signal a shift in physician bargaining power under the No Surprises Act, a U.S. district court sided Wednesday with the Texas Medical Association, which argued that the federal government’s interpretation didn’t align with the original language of the Act, and favored health insurers.

It was seen as a victory for doctors in emergency medicine who fear cuts to their pay would be a byproduct of federal rules around the Act, which prohibits surprise billing for patients and outlines a process for resolving payment disputes between insurers and physicians.

Diana Fite, MD, the previous president of the Texas Medical Association and a practicing emergency physician in Houston, said that patients “shouldn’t have to have surprise billing extra on top of [premiums and co-pays]. We’re good with that. But we need to be paid decently for what’s done.”

A U.S. district court judge granted the association’s motion for summary judgement (a move that resolves lawsuits when no trial is needed), writing that the Department of Health and Human Services (HHS)’s regulatory interpretation of the No Surprises Act did not align with the law as written, giving the median network rate, or qualifying payment amount (QPA, a number calculated by insurers), priority over other factors that contribute to the cost of a health service.

“Rather than having an arbitrator consider all statutory factors as provided by the Act, Plaintiffs argue, the Rule puts a substantial thumb on the scale in favor of the QPA,” U.S. District Court Judge Jeremy Kernodle wrote in the memorandum opinion and order, adding later that “the Act nowhere states that the QPA is the ‘primary’ or ‘most important’ factor.”

The original No Surprises Act held that independent arbitrators settling out-of-network pricing disputes between providers and insurers should consider the QPA as just one of a number of factors influencing pricing, like physician experience, historical contracted rates, and medical complexity.

“That’s a definite win for providers and physicians,” wrote Stephen Parente, PhD, MPH, a health economist and professor at the University of Minnesota, in an email to MedPage Today.

But it’s still unclear if the government will appeal the decision and escalate it to higher courts. “If the feds do not escalate, the case might be a template for other state medical associations,” Parente said. “If the feds do escalate, [they] will tacitly be with insurers in support.” He added that if there is no escalation, the government might legislate a revision to the regulatory language, removing the QPA’s position of privilege.

Fite agreed: “I’m hopeful that maybe this will be the call to the federal government that, indeed, they have to act.”

Meanwhile, similar lawsuits against HHS and other federal agencies continue, in Georgia, Illinois, New York, and Washington, D.C. These areas must still find a way to reach out-of-network payment agreements as the fight over regulation rages.

Some states, like Texas, have their own surprise billing laws. “The question is, does the federal law supersede the state law?” said Glenn Melnick, PhD, of the University of Southern California Sol Price School of Public Policy in Los Angeles.

Gerald Harmon, MD, president of the American Medical Association, which is part of an ongoing lawsuit, told MedPage Today in an emailed statement, “The AMA supports the court’s proper reading of the statute and remedy to the rule’s flawed interpretation of the independent dispute resolution process passed by Congress as a confirmation of the goals of the No Surprise Act and the patient protections it contains.”