Surprise Billing Rules Garner More Legal Action
By Amy Lynn Sorrel

Pressure is mounting on federal authorities with multiple legal actions now aiming to stop what physicians and hospitals say is an unfair arbitration process outlined in rules implementing the No Surprises Act, legislation passed in 2020 to address surprise medical bills. 

The Texas Medical Association on Oct. 28 filed the first lawsuit saying federal rulemakers failed to follow clear direction from Congress to create a fair and balanced dispute resolution process between physicians and health plans when deciding payment for out-of-network care. On Dec. 9, the American Medical Association and American Hospital Association followed suit with similar litigation saying the rules give health plans an unfair advantage that could jeopardize access to care if physician services are undervalued. TMA has since asked the U.S. District Court in Tyler to decide its lawsuit as soon as possible without going to trial.  The hearing on that motion for summary judgment is set for Feb. 4. 

Numerous state and national medical specialty organizations and health care entities have joined the crusade in the form of friend-of-the-court briefs supporting TMA's litigation, or through other legal actions of their own.*

In addition, a bipartisan group of more than 150 congressional lawmakers have urged the U.S. departments of Health and Human Services, Labor, and Treasury to amend the federal rules “to align the law’s implementation with the legislation Congress passed.” A group of U.S. senators recently proffered similar support.

The No Surprises Act took effect in January with the first arbitrations expected to start in March. The physician groups say the lawsuits challenge a narrow provision of the implementing rules without jeopardizing the protections meant to remove patients from payment disagreements. 

“Congress worked hard to pass a law that protects patients from surprise medical bills, and Texas physicians are very supportive of the patient protection intent of that law. However, we are deeply concerned that the statutory process for settling billing disputes between physicians and insurance companies has been significantly altered, skewing the process in favor of insurance companies,” TMA President E. Linda Villarreal, MD, said. 

According to the lawsuits, federal rules allow the independent, third-party arbiter to default to a health plan’s determination of the "qualifying payment amount" (QPA) as an appropriate payment amount for out-of-network care, when the law intended for the arbiter to take into account several factors, such as prior contracted rates for the medical service, the physician’s training and experience, and case complexity, among others. The QPA is a metric calculated solely by health insurance companies.

Failing to follow the No Surprises Act’s billing dispute approach will make it harder for patients to access care by driving down payment rates to physicians and encouraging insurance companies to continue narrowing their networks, the physician groups warn. 

“Congress made clear that an arbiter must consider a multitude of factors before resolving a dispute under the No Surprises Act, in the interest of fairness. Federal regulators are abandoning the law and giving insurance companies [a gift]. If the government is allowed to implement this unfair rule, the very health care system that patients now rely upon will be threatened, while they have less access to physicians,” Dr. Villarreal said.  

“When insurers allow fewer and fewer physicians to join their networks, patients end up with less choice. It will be difficult for small physician groups to keep caring for patients.” 

AMA President Gerald E. Harmon, MD, echoed those concerns: “Congress established important patient protections against unanticipated medical bills in the No Surprises Act, and physicians were a critical part of the legislative solution. 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. Our legal challenge urges regulators to ensure there is a fair and meaningful process to resolve disputes between health care providers and insurance companies.” 

The federal law applies to certain surprise bills that are not regulated by Texas’ law. That law governs state-regulated health plans and state employee or teacher retirement systems’ plans to include self-funded ERISA plans. Texas’ surprise billing law went into effect Jan. 1, 2020. Most of the No Surprises Act’s provisions took effect Jan. 1, 2022.  

TMA is staying abreast of the latest information to develop practice resources that help you navigate the requirements. In the meantime, read Texas Medicine Today for updates and check out these resources.  

*The Physicians Advocacy Institute (PAI) – joined by 13 state medical societies with supporting declarations from 18 specialty societies – filed a friend-of-the-court brief on Dec. 17 supporting TMA’s motion for summary judgment with the U.S. District Court. Also filing in support were the Emergency Department Practice Management Association, Texas College of Emergency Physicians, and Virginia College of Emergency Physicians; the Medical Association of Georgia, ApolloMD Business Services, Wellstar Health System, and the Georgia College of Emergency Physicians; and Action for Health. The American Society of Anesthesiologists, American College of Emergency Physicians, and American College of Radiology jointly filed their own lawsuit, as did the Association of Air Medical Services. PAI, with TMA and nearly two dozen other state and national medical associations, also submitted a friend-of-the-court brief supporting the AMA/AHA lawsuit.  

Last Updated On

February 10, 2023

Originally Published On

December 15, 2021

Amy Lynn Sorrel

Associate Vice President, Editorial Strategy & Programming
Division of Communications and Marketing

(512) 370-1384
Amy Sorrel

Amy Lynn Sorrel has covered health care policy for nearly 20 years. She got her start in Chicago after earning her master’s degree in journalism from Northwestern University and went on to cover health care as an award-winning writer for the American Medical Association, and as an associate editor and managing editor at TMA. Amy is also passionate about health in general as a cancer survivor, avid athlete, traveler, and cook. She grew up in California and now lives in Austin with her Aggie husband and daughter.

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