Although federal regulators are appealing a recent court ruling in one of the Texas Medical Association’s four lawsuits regarding their implementation of the No Surprises Act, TMA already can declare a partial victory – via footnote.
The No Surprises Act, which took effect in 2022, established a federal independent dispute resolution (IDR) process through which clinicians can dispute health plans’ initial payment for certain out-of-network care.
TMA’s third lawsuit challenged regulations setting a methodology payers use to calculate the qualifying payment amount (QPA) that arbitrators consider, along with certain other statutory factors, when resolving such disputes, asserting that it skewed the process in payers’ favor.
Specifically, TMA argued that the regulations allowed payers to unlawfully deflate QPAs by:
- Including “ghost rates” – or contract rates with physicians and other health professionals who don’t provide the particular service;
- Including rates of physicians who are not in the same or similar specialty as the physicians involved in the dispute;
- Requiring payers to use an amount other than the total payment in calculating a QPA when a contracted rate includes contingent payments, such as risk sharing or incentive-based bonuses; and
- Permitting self-insured plans to essentially opt in to a lower QPA for payment disputes with physicians by using the rates of other self-insured plans.
In August 2023, the U.S. District Court for the Eastern District of Texas struck down a large portion of the regulations challenged by TMA, ruling that they conflicted with the plain language of the law.
Federal regulators – including the U.S. departments of Health and Human Services, Labor, and the Treasury – have appealed this ruling. But, in a Jan. 12 legal brief, the departments capitulated to two of TMA’s four challenges in a footnote.
The departments are only appealing for the inclusion of ghost rates and the exclusion of certain amounts when a contracted rate includes contingent payments, such as bonus and incentive payments.
“The district court concluded that these provisions, and certain related guidance, were inconsistent with the No Surprises Act,” the brief states. “The government does not challenge those holdings on appeal.”
In response, TMA’s outside legal counsel has sent letters to the federal IDR entities, urging them to request that:
- Payers indicate whether the submitted QPA was calculated using any out-of-specialty rates; and
- Self-funded plans indicate whether they opted to have their third-party administrator calculate their QPAs using the rates of other plans.
“The Departments’ decision impacts how you execute your duties, and in particular, the weight that should be given to QPAs affected by the rulings the Departments declined to appeal,” the letter states.
The departments’ brief is just one of several recent developments related to the No Surprises Act, whose implementation remains fluid and is being closely monitored by TMA.
For instance, the departments announced on Feb. 16 that certain deadline extensions related to the federal IDR process will expire on March 14. Around the same time, the Centers for Medicare & Medicaid Services released data on disputes initiated in the first half of 2023, which underscore TMA’s legal advocacy.
For more news and information regarding TMA’s efforts, check out TMA’s Surprise Medical Bills webpage.
Emma Freer
Associate Editor
(512) 370-1383