A Texas federal judge ruled Monday that the surprise payment arbitration process unfairly favors insurers, dealing the latest blow to the sued No Surprise Act. heavy chanting.
Judge Jeremy D. Kernodle of the United States District Court for the Eastern District of Texas overturned some parts of a final rule issued by three federal agencies in August regarding the independent settlement process to settlement of payment disputes between insurance companies and out-of-network providers. Regulations instruct third-party arbitrators to consider both the insurance company’s network average or eligible payment amount and additional information when determining the correct payment for a property bill. doubt.
While the last rule “avoiding obvious presumptions in favor of (eligible payment amount)” is set by insurance companies, it “continues to put the thumbs up on the scale (amount of eligible payments). qualified payment) by requiring the arbitrators to begin with the (qualifying payment amount) Kernodle indicated in his award. It also “restricts arbitrators’ discretion by dictating how they may consider statutory factors,” he added.
Kernodle moved the regulation back to the Department of Health and Human Services to design new rules around the dispute resolution process, which may face additional legal challenges. Meanwhile, the backlog of lawsuits is growing as the federal government received 90,000 requests between April 15 and September 30.
The ruling was warmly received by providers including plaintiffs, the Texas Medical Association, which has filed four lawsuits challenging the federal government to implement the No Surprise Act. The initial lawsuit resulted in a ruling in favor of the association, confirming the association’s argument that an overemphasis was placed on qualifying payment amounts.
“This is an important next step after (Texas Medical Association) successfully challenged an interim final rule that skewed the (independent dispute resolution) process in favor of health programs. This decision is a huge win for patients and doctors. It is also a reminder that federal agencies must apply regulations consistent with the law,” said Dr. Gary Floyd, president of the association, in a statement.
Melinda Hatton, general counsel for the American Hospital Association, said in a statement that the court “precisely observed that the government’s final rule would tilt arbitrators in favor of the public prosecutors.” insurers, thereby inappropriately reducing payments to health care providers and threatening a patient’s ability to access care. “
A spokesperson for HHS said the agency is reviewing the ruling. The American Health Plan Insurance Trade Association did not immediately respond to a request for comment.
of the federal government The No Surprise Act, which went into effect in January 2022, is intended to protect patients from unexpected medical bills and ultimately reduce healthcare costs. The Congressional Budget Office estimates that in 2019, the law is expected to reduce health insurance premiums by up to 1%.
Some providers choose to remain out-of-network with insurance companies to maintain profitable balance billing policies. That leaves patients vulnerable when they seek urgent care or when they are treated by anesthesiologists, radiologists, or other ancillary providers at network facilities. net.
An iteration of the previous rule instructed arbitrators to begin deliberation on the assumption that an insurer’s average contracted in-network rate is an appropriate out-of-network rate. Kernodle ruled in February that that process was flawed, prompting the Centers for Medicare and Medicaid Services to update guidelines outlining the arbitration process.
Under the final rule issued in August, referees do not have to choose the offer closest to the average contract rate but should choose the best offer after considering that rate and other information.
The Texas Medical Association’s latest lawsuits against HHS allege that certain parts of the regulation falsified lower qualifying payments and that the administrative fees for dispute resolution were too high.
