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Tag: Texas Medical Association

Federal District Court to Hear TMA “No Surprises Act” Rules Lawsuit

Certain surprise billing law final rules unlawfully harm physicians and patients 

Originally published by Texas Medical Association on December 19, 2022.

On Tuesday, Dec. 20, 2022 the U.S. District Court for the Eastern District of Texas will hear arguments in the Texas Medical Association’s (TMA’s) second lawsuit challenging certain portions of the Aug. 26, 2022, final rules implementing the federal No Surprises Act (NSA). District Judge Jeremy D. Kernodle will preside. This hearing addresses the second of three TMA lawsuits against federal agencies related to rulemaking under the surprise-billing arbitration law.

At issue are the rules affecting how payment disputes are resolved in certain situations in which a patient receives care from a physician or provider who is out of the patient’s insurance plan’s network. The payment disputes occur between health insurers and physicians or providers; patients are not affected or included. TMA is arguing that the challenged provisions of the final rule deprive physicians and providers of the arbitration process the law intended.

“We are, once again, asking for the law to be followed as Congress intended, and for the challenged provisions to be invalidated. There should be a level playing field for physicians and health care providers in payment disputes after they’ve cared for patients,” said TMA President Gary W. Floyd, MD.

TMA’s concern is over a final rule published by the U.S. departments of Health and Human Services, Labor, and the Treasury. In both its Oct. 28, 2021, lawsuit and the lawsuit being heard Tuesday, TMA alleges that the agencies – when implementing the federal surprise billing independent dispute resolution processes – adopted rules that conflict with the law and skew results in favor of insurers. TMA believes these rules are skewed to the detriment of both physicians and the patients they serve. TMA seeks to promote patient access to quality care and guard against health insurer business practices that give patients fewer choices of affordable in-network physicians and threaten the sustainability of physician practices.

“The final rules unfairly advantage insurers by requiring arbitrators to give outsized weight or consideration to an opaque, insurer-calculated amount – called the qualifying payment amount – when choosing between an insurer’s offer and a physician’s offer in a payment dispute,” Dr. Floyd said. “This is unfair to physicians, providers, and the patients we care for, so we had to seek fairness.” The qualifying payment amount (QPA) is an amount that is supposed to be the median in-network rate under the law but is deflated based upon the federal agencies’ methodology.

TMA’s first lawsuit – which the association won at the district court level – alleged that in the rules governing federal arbitrations between insurers and physicians, the federal agencies unlawfully required arbitrators to “rebuttably presume” the bid closest to the QPA was the appropriate out-of-network rate. TMA argued requiring arbitrators to heavily weight figures created by insurance plans provided them an unfair advantage.

Despite the district court’s initial ruling, TMA is arguing the agencies now have doubled down by issuing a new final rule that replaces the earlier presumption with a new set of requirements that give health insurers the same advantage. 

Each of the challenged requirements in the federal agencies’ final rule unlawfully tie arbitrators’ hands and place an unmistakable “thumb on the scale for the [health plans’ QPA],” the complaint states, even though the law does not call the QPA the “primary” or “most important” factor, nor does it diminish the importance of any other factors in the law. The final rules, for example, require arbitrators to “first consider” the QPA.

TMA filed its third NSA-related lawsuit in November, challenging certain portions of the law’s July 2021 interim final rules. That TMA lawsuit focuses on four ways in which the rule unfairly deflates QPAs. TMA contends portions of the rule skew negotiations in favor of health insurers so strongly that health insurers will force physicians out of insurance networks and physicians will face significant practice viability challenges, struggling to keep their doors open in the wake of the pandemic.

As for Tuesday’s federal hearing, “TMA was hopeful the federal agencies would write final rules fair to everyone, especially after the federal district court ruled the agencies’ previously challenged rules were not lawful,” Dr. Floyd said. “Unfortunately, the federal agencies returned with a plan tipping scales in health plans’ favor.”

 (Dial-in information to listen to the Dec. 20 court hearing: (571) 353-2301; meeting ID: 158301863#.)

TMA is the largest state medical society in the nation, representing more than 56,000 physician and medical student members. It is located in Austin and has 110 component county medical societies around the state. TMA’s key objective since 1853 is to improve the health of all Texans.

TMA Seeks to Protect Patients’ Access to Care in New “No Surprises Act” Rules Lawsuit

Amid concerns about threats to patients’ access to physicians’ care, the Texas Medical Association (TMA) has filed a new lawsuit in the U.S. District Court for the Eastern District of Texas, challenging certain portions of the July 2021 interim final rules implementing the federal No Surprises Act (NSA).

This is the third lawsuit TMA has filed against federal agencies related to rulemaking under the law.

In its latest lawsuit, TMA is challenging certain parts of the rules that artificially deflate the “qualifying payment amount” or “QPA.” The QPA is an insurer-calculated amount that arbitrators are required to consider, among other factors, when deciding between the physician’s and the health insurer’s offer as the appropriate out-of-network rate in federal arbitrations. Under the law, the QPA is generally supposed to be the median in-network rate for the service provided by a physician in the same or similar specialty in the relevant geographic area. The challenging parts of the rule set forth a methodology for calculating QPAs that conflicts with how the NSA requires insurers to calculate QPAs. The lawsuit also challenges the lack of transparency around QPA calculations.

“TMA is concerned that these provisions unfairly disadvantage physicians in payment disputes with health insurers and will ultimately rob patients of access to physicians’ care,” said TMA President Gary W. Floyd, MD. “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 contends the challenged provisions of the rule skew negotiations in favor of health insurers so strongly that health insurers will force physicians out of insurance networks and physicians will face significant practice viability challenges, struggling to keep their doors open in the wake of the pandemic.

TMA’s lawsuit focuses on four ways in which the rule unfairly deflates the QPA. Those are that the rule:

  • Permits insurers to include “ghost rates” in their QPA calculations, which are contract rates with physicians and providers who don’t actually provide the health service in question. This unfairly lowers QPAs as there is little motivation for physicians or providers to negotiate rates for services they do not actually provide. For example, some of these “ghost rates” are $1, which clearly would not be reflective of market rates or the cost of providing care.
  • Permits insurers to include rates of physicians who are not in the same or similar specialty as the physicians involved in the payment dispute.
  • Requires insurers to use an amount other than the total payment in calculating a QPA when a contracted rate includes “risk sharing, bonus, or penalty, and other incentive-based and retrospective payments or payment adjustments.”
  • Permits self-insured group health plans to allow their third-party administrators to determine the QPA for the plan sponsor by calculating the median contracted rate using the contracted rates recognized by all self-insured group health plans administered by the third-party administrator. This allows self-insured plans to essentially opt into a lower QPA for payment disputes with physicians.

Physicians argue this unfair process is compounded by the opaque nature of QPA calculations and the heavy weighting of the QPA provided by the federal agencies’ final rules, the latter of which is the subject of a separate legal challenge by TMA.

“This all adds up to rigging the arbitrations against doctors in favor of health insurance companies, and to patients’ detriment,” said Dr. Floyd. “It’s setting up a race to the bottom, which will leave patients scrambling to get the care they need.”

TMA filed its second lawsuit in September challenging the law’s Aug. 26, 2022, final rules published by the U.S. Department of Health and Human Services, Labor, and the Treasury. In the September lawsuit, TMA alleges the final rules unfairly advantage health insurers by requiring arbitrators to give outsized weight or consideration to the QPA. The hearing on that lawsuit is scheduled for Dec. 20 in Tyler, Texas.

TMA’s first lawsuit – filed in 2021 – alleged that in the interim final rules governing arbitrations between insurers and physicians, the agencies unlawfully required arbitrators to “rebuttably presume” the offer closest to the QPA was the appropriate out-of-network rate. TMA won at the district court level, arguing that requiring arbitrators to heavily weigh figures created by insurance plans conflicted with the law and provided health insurers with an unfair advantage not intended by Congress. The federal government declined to pursue its appeal of this court loss.

TMA is the largest state medical society in the nation, representing more than 56,000 physicians and medical student members. It is located in Austin and has 110 component county medical societies around the state. TMA’s key objective since 1853 is to improve the health of all Texans.