Federal Judge Rules in Doctors’ Favor in No Surprises Act

February 24, 2022

On February 23, a federal judge ruled in favor of the Texas Medical Association (TMA) in striking down portions of the regulations that implement the Biden administration’s No Surprises Act (NSA). This is a significant victory for physicians and physician groups nationwide who expressed concern over the skewed advantage that the regulations gave to insurers. 

Congress passed the NSA in an effort to protect patients from unexpected out-of-network bills. However, many have raised concerns about the regulations that were passed to implement the NSA. The regulations, which were issued on September 30, employ an Independent Dispute Resolution (IDR) process that can be used to settle out-of-network payment disputes between payers and physicians and other healthcare providers in surprise billing situations. 

There has been much opposition to this portion of the regulations, which directs an IDR entity to presume that the qualifying payment amount (QPA) is the appropriate out-of-network rate and to select the reimbursement offer closest to the QPA. In its lawsuit, TMA argued that the regulation significantly undermines the fairness and independence of the IDR process by requiring IDR entities to make their decisions based on the “qualifying payment amount (QPA)” unless the provider can prove otherwise. This presumption is contrary to the NSA as Congress intended, which instructed an IDR entity to give equal weight to other factors such as the training of the physician. 

This provision of the regulation lessens insurers’ incentives for negotiating fair contracts and would likely lead to damaging payment cuts. In response to the February 23 decision, the TMA stated that the ruling “is an important step towards restoring the fair and balanced process that Congress enacted to resolve surprise billing disputes between health insurers and physicians.”