Dive Brief:
- The Texas Medical Association filed a fourth lawsuit over the No Surprise Act on Monday, this time focusing on boosted fees both parties must pay for an independent arbritration process to solve billing disputes between providers and payers.
- The CMS increased the administrative fee for arbitration, or IDR, processes — from $50 to $350 — at the start of the year. The TMA alleges the change will “not only will make the process significantly more expensive for all IDR participants but will make it cost-prohibitive for many providers to access IDR at all,” according to the suit.
- The suit also challenges the laws’ restrictions on batching claims, which allows arbritration processes only on claims with the same service code, requiring providers to go through a separate payment dispute process for each claim related to an individual’s care episode, according to the suit.
Dive Insight:
This is the latest legal challenge from the Texas Medical Association in its extended fight against arbritration provisions stipulated in the No Surprise Act.
The federal law, which went into effect in January 2022, aims to protect consumers from pricey medical bills resulting from disputes between providers and payers, particularly when patients unknowingly receive care from an out-of-network provider at in-network facility.
It spells out a process to resolve payment disputes through a third-party arbiter that decides the pricing terms, though guidance on what factors that arbiters should consider before choosing an offer has been a key point of contention in legal challenges.
In the latest suit, TMA alleges the arbitration process favors insurers due to boosted administrative fees, which can hamper a provider’s ability to obtain fair and reasonable reimbursement.
If the difference between the amount offered by the insurer and amount the provider believes they are owed is $350 or less, “it will be economically infeasible for the provider to initiate IDR. Even if the provider won, it would come out behind,” the lawsuit states.
Providers who bill small value claims, like radiology, will be particularly hurt, because most claims billed are less than $350, according to the suit.
The suit lists two radiology groups as plaintiffs: the Texas Radiological Society and Houston Radiology Associated.
The restrictions on batching claims is also pertinent to radiologists, whose patients often receive several scans or X-rays during a single emergency department visit. Currently, they must submit each claim for separate arbritration disputes.
This is the latest lawsuit from the TMA in a string of suits over the past year.
The association first filed suit over the law in February 2022, claiming the dispute process favored payers because the final rule gave too much weight to the qualifying payment amount, or median-in-network insurance rate, as the appropriate payment for providers.
The law allows arbiters to consider a variety of information like a provider’s level of training and a patient’s acuity level, though the CMS emphasized arbiters to begin with the presumption that the qualifying payment amount was the appropriate payment amount for providers.
Federal Judge Jeremy Kernodle for the eastern district of Texas ruled in favor of TMA’s first lawsuit, tossing out part of the dispute resolution process in the No Surprises Act. Kernodle argued that nothing in the law instructed arbiters to “weigh any one factor ... more heavily than the others.”
The ruling forced federal regulators to nix the language in the final rule.
However, TMA sued again in September 2022, alleging that the final rule still favored insurers over providers in payment disputes. The lawsuit is still ongoing, although they presented their case in front of Kernodle in December.
The TMA then sued for a third time in December 2022, this time challenging the methodology for calculating payments in the arbitration process. The association argued that certain aspects of calculating the qualifying payment amount artificially deflate the amount of money that providers receive.
