- The Department of Justice intends to appeal a federal judge's ruling that sided with providers over a challenge to the surprise billing rule, according to a Friday filing from the DOJ in the Eastern District of Texas.
- The Texas Medical Association sued the federal government over its interpretation of the No Surprises Act, arguing the rule leans too heavily on one factor arbiters are supposed to consider when resolving payment disputes between payers and providers.
- Federal Judge Jeremy Kernodle's February ruling said nothing in the bill passed by Congress instructs arbiters to "weigh any one factor ... more heavily than the others," indicating the rule conflicts with the bill.
The No Surprises Act was meant to solve one of healthcare's perennial problems: unexpected out-of-network bills that can be costly for patients.
But providers have balked at how the federal government interpreted the bill in the rulemaking process and have filed numerous lawsuits over the issue, including one from the American Hospital Association and American Medical Association.
The main aim of the bill was to remove patients caught in the middle of payer and provider disputes over payment. To help achieve that goal, under the law, providers and payers can turn to a baseball-style arbitration process when they can't come to terms.
In arbitration, a third-party will pick the payment amount after considering certain information.
The rule in question instructed arbiters to start with the presumption that the qualifying payment amount, or median in-network rate, is the appropriate amount.
That language caused pushback from providers, who argue it unfairly tips the scales in favor of insurers. The federal judge in Texas sided with providers and said the rule conflicts with the law Congress passed.
The decision forced regulators to remove the presumption language in revised guidance for arbiters. That may be the practical effect of the judge's decision, Katie Keith, a lawyer at Georgetown University said, but added, "I read his decision to be a little bit broader where he sort of suggested that the agencies could never give guidance factors."
Keith characterized the appeal as expected when asked about whether the appeal is insight into whether regulators will retain or abandon the presumption language in the upcoming final rule.