Dive Brief:
- The Texas Medical Association will present its case challenging federal regulators’ implementation of the surprise billing ban before District Court Judge Jeremy Kernodle in Texas on Tuesday.
- The group that represents Texas physicians and medical students wants a key piece of the rulemaking tossed out. The group alleges that the mechanism for resolving payment disputes between insurers and providers during the arbitration process will unfairly benefit insurers.
- Federal regulators disagree and argue that the dispute resolution process does not give greater weight to any one factor that would unfairly advantage either side.
Dive Insight:
This is the second time the Texas Medical Association will argue in front of Kernodle over implementation of the No Surprises Act that banned surprise billing.
Kernodle ruled in favor of the Texas Medical Association in February over a similar but separate case.
The central issue in both cases is how much arbiters should rely on the qualified payment amount, or the median in-network rate, when resolving pricing disputes.
The No Surprises Act was a win for consumers who found themselves stuck with hefty medical bills after being caught between provider and payer pricing disputes. Patients were sometimes left with the remaining balance of a medical bill when a provider was out-of-network and the insurer would only pay some — or none — of the bill. Patients were sometimes surprised by these bills after going to an in-network facility and unknowingly treated by an out-of-network clinician.
The law set up a process for how payers and providers could resolve disputes by allowing parties to enter baseball-style arbitration. Unable to come to pricing terms, each side submits an offer to a third-party, known as an arbiter, who is then supposed to select one offer.
Regulators’ guidance on what arbiters should consider before selecting one offer has generated the most pushback from providers.
In a draft rule, regulators said arbiters should start with the “presumption” that the QPA, or the median in-network rate, is the correct amount.
Providers argued that presumption effectively sets a ceiling on prices. A federal judge agreed with the Texas Medical Association and struck down that language in a February ruling.
It forced regulators to nix the language in the final rule.
Even though regulators removed the “presumption” language in the amended rule, TMA filed suit again arguing the final version has the same effect.
The final rule requires arbiters to evaluate the credibility of the information presented to them — except the QPA — and tells arbiters to dismiss information that is not credible, TMA said.
Regulators “did not grapple with the reality that, in most cases, the QPA will be an unaudited number calculated by the insurer,” TMA argued.
Regulators disagree.
There is no mention in the final rule that arbiters must defer to the QPA, regulators said, arguing TMA and its co-plaintiffs, including a Texas physician and Texas hospital, lack standing in the case.
The final rule instructs arbiters to pick “the offer that best represents the value of the item or service, regardless of whether that offer happens to be closest to the qualifying payment amount,” regulators argue.
If Kernodle rules in favor of TMA again, it may halt the arbitration process, Zachary Baron, associate director of health policy and the law initiative at the O’Neill Institute at Georgetown, said.
“It is unclear what would happen to disputes that are currently in the midst of the arbitration process, they may need to be paused and re-evaluated. Disputes that are in the queue for arbitrators could also be paused until further guidance is provided,” Baron said.