The Effect of the No Surprises Act Court Decision on the Specialty of Anesthesia
SUMMARY: As of February 22, at least six lawsuits have been filed opposing certain regulations arising from the No Surprises Act. A recent ruling in one of these cases has just changed the legal landscape in favor of anesthesia providers.
Not every battle is a losing one. Every now and then, you win. That seems to be the case—at least for the time being—for anesthesia providers and others who have pushed back against federal rules implementing the No Surprises Act (NSA). Last week, a federal judge in Texas handed a major victory to healthcare providers in the ongoing legal wrangling over regulations that implement the Act. This is the first step in what we hope will be a needed correction in recently passed implementing regulations.
A Bit of Background
The original legislation allowed for an arbitration process to be triggered when an out-of-network (OON) provider took issue with the amount of insurance reimbursement. The NSA encouraged the arbiter to consider several factors before deciding on the final payment, including the physician's level of training and the patient's acuity level. The problem arose with the September 30, 2021 rules issued by the Centers for Medicare and Medicaid Services (CMS) that were designed to implement the statute. Many in the provider community asserted that these rules favored the insurance companies in the arbitration process. CMS' second Interim Final Rule relating to the NSA mandated that greater weight would be given to the Qualifying Payment Amount (QPA). The QPA is calculated by the payer as the median contracted amount for the service in question within a given geographical area. Providers complained that this would simply incentivize insurers to lower their rates for in-network services. Provider groups would be faced with a choice of either accepting lower contracted rates or be forced out of network—where they would again be subject to the reduced QPA rate. Indeed, we have already seen at least one major payer resort to this tactic in recent months.
Healthcare providers mobilized to address the inequity in the independent dispute resolution (IDR) process. You will recall that the American Hospital Association and American Medical Association filed an action this past December, under the assertion that the Biden Administration rule "places a heavy thumb on the scale of an independent dispute resolution process, unfairly benefiting commercial health insurance companies." That action is being considered in the U.S. District Court for the District of Columbia. In fact, there are six lawsuits listed below that address parts of the interim final rule. Specifically, the lawsuits resist the requirement that IDR entities assume that the QPA—the median contracted rate—is the correct out-of-network payment amount. Activity on these cases can be tracked on the Affordable Care Litigation website.
1.Texas Medical Association v. U.S. Department of Health and Human Services
2.Association of Air Medical Services v. HHS
3.American Medical Association v. HHS
4.American Society of Anesthesiologists v. HHS
5.Georgia College of Emergency Physicians v. HHS
6.Haller v. HHS
The Court Steps in
One of these legal actions has given the provider community the redress it has been seeking. On February 23, U.S. District Court Judge Jeremy Kernodle, serving the Eastern District of Texas, struck down what the plaintiffs held as the most onerous parts of the federal government's surprise medical billing regulations. In an action brought by the Texas Medical Association, the judge overturned the CMS arbitration process for determining payment for services by OON providers, stating that the regulations conflict with the text of the NSA.
In essence, the judge ruled against the Sept. 30, 2021 rule that directed arbiters under the IDR process to presume that the median in-network rate is the appropriate out-of-network rate. In his opinion, Judge Kernodle wrote: "The Court determines that the Act unambiguously establishes the framework for deciding payment disputes and concludes that the Rule conflicts with the statutory text." According to multiple legal sources, the Texas court's action is effective "throughout the country"—at least until another court of equal or higher standing rules differently.
So, here is the takeaway: while the median contracted amount has been removed as the primary determining factor in the arbitration process, the rest of the NSA remains in place, along with patient protections against surprise medical bills. We will keep you updated as more developments arise. In the meantime, please feel free to reach out to your account executive if you have further questions on this issue, or you can contact us directly at info@anesthesiallc.com.
With best wishes,
Tony Mira
President and CEO