On August 24, 2023, the U.S. District Court for the Eastern District of Texas issued an opinion and order in Texas Medical Association, et al. v. United States Department of Health and Human Services(“HHS”)(“TMA III”). TMA III challenged certain portions of the July 2021 No Surprises Act (“NSA”) interim final rules proposed by the U.S. Departments of Health and Human Services, Labor, and Treasury, along with the Office of Personnel Management (the “Departments”).  In a decision that significantly levels the field for providers, the District Court ruled in part for the provider plaintiffs and in part for the Government in the TMA III ruling. 

The Court agreed with the provider plaintiffs that certain regulations governing the calculation of the Qualifying Payment Amount (“QPA”) conflict with the Independent Dispute Resolution (“IDR”) process in the underlying NSA legislation, and therefore must be revisited. 

The Centers for Medicare & Medicaid Services (“CMS”) responded to the ruling by temporarily suspending all Federal (i.e., IDR) process operations until the Departments can provide additional instructions, but has encouraged parties to continue to engage in open negotiations.  The TMA III decision does not directly impact state surprise billing dispute resolution processes.

This is not the first NSA challenge by these provider plaintiffs, nor their first win. Prior challenges required the Departments to make various changes to the IDR process, with additional changes pending due to a recent prior decision from the same Texas Court addressing claims batching rules and the fee charged for pursuing an IDR process. As has been held in previous NSA decisions by this Court, prioritizing the QPA favors insurers at the expense of providers because QPA is typically the median rate an insurer would have paid for the service if provided by an in-network provider or facility. Requiring changes to regulations for calculating the QPA likely makes this TMA III decision the most significant yet in terms of rebalancing the IDR process between payors and providers / facilities. We anticipate that resulting administrative actions could have far reaching effects on both how the IDR process will go forward and how the NSA is being implemented more broadly.

Of note, the Court did leave in place a challenged regulation regarding the calculation of QPA for air ambulance services based on census divisions in instances of insufficient information. Earlier this month, the U.S. District Court for the District of Columbia sided with the Departments and upheld the method the Government uses to calculate QPA for air ambulance services, in the case of Association of Air Medical Services v. HHS.

As we track the Departments’ responses to these two key decisions, we will provide a more in-depth analysis of the Courts’ holdings, the likely impact on general NSA implementation, and, more specifically, how the IDR process will likely change going forward.

Back to Health Law Advisor Blog

Search This Blog

Blog Editors

Authors

Related Services

Topics

Archives

Jump to Page

Subscribe

Sign up to receive an email notification when new Health Law Advisor posts are published:

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.