Texas Medical Association Welcomes New Court Ruling in NSA Lawsuit

U.S. District Court for the Eastern District of Texas
U.S. District Court for the Eastern District of Texas

Statement by Rick W. Snyder II, MD, Texas Medical Association (TMA) president, in response to the ruling by the U.S. District Court for the Eastern District of Texas regarding TMA’s third No Surprises Act (NSA) lawsuit. TMA III challenged certain portions of the July 2021 interim final rules proposed by the U.S. Departments of Health and Human Services, Labor, and the Treasury, along with the Office of Personnel Management, implementing the federal NSA that artificially deflate the “qualifying payment amount” or “QPA.” The QPA is an insurer-calculated amount that arbitrators are required to consider – among other factors – when deciding between the physician’s and the health insurer’s offer as the appropriate out-of-network rate in federal arbitrations.

Generally, the NSA aims to limit the amount an insured patient would pay for emergency care furnished by an out-of-network physician or provider and for certain nonemergency services provided by an out-of-network physician or provider at an in-network health care facility. At issue are rules governing the arbitration process in payment disputes between physicians and health insurers in those instances.

“TMA is pleased a federal court has once again agreed with medicine in nearly all our complaints against the federal agencies’ unfair July 2021 rules pertaining to implementation of the federal No Surprises Act surprise-billing law.

“TMA appreciates that the court concurs that the challenged provisions conflict with the law. These provisions unfairly disadvantaged physicians in payment disputes with health insurers, ultimately robbing our patients of access to physicians’ care. Calculating QPAs the way the agencies required meant physicians had the scales tipped against them from the outset of negotiations.

“Permitting the inclusion of ‘ghost rates’ in QPA calculations and rates of physicians who do not practice in the specialty in question – as well as the other provisions in the rules – imbalanced arbitration discussions in health plans’ favor, against physicians.

“While the court disagreed with TMA regarding disclosure requirements in the rules, we remain pleased with the overall outcome. Yesterday’s decision regarding the unfair and unlawful portions of the departments’ July 2021 interim final rule is critical to implementing the law as intended by Congress.

“The federal agencies have work to do to revise their regulations to come into compliance with the court’s decision. TMA will remain vigilant to ensure the federal government implements the NSA in a manner that is lawful and preserves patient access to care, and physician practice viability.”

TMA filed this lawsuit in November 2022.

TMA’s first lawsuit challenging the No Surprises Act rules – filed in October 2021, and which TMA won at the federal district court level – alleged that in the interim final rules governing arbitrations between insurers and physicians, the agencies unlawfully required arbitrators to “rebuttably presume” the offer closest to the qualifying payment amount (QPA) was the appropriate out-of-network rate.

TMA filed its second lawsuit in September 2022 challenging the NSA’s August 2022 final rules published by the federal agencies, alleging the final rules unfairly advantage health insurers by requiring arbitrators to give outsized weight or consideration to the QPA. The court ruled in TMA’s favor on that case in January 2023. This lawsuit is currently being appealed by the federal government to the 5th U.S. Circuit Court of Appeals.

The court ruled largely in TMA’s favor earlier this month in the association’s fourth NSA lawsuit, which TMA filed in January 2023.

TMA is the largest state medical society in the nation, representing more than 57,000 physician and medical student members. It is located in Austin and has 110 component county medical societies around the state. TMA’s key objective since 1853 is to improve the health of all Texans.