Patient Support & Advocacy

Why AMA backs Texas doctors’ lawsuit on No Surprises Act provision

Andis Robeznieks , Senior News Writer

What’s the news: The AMA and the American Hospital Association (AHA) support a Texas Medical Association (TMA) lawsuit challenging the Biden administration’s final rule implementing the independent-dispute resolution process created by Congress and contained in the No Surprises Act.

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“Hospitals and doctors strongly believe that no patient should fear receiving a surprise medical bill and that patients should be kept out of the middle of any billing disputes between providers and commercial health insurance companies,” says a joint statement from the AMA and AHA. The organizations’ focus continues to be on ensuring that the independent dispute resolution process between health plans and physicians (or hospitals) outlined in the statute is implemented fairly by the Administration.

The two associations said they plan to file an amicus brief supporting the TMA lawsuit (PDF), which was filed in the U.S. District Court the Eastern District of Texas and names as plaintiffs the U.S. departments of Labor, Treasury, and Health and Human Services, along with the secretaries who lead each department.

The AMA and AHA also noted that the amicus brief will explain how the final rule departs from congressional intent—just as the September 2021 interim final rule did.

“The Texas court previously held that the interim final rule impermissibly rewrote clear statutory terms by placing a thumb on the scale in favor of commercial insurers,” the AMA-AHA statement says. “The final rule suffers from the same problems.”

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Why it’s important: The No Surprises Act (PDF) was signed into law in 2020 as part of the Consolidated Appropriations Act of 2021.

It was intended to protect patients from unexpected medical expenses when they receive emergency care at facilities outside their insurance network or from out-of-network physicians or other nonphysician clinicians at an in-network hospital, ambulatory surgery center or freestanding emergency department.

The AMA, AHA and TMA initiated legal actions (PDF) when the administration issued interim rules governing the law’s independent dispute resolution process that didn’t match the law Congress passed and were skewed in favor of insurance companies.

These legal actions were not aimed at the No Surprises Act’s provisions protecting patients from unexpected out-of-network medical expenses. The AMA, AHA and TMA have said those provisions should be allowed to stand.

“As was the case with the previous suit, the AHA and AMA want to see the law’s core patient protections move forward and seek only to bring the regulations in line with the law,” says their joint statement. “We look forward to supporting the Texas Medical Association’s efforts to restore the balanced, patient-friendly approach that Congress passed and the AHA and AMA supported.”

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The No Surprises Act is a big challenge for doctors—and states

The target of present and previous lawsuits is a provision directing arbitrators to focus their decision on one factor: the median rate paid to in-network physicians, hospitals and others—called the qualifying payment amount (QPA). The regulators, not Congress, have directed arbitrators to use the QPA as the presumptive payment and limit when and how other factors come into play.

“During the legislative process, insurers lobbied Congress to use the QPA as a benchmark for health care provider reimbursement,” the TMA lawsuit states. “But after extensive negotiation and debate, Congress rejected those proposals and instead created a process in which an independent arbitrator would consider all factors bearing on the appropriate out-of-network rate—without imposing any presumptions or otherwise prioritizing one factor over the others.”

Learn more: Read how the AMA advocates to protect patients from out-of-network surprise billing, and find out about AMA judicial advocacy on surprise billing and other issues.

The AMA offers comprehensive guidance to understanding implementation of the No Surprises Act, including a summary of the August final rule (PDF) and a toolkit for physicians on disputing out-of-network payments (PDF) using the law.