A federal court judge tossed a New York surgeon’s lawsuit alleging that the No Surprises Act was unconstitutional and infringed upon providers’ right to a jury trial and right to due process.
U.S. District Judge Ann Donnelly issued a ruling Wednesday in the U.S. District Court for the Eastern District of New York that denied the plaintiffs’ motion for a preliminary injunction and granted the federal government’s request that the case be dismissed.
The plaintiffs, Daniel Haller, M.D., and his private practice, had filed a complaint on Dec. 31, just a day before the surprise billing legislation went into effect nationwide.
The No Surprises Act banned, in certain cases, billing patients for balances remaining after out-of-network care and called for the creation of an arbitration process for providers and payers to settle disputes over the charges. Under the independent dispute resolution process, the two parties each put in for a preferred amount with a third-party arbitrator choosing one of the options.
Haller said in the complaint that the law deprives providers of their property interest by “prohibiting physicians from recovering the balance of the fair value of their services from their patients."
Additionally, the law requires parties to submit their private billing dispute to an arbitration process “to which neither party agreed, and which would otherwise enjoy the right to a jury trial under the Seventh Amendment,” plaintiffs wrote.
Donnelly wrote in the ruling that the plaintiffs’ arguments did not meet the high bar necessary to grant injunctive relief in respect to demonstrating irreparable harm, likely success of their claims or public interest weighing in favor of an injunction.
The judge also ruled that Congress created a new public right with the law and, as a result, does not infringe upon the preserved right to a jury trial outlined in the Seventh Amendment.
Further, Donnelly disagreed with Haller’s claim that the surprise billing law unconstitutionally took his property interest, in part because his practice had yet to undergo an independent dispute resolution process and so was making “hypothetical” claims.
The judge dismissed Haller’s Seventh Amendment and takings claims with prejudice and dismissed the “unripe” due process claim for lack of subject matter jurisdiction without prejudice.
Most industry resistance to the No Surprises Act has largely centered on the arbitration process, which providers have argued is structured to favor payers by instructing arbiters to base their decision on the median in-network payment within the local market.
In February, a judge sided with the Texas Medical Association that the Department of Health and Human Services’ median in-network payment approach conflicted with Congress’ original intent. The administration filed an appeal to that ruling within the following months.