Provider groups push court to press pause on controversial surprise billing rule

A collection of provider groups argue that the federal government is trying to make policy via the courts to defend the controversial arbitration process in the surprise billing rule.

The American Medical Association, American Hospital Association and several other provider groups wrote in a legal filing Tuesday that a federal judge needs to quickly issue a stay of the final rule that governs the arbitration process for handling out-of-network charges. The groups pushed back over the arguments that the administration delivered last month.

“In their legal filings, the agencies are primarily making policy arguments for their preferred approach. But policymaking is Congress’ role, and their intentions here are very clear in the text and history of the No Surprises Act,” said the AHA and AMA in a statement.

The Biden administration issued two final rules last year that implemented the No Surprises Act, which bans balance billing and creates an arbitration process for providers and payers to settle out-of-network charge disputes. The law called for an independent arbiter to weigh amounts offered by both the provider and payer and choose one.

Providers largely did not have any issue with the first rule that bans balance billing but have cried foul over the setup for the arbitration process in the second final rule. In that regulation, the federal agencies say the arbiter should put preferential weight on which out-of-network charge is closest to a qualifying payment amount, which is the geographic rate for such a charge.

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Provider groups charged that the rule goes against the intent of the federal law, which forbade the use of a benchmark rate when determining the correct out-of-network charge.

But the administration argues in its legal response filed last month that the intent of the rule is only to sequence the decision-making for the arbiter, which can factor in additional circumstances when making its final ruling.

The groups charge that the text of the rule contradicts this argument, saying that the agencies use the word “presumption” seventeen times in the regulation’s preamble. It said that the term likely means that the qualifying payment amount isn’t just a starting point but also an “act or instance of taking something to be true,” the lawsuit said.

They also argue that the barrier to choosing an amount based on something other than the benchmark is very high.

Groups say that Congress specifically called for a baseball-style arbitration where both parties issue one amount and an arbiter must pick one. But the way the process is crafted by the Biden administration, an insurer is incentivized to go with the qualifying payment amount, which the arbiter will be likely to choose, the filing said.

Providers, on the other hand, will face long odds if they choose an amount different from the qualifying payment amount.

“This is not the system enacted by Congress,” the filing added. “Congress instead adopted a process designed to rely on the parties, while encouraging them to moderate their offers. It is not for the departments to substitute their judgment for Congress’.”