The Texas Medical Association (TMA) has launched a new legal challenge to a federal surprise billing rule, arguing administrative fees charged to providers are too high.
The lawsuit, filed Tuesday in the U.S. District Court for the Eastern District of Texas, is the fourth legal challenge TMA has lobbed over the implementation of the No Surprises Act, which bans surprise medical bills and calls for payers and providers to go into arbitration for settling out-of-network charges. At stake is an administrative fee providers and payers must pay to start arbitration.
“Why would doctors and providers pay the $350 nonrefundable administrative fee to arbitrate a $200 or so payment dispute with a health insurer?” said TMA President Gary Floyd, M.D., in a statement. “The fees deny physicians the ability to formally seek fair payment for taking care of our patients, and that’s just wrong.”
Under the federal rule implementing the No Surprises Act, a payer and provider have 30 days to settle any disputes on an out-of-network charge. If an agreement can’t be reached, both parties submit a preferred amount to a third party, which then chooses one.
Last October, the Biden administration set the initial administrative fee for the arbitration process at $50 for 2022 and 2023. However, the administration announced in December that the fee will be $350 for 2023. The reason given for the hike is to help cover rising expenditures for carrying out the arbitration process.
TMA argues in the lawsuit that the fee hike will hurt providers, especially ones that have small-dollar claims including radiology.
“The nonrefundable administrative fee is in addition to the separate fee that each part must pay the IDR entity for its services, though that fee is refundable to the party that wins the arbitration dispute," the group said.
The lawsuit also claims that the regulations are narrowing the law’s provision to batch claims together to save on costs.
The Department of Health and Human Services (HHS) did not immediately return a request for comment on the new lawsuit.
The organization originally filed a lawsuit back in 2021 charging that federal rules for arbitration did not honor the original intent of the law. A federal judge agreed with the TMA’s lawsuit and ruled the original rule should be struck down. HHS released a new rule last year, but that drew a similar legal challenge from TMA, which is still awaiting a ruling after a December 2022 hearing.
TMA has also sued HHS on another part of the rules that focus on the calculation of the qualifying payment amount, which is the average price for a certain medical service and is a factor in the arbitration process.