Texas Medical Association lobs new surprise billing lawsuit taking aim at tweaked rule

The Texas Medical Association issued a new lawsuit Thursday taking aim at a modified rule implementing a surprise medical bill ban, with the group charging the regulation still unfairly favors insurers.

The lawsuit shows that provider groups are not mollified by a revised rule issued by the Biden administration last month. The association charged the new rule, which revises a 2021 regulation, still tilts an arbitration process for out-of-network charges too far in payers’ favor. 

“There should be a level playing field for physicians and healthcare providers in payment disputes after they’ve cared for patients,” said Gary W. Floyd, M.D., the association’s president, in a statement.

The lawsuit is the latest legal fight over how to handle an arbitration process in the No Surprises Act, which outlawed surprise medical bills and called for the process to settle disputes between payers and providers on out-of-network charges.

Providers have charged that the Biden administration’s interpretation of the law tilts arbitration too much in favor of insurers. The law outlines a process where the payer and provider submit their preferred amounts for a charge and the third-party arbiter picks one. However, the original final rule released last year called on the arbiter to put a heavy emphasis on the number closest to the qualifying payment amount, which is the geographic average rate for the service. 

Providers argue that the rule’s emphasis on the amount directly contradicts the law, which specifically did not include a benchmark rate.

The association filed a lawsuit last October challenging arbitration. The American Hospital Association and American Medical Association filed their own lawsuits, as did an air ambulance provider group.

A federal judge sided with Texas Medical Association in a February ruling that invalidated the arbitration process. The judge said that Health and Human Services (HHS) didn’t provide adequate comment when it issued the interim final rule and the agency put too much emphasis on the qualifying payment.

HHS did appeal the ruling, but the administration also issued a new rule last month that tweaked arbitration, lessening the emphasis on the qualifying payment amount and called for the arbiter to put equal weight on other factors. However, providers appear to still be concerned that the qualifying payment amount remains a factor in arbitration. 

“This is unfair to physicians, providers, and the patients we care for, so we had to seek fairness,” Floyd said in a statement explaining the need to issue another lawsuit. 

The association also was concerned that the new rule required arbiters to first consider the qualifying amount instead of other factors. 

HHS did not return a request for comment as of press time on the lawsuit, which was filed in the U.S. District Court for the Eastern District of Texas. 

It also may not be the only legal challenge the agency could face on the revised rule. AMA and AHA issued a notice earlier this week that they want to dismiss their earlier lawsuit on the previous rule. However, the groups cautioned they may not be done going to court over this issue.