Texas Court Strikes Down Key Part of Biden Administration’s Surprise Billing Rules
On Feb. 23, a federal judge in the U.S. District Court for the Eastern District of Texas issued a decision vacating parts of a Biden Administration rule implementing the ban on “surprise billing.” The decision was issued in response to a lawsuit filed by the Texas Medical Association (TMA) challenging the independent dispute resolution (IDR) process included in the No Surprises Act (P.L. 116-68) interim final rule. When considering payment disputes between health plans and providers for out-of-network care, the rule requires arbiters to select the offer closest to the insurer’s median contracted rate. This provision would lead to lower payments and unduly favors insurers, upsetting a careful balance established by Congress when it crafted the bill. According to the court, the No Surprises Act is unambiguous regarding the IDR process in stating that the qualifying payment amount (QPA) — or median in-network rate — is only one of several factors to consider resolving a billing dispute between an out-of-network provider and an insurer.
This provision of the rule is now no longer in effect nationwide, and the Biden Administration is reviewing the court’s decision and considering whether to appeal the ruling. In the meantime, CMS announced that it notified providers, health plans, IDR entities and others of steps the administration is taking to conform to the court’s order.
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