Judge Removes Disputed Element of No Surprises Act

A Texas federal court on February 23 struck down a controversial part of the No Surprises Act, which bans surprise medical bills. Several lawsuits have been filed by healthcare providers challenging the Department of Health and Human Services’ mediation process for hospitals, doctors and insurers to settle payment disputes over out-of-network bills. The judge, a former President Trump appointee, ruled the federal government had not followed the Administrative Procedural Act when implementing the regulations around arbitration, a significant win for the doctors who sued to block part of the regulations. The lawsuit was brought by the Texas Medical Association, a trade organization representing over 55,000 physicians, because they believe the Biden Administration had departed from the text of the law passed in 2020. The final regulations state that arbiters should use a median payment rate usually paid for a specific service in that geographic area, but clinicians argue that the statute did not include this restriction.

The legal dispute gets to the heart of a controversial issue of the law – which specific factors an arbitrator may consider in mediating disputes and how much weight each of those factors should get. Lawmakers who drafted the bill are divided on whether they think the Biden Administration interpreted the law correctly; some think the interpretation is correct while others prefer the more doctor- and hospital-friendly approach and maintain that lawmakers intended all factors to have the same weight.

The American Hospital Association and American Medical Association have filed a separate lawsuit as well, but a decision has not yet been made in that case. ASCP will continue to monitor and update members on this issue.

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