Surprise billing lawsuit from Texas doctors

The Texas Medical Association filed its second lawsuit against the federal government’s surprise billing arbitration process Thursday.

An August rule on the independent dispute resolution for surprise medical bills still unlawfully favors insurers over providers, the medical association alleges in its complaint to the US District Court for the Eastern District of Texas.

“We are, once again, asking for the law to be followed as Congress intended, and for the challenged provisions to be invalidated. There should be a level playing field for physicians and healthcare providers in payment disputes after they’ve cared for patients,” Texas Medical Association President Dr. Gary Floyd said in a news release.

The lawsuit comes just after the American Medical Association and American Hospital Association dropped their legal challenges to the policy. The AMA and AHA support the Texas lawsuit. “We intend to make our voice heard in this case by filing an amicus brief that explains how the final rule departs from congressional intent just as the September 2021 interim final rule did,” the organizations said in a joint statement Thursday.

The Texas Medical Association first sued regulators over the arbitration policy last year. The interim regulation required arbitrators to pick the offer for surprise bill payment that came closest to the insurer’s median contracted in-network rate. Judge Jeremy Kernodle of the US District Court for the Eastern District of Texas ruled in favor of the Texas physicians in February.

The federal government appealed the decision in April, but subsequently finalized a rule requiring arbitrators to consider both an insurer’s median contracted in-network rate and additional information when deciding the payment for a surprise bill.

The Texas Medical Association contends the final rule does not go far enough to protect provider payments. The methodology for calculating insurers’ median in-network rates is “deflated” compared to insurers’ actual average contracted rates, the group argued in the news release.

“These provisions of the final rule are manifestly unlawful and will unfairly skew [independent dispute resolution] results in insurers’ favor, granting them a windfall they were unable to obtain in the legislative process. At the same time, they will undermine healthcare providers’ ability to obtain adequate reimbursement for their services, to the detriment of both providers and the patients they serve,” the complaint says.

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