By Jayesh B. Shar, MD, MSc, UHM ABPM, CWSP, FAPWCA, FCCWS, FACHM FUHM, FACP

Surprise Medical Billing litigation update – TMA on Offensive to support our patients

By Jayesh B. Shah, MD, MSc, UHM ABPM, CWSP, FAPWCA, FCCWS, FACHM FUHM, FACP

Historically, health plan payments have not covered the entirety of an out-of-network patient’s bill. As a result, a patient could be left with a “balance bill” for the remaining amount representing the difference between the health plan’s payment and the physician’s billed charge (after patient cost-sharing).

Patients sometimes expect to receive balance bills (e.g., when they are using their out-of-network benefit and choose an out-of-network physician). Other times, patients have been “surprised” to receive a balance bill for out-of-network services. These surprise medical billing scenarios have occurred when a patient was receiving out-of-network emergency care or receiving out-of-network services at an in-network facility.

Surprise medical billing can stem from insurance companies having narrow or inadequate physician networks. A narrow physician network means insurance companies do not have enough doctors, providers, and facilities that are in the network, which also causes a problem for the patient with access to care.

In 2020, Congress stepped in to address surprise medical bills at the federal level. The No Surpises Act (NSA) was enacted on December 27, 2020 as part of the Consolidated Appropriation Act of 2021. The NSA’s surprise billing provisions apply to certain out-of-network medical bills for patients covered by certain plans, e.g., self-funded ERISA plans. (Texas’ surprise billing law, SB 1264 (86- R), remains in effect as a “specified state law” for the state regulated plans subject to its provisions).

Among other patient protections, for most emergency services, as well as non emergency services provided at in-network facilities (with certain exceptions), the NSA restricts out-of-network physicians from billing a patient for more than the patient’s in-network cost sharing amount. The health plan has 30 days to make an initial payment or notice of denial of payment after receiving a bill from the physician. A physician who is unhappy with the initial payment may initiate open negotiations and independent dispute resolution (IDR) with the plan. The patient is not involved in the IDR.

The federal law specified various factors that must be considered during the IDR process. The IDR process that was enacted by Congress incentivized both insurers and providers to act in good faith and resolve disputes amongst themselves. Under the law, factors that the arbiter must consider include: • the “qualifying payment amount” for comparable items or services furnished in the same geographic area • prior contracted rates during the previous four plan years • market share of both parties involved • provider’s training and experience • patient’s acuity/complexity of furnishing the item or service • if the provider is a facility, teaching status, case-mix and scope of services • demonstration of good faith efforts by providers and facilities to enter into a network agreement

However, on September 30, 2021, the US Department of Health and Human Services (HHS) and other agencies released an interim final rule (IFR) that unfairly benefitted commercial health insurers. According to the rule, arbiters were required to rebuttably presume that the offer closest to the qualifying payment amount (an amount that is supposed to be the median in-network rate under the law but is deflated based upon the rulemaking methodology) was the appropriate out-of-network rate.

On October 28, 2021, the Texas Medical Association (TMA) filed a lawsuit challenging the IFR’s presumption language. On February 23, 2022, the court released an opinion finding in favor of TMA. The court found that the federal agencies had improperly bypassed notice and comment in implementing the challenged provisions of the rule, and that the IFR conflicted with the terms of the NSA. The federal agencies appealed the decision, which was stayed pending the release of final rules.

On August 19, 2022, the Departments released the long-awaited final rule. While the new rule removed the rebuttable presumption language of the prior rule, it included new language that still elevates the QPA, tilting the scales in the health plan’s favor once again. On September 22, 2022, TMA filed a second lawsuit, challenging certain provisions of this final rule. A hearing has been scheduled in TMA’s second lawsuit for December 20.

On November 30, 2022, TMA filed a third lawsuit against the federal agencies related to rulemaking under the No Surprises Act. In this lawsuit, TMA is challenging portions of the federal agencies’ July 2021 interim final rules that artificially deflate the QPA, which results in underreimbursements from health plans.

Unfair rules regarding the IDR process and the calculation of the QPA can reduce access to care by discouraging meaningful contracting negotiations and reducing provider networks.

Hopefully, TMA’s legal challenges will ensure that the agencies’ rules

follow the law so patients can receive the best care that is affordable and accessible.

References 1. Centers for Medicare and Medicaid Services. Ending surprise medical bills. https://www.cms.gov/nosurprises 2. Harris PA. AMA says surprise billing proposal in Congress is a step forward. American Medical Association. https://www.amaassn.org/press-center/press-releases/ama-says-surprise-billing-proposal-congress-step-forward . Published May 23, 2019. 3. Texas Medical Association. TMA moves for victory in challenge to unfair arbitration rule. https://www.texmed.org/Template.aspx?id =58365&terms=Surprise%20medical%20billing . Published Dec. 13, 2021. 4. Texas Medical Association. TMA sues feds over unfair rule for surprise billing law. https://www.texmed.org/Template.aspx?id =58062&terms=Surprise%20medical%20billing . Published Oct. 29, 2021. 5. Robeznieks A. Federal action on surprise medical bills: what doctors should know. American Medical Association. https://www.amaassn.org/delivering-care/patient-support-advocacy/federal-actionsurprise-medical-bills-what-doctors should?utm_medium=ppc& utm_campaign=pe-digital-ads-surprise-billing&gclid=CjwKCAiAxJSPBhAoEiwAeO_fP_R_2xDIVRQl02oMWi3tUf2IvgU0fK0 7SSEoVSqIWNzemAy9eM1zXRoCYusQAvD_BwE . Published Jan. 26, 2021.

Jayesh B. Shah is Immediate Past president of the American College of Hyperbaric Medicine and serves as medical director for two wound centers based in San Antonio, Texas. In addition, he is president of South Texas Wound Associates, San Antonio. He is also the past president of both the American Association of Physicians of Indian Origin and the Bexar County Medical Society and is currently on the Texas Medical Association Board of Trustees.