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New Lawsuit Opposing No Surprises Act

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The No Surprises Act aims to cut “surprise bills” that patients receive after receiving emergency care at an out-of-network facility or non-emergency care at an in-network facility from an out-of-network provider.

Not Unique to the Air Ambulance Industry

The No Surprises Act prohibits providers, including air ambulance services, from billing patients for unexpected out-of-network expenses. Out-of-network providers must instead negotiate with the patient’s insurer or health plan to reach an agreement on the amount due for the services. If the parties are unable to reach an agreement, either the provider or the insurer may initiate arbitration, in which both parties submit payment proposals to a certified independent dispute resolution entity (IDRE). Based on a set of statutorily enumerated factors, the IDRE selects the offer that it believes best represents the value of the disputed services.

The Bone of Contention

The Qualifying Payment Amount (QPA), which is generally defined as the median in-network rate that an insurer would have paid had the services been rendered in-network, is one of the factors that IDREs are directed to consider when selecting an offer. The QPA is a number that insurers set and control; providers have little insight into how an insurer sets and calculates its QPA. When the Departments issued the previous rulemaking, which instructed IDREs to assume that the QPA was the appropriate out-of-network reimbursement rate by default, medical providers immediately challenged that portion of the rule.

The Legal Tangle

The Texas Medical Association (TMA) and an individual provider sued the Departments in October 2021, alleging that the previous version of the rule violated the No Surprises Act due to its deference to the QPA. A Texas federal court agreed. It vacated the portions of the prior rule that it determined implemented a “rebuttable presumption” in favor of the QPA on summary judgment. The Departments then issued the new rule in August 2022, directing IDREs to first consider the QPA, and then the other statutory factors only if the IDRE determines that credible information submitted has not already been factored into the payer’s QPA.

The same plaintiffs from the previous case filed suit again, this time joined by a hospital. The plaintiffs claim that the revised provision has the same effect as the previously invalidated rule – awarding QPA an undue advantage in the favor of. It remains to be seen what will come of it, but one thing is certain: end-users will continue to benefit from the No Surprises Act.

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