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BCMS – TOGETHER
WE STAND

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

H istorically, health plan payments have not covered the en- • market share of both parties involved

tirety of an out-of-network patient’s bill. As a result, a pa-
• provider’s training and experience
tient could be left with a “balance bill” for the remaining
amount representing the difference between the health plan’s payment • patient’s acuity/complexity of furnishing the item or service
• if the provider is a facility, teaching status, case-mix and scope of
and the physician’s billed charge (after patient cost-sharing). services
Patients sometimes expect to receive balance bills (e.g., when they are • demonstration of good faith efforts by providers and facilities to
using their out-of-network benefit and choose an out-of-network physi- enter into a network agreement
cian). Other times, patients have been “surprised” to receive a balance
bill for out-of-network services. These surprise medical billing scenarios However, on September 30, 2021, the US Department of Health
have occurred when a patient was receiving out-of-network emergency and Human Services (HHS) and other agencies released an interim
care or receiving out-of-network services at an in-network facility. final rule (IFR) that unfairly benefitted commercial health insurers.
Surprise medical billing can stem from insurance companies having According to the rule, arbiters were required to rebuttably presume
narrow or inadequate physician networks. A narrow physician network that the offer closest to the qualifying payment amount (an amount
means insurance companies do not have enough doctors, providers, that is supposed to be the median in-network rate under the law but is
and facilities that are in the network, which also causes a problem for deflated based upon the rulemaking methodology) was the appropriate
the patient with access to care. out-of-network rate.
In 2020, Congress stepped in to address surprise medical bills at the On October 28, 2021, the Texas Medical Association (TMA) filed
federal level. The No Surpises Act (NSA) was enacted on December 27, a lawsuit challenging the IFR’s presumption language. On February
2020 as part of the Consolidated Appropriation Act of 2021. The NSA’s 23, 2022, the court released an opinion finding in favor of TMA. The
surprise billing provisions apply to certain out-of-network medical bills court found that the federal agencies had improperly bypassed notice
for patients covered by certain plans, e.g., self-funded ERISA plans. and comment in implementing the challenged provisions of the rule,
(Texas’ surprise billing law, SB 1264 (86- R), remains in effect as a “spec- and that the IFR conflicted with the terms of the NSA. The federal
ified state law” for the state regulated plans subject to its provisions). agencies appealed the decision, which was stayed pending the release
Among other patient protections, for most emergency services, as of final rules.
well as non emergency services provided at in-network facilities (with On August 19, 2022, the Departments released the long-awaited
certain exceptions), the NSA restricts out-of-network physicians from final rule. While the new rule removed the rebuttable presumption
billing a patient for more than the patient’s in-network cost sharing language of the prior rule, it included new language that still elevates
amount. The health plan has 30 days to make an initial payment or no- the QPA, tilting the scales in the health plan’s favor once again. On
tice of denial of payment after receiving a bill from the physician. A September 22, 2022, TMA filed a second lawsuit, challenging certain
physician who is unhappy with the initial payment may initiate open provisions of this final rule. A hearing has been scheduled in TMA’s
negotiations and independent dispute resolution (IDR) with the plan. second lawsuit for December 20.
The patient is not involved in the IDR. On November 30, 2022, TMA filed a third lawsuit against the fed-
The federal law specified various factors that must be considered dur- eral agencies related to rulemaking under the No Surprises Act. In this
ing the IDR process. The IDR process that was enacted by Congress lawsuit, TMA is challenging portions of the federal agencies’ July 2021
incentivized both insurers and providers to act in good faith and resolve interim final rules that artificially deflate the QPA, which results in un-
disputes amongst themselves. Under the law, factors that the arbiter derreimbursements from health plans.
must consider include: Unfair rules regarding the IDR process and the calculation of the
• the “qualifying payment amount” for comparable items or services QPA can reduce access to care by discouraging meaningful contracting
furnished in the same geographic area negotiations and reducing provider networks.
• prior contracted rates during the previous four plan years Hopefully, TMA’s legal challenges will ensure that the agencies’ rules

22 SAN ANTONIO MEDICINE • January 2023