Texas Medical Association Prevails in Latest Legal Challenge to No Surprises Act – CMS Pauses IDR Process

8/31/2023

On August 24th, 2023, Judge Jeremy Kernolde of the U.S. District Court for the Eastern District of Texas once again ruled in favor of the Texas Medical Association (TMA) in its ongoing dispute regarding the No Surprises Act (NSA). This ruling is the fourth instance where Judge Kernolde has aligned with the TMA’s position on the NSA.

The roots of this decision trace back to November 2022, when the TMA initiated legal action asserting that the regulations established by the Department of Health and Human Services (HHS) for the arbitration system to handle payment disputes between insurers and providers enabled insurers to artificially suppress the Qualifying Payment Amount (QPA). Typically, the QPA represents the median rate that an insurer would pay to a provider for a service if it was considered in-network. In disputes over billing, third-party arbitrators are instructed to consider the QPA. The TMA’s position centered around the argument that the QPA calculation disproportionately disadvantages providers engaged in payment disputes with health insurers. This ruling invalidates several provisions linked to the QPA. These invalidated elements include provisions allowing insurers to incorporate QPA calculations of contracted rates for services not rendered by providers. Additionally, the ruling curtails self-insured group health plans’ ability to employ rates from all plans managed by a third-party administrator for QPA calculations.