UPDATE FROM MAY 12, 2022: After filing a last-minute appeal on April 22, HHS and other federal agencies later asked the court to hold their appeal pending the release of the surprise billing final rule expected this summer. On May 3, 2022, the court granted the government’s request to pause proceedings until the final rule is issued.
The Department of Health and Human Services (HHS), along with several other federal agencies, has filed an appeal of the February ruling by Judge Jeremy D. Kernodle in the U.S. District Court for the Eastern District of Texas.
That ruling found portions of the independent dispute resolution (IDR) process, established by HHS and the Departments of Labor and Treasury during last year’s surprise billing rulemaking, to be inconsistent with the No Surprises Act itself. Judge Kernodle, siding with the Texas Medical Association and Adam Corley, ruled that sections of the Departments’ Final Rule requiring arbitrators to give priority consideration to the qualifying payment amount (QPA) when selecting between two payment offers should be withdrawn and invalidated immediately on a nationwide basis.
In response to the ruling, the Departments released revised IDR guidance in April, removing all references to the flawed QPA presumptive policy. While providers considered the ruling and subsequent revisions a win, the appeal means that’s yet to be determined.
In addition to the appeal, as many as four other lawsuits targeting the IDR portions of the No Surprises Act are ongoing, according to the Commonwealth Fund, including lawsuits by
- the Association of Air Medical Services (AAMS) in the District of Columbia before Judge Richard J. Leon;
- the American Medical Association (AMA), the American Hospital Association, Renown Health, UMass Memorial Health, Dr. Stuart Squires, and Dr. Victor Kubit in the District of Columbia before Judge Leon;
- the Georgia College of Emergency Physicians (GACEP) and Dr. Brett Cannon in the northern district of Georgia before Judge Mark H. Cohen; and
- the American College of Emergency Physicians, the American College of Radiology and the American Society of Anesthesiologists in the northern district of Illinois before Judge Marvin E. Aspen.
The lawsuits in Georgia and Illinois have been paused for at least 60 days while HHS appeals the initial ruling by Judge Kernodle.
In the AAMS lawsuit before Judge Leon in the District of Columbia, the AHA and AMA recently submitted a supplemental brief urging the U.S. District Court for the District of Columbia to act as quickly as possible to hold unlawful and vacate all provisions they are challenging in the federal government’s interim final rule on surprise medical billing.
A sixth lawsuit, brought by Dr. Daniel Haller and Long Island Surgical PLLC in the eastern district of New York before Judge Ann M. Donnelly, is challenging the constitutionality of the No Surprises Act in general. In his complaint, Haller “argues the entire law should be thrown out because it violates his constitutional rights to bill patients directly for any ‘balance of the fair value’ of his services,” according to Stat News. Briefings recently began in that case.
A seventh lawsuit was filed in the Eastern District of Texas just this week, the first by an air ambulance provider. Despite the earlier ruling in Texas, LifeNet claims that air ambulance providers continue to be subject to the presumptive QPA policy as part of the IDR. They have requested that their case be assigned to Judge Kernodle.
A final arbitration rule is expected from the Biden administration this month. According to the Commonwealth Fund’s Katie Keith, “This final rule could rescind, replace, or readopt the provisions set aside by Judge Kernodle, which could trigger future lawsuits over the new rule and arbitration process.”
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