Texas Medical Association sues over surprise billing law arbitration provision

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The association claims that the new surprise billing law’s arbitration provision overly favors insurers.

The Texas Medical Association (TMA) is suing the federal government over the arbitration provision recently passed surprise billing legislation.

According to a news release, TMA says the No Surprises Act of late-2020 laid out an independent dispute resolution (IDR) process to resolve arguments between physicians and insurers over out-of-network payments with an arbitrator making the ultimate call on which party’s proposed amount should be paid.

“TMA supports the patient protection intent of the No Surprises Act,” TMA President E. Linda Villarreal, MD, says in the release. “However, TMA’s lawsuit challenges one component of the administration’s rule that ignores congressional intent and unfairly gives health plans the upper hand in establishing payment rates when a patient receives care from an out-of-network physician, oftentimes in an emergency.”


TMA’s dispute with the Biden administration lies in the final rule, which requires the IDR arbitrator to presume the median contracted rate, or qualifying payment amount (QPA), set by insurers as the appropriate out-of-network rate, which is contrary to Congress’ stated aim to make these arbitrations fair. The suit, filed Oct. 28 in a U.S. District Court in Texas, asks the court to restore the IDR process to that intended by Congress, according to the release.

“Nowhere did Congress specify that the QPA, or any other factor for that matter, should be given primacy over the other enumerated factors,” the association’s initial complaint says, giving insurers an unfair advantage to insurers.

TMA argues that the rule will incentivize health plans to shrink networks and cut physician payment leading physicians to receive reimbursements which don’t reflect the fair market value of their services, the release says.

“We are disappointed the Biden administration ignored congressional intent and essentially set up the arbitration system to operate like a casino, with health insurers playing the role of the house,” Villarreal says in the release. “Everyone knows the house always wins. With the current rule, patients, physicians, and our country lose.”