Federal court strikes down part of HHS surprise billing rule
By Rachel Cohrs / February 23, 2022
WASHINGTON — A federal court on Wednesday struck down the Biden administration’s interpretation of a controversial part of the federal law banning surprise medical bills.
Health care providers have filed several lawsuits challenging how the Department of Health and Human Services created a mediation process for hospitals and doctors and insurers to settle disputes over out-of-network medical bills.
A federal court judge in Texas sided with Texas Medical Association, a trade association representing more than 55,000 physicians, and decided that HHS was mistaken in its decision to instruct mediators to give rates insurers and providers contracted with in the past extra weight compared with other factors.
“This decision is an important step towards restoring the fair and balanced process that Congress enacted to resolve surprise billing disputes between health insurers and physicians,” said Diana Fite, immediate past president of the Texas Medical Association.
The legal dispute cuts to the heart of an issue that roiled Capitol Hill ahead of the law’s passage in December 2020 — what specific factors an arbitrator would be allowed to consider in mediating the disputes, and how much weight each of those factors should get.
Lawmakers involved in drafting the bill have split on whether they think the Biden administration interpreted the law correctly. Senate health committee Chair Patty Murray (D-Wash.) and House Energy & Commerce Chair Frank Pallone (D-N.J.) said they think the Biden administration’s interpretation is correct, but Ways & Means Chair Richard Neal (D-Mass.), Rep. Kevin Brady (R-Texas), and a bipartisan group of 152 other lawmakers who prefer the more doctor- and hospital-friendly approach argued that lawmakers intended for all factors to have the same weight.
Pallone tweeted Wednesday night that the Texas court decision “ignores the clear letter and intent” of the No Surprises Act, and wrote that the lawsuit will endanger patient protections and raise costs for consumers.
The patient protections in the law went into effect in January, but the mediations between insurers and providers have not yet begun. The patient protections were not struck down by the Texas judge.
The American Hospital Association and American Medical Association filed a separate lawsuit as well, and a decision has not been made in that case.
HHS did not immediately respond to a request for comment.
The decision applies nationwide. If higher courts don’t overturn the decision or pause implementation so appeals can play out, mediations will begin without the guidance that was struck down, said Capstone health care analyst Hunter Hammond.