Reed Smith Client Alerts

A federal judge in Texas has granted a challenge by health care providers to the No Surprises Act Interim Final Rules. In this alert, we comment upon the decision and its potential impact in Texas and other jurisdictions.

Yesterday, a federal judge in Texas granted the Texas Medical Association and Dr. Adam Corley’s motion for summary judgment, vacating portions of the October 7, 2021 Interim Final Rules (IFRs) to the No Surprises Act (NSA). See Tex. Med. Ass’n & Adam Corley v. United States HHS, No. 6:21-cv-425-JDK, 2022 U.S. Dist. LEXIS 31807, at *1 (E.D. Tex. Feb. 23, 2022). The decision concerns sections of the IFRs that would greatly influence independent dispute resolution (IDR), which is a baseball-style arbitration process whereby parties can settle payment disputes under the NSA.

Specifically, this lawsuit challenges the provisions in the IFRs that effectively create a rebuttable presumption in IDR proceedings that the “qualifying payment amount” (QPA) is an appropriate payment amount. As further detailed in previous regulations, QPA is generally the median contracted rate on January 31, 2019, updated annually based on the consumer price index. The IFRs require the IDR decision-maker to select the offer closest to QPA unless credible information demonstrates that QPA is materially different from the appropriate payment amount. The first date IDR proceedings may be initiated is March 1, 2022.

The Texas Medical Association argued that the QPA presumption grants one statutory factor special consideration and weight above and beyond all others, thereby giving payors an advantage that did not exist in the legislative text. Several other complaints filed in different jurisdictions contain similar allegations.