A federal appeals court has upheld a lower court decision that struck down key parts of legislation aimed at reforming surprise medical billing.
The Fifth Circuit Court’s ruling, which was filed late last week, confirms a February 2023 decision from the court in the Eastern District of Texas, vacating arbitration methodology set by the Centers for Medicare & Medicaid Services (CMS). The Texas Medical Association (TMA) led the provider challenge, which alleged that the methodology unfairly favored payers.
The Biden administration appealed that decision.
Under CMS’ framework, the independent arbiters tapped to resolve disputes would first consider the qualified payment amount, or QPA, which is determined by payers. This, the challengers argued, would put greater weight on the QPA as a measure compared to other factors.
The Fifth Circuit judges confirmed that the framework conflicts with the goals of the No Surprises Act.
“The Departments’ skewed interpretation is inconsistent with the evenhandedness embodied in the Act,” the judges wrote in the ruling.
TMA filed suit against the Department of Health and Human Services in late 2022 over the methodology for the arbitration. The organization is involved in several other lawsuits challenging the implementation of the No Surprises Act.
What’s next for arbitration is unclear, but it’s likely that CMS will have to press pause on the dispute resolution decision as the agency weighs next steps in the legal case. CMS similarly placed the arbitrations on hold following other legal rulings.
The TMA celebrated the ruling in a statement, saying it has “long held that the federal departments lack authority to tell arbitrators how to weigh the factors during surprise billing arbitration.”
“We hope this resolves the issue once and for all: Congress intended the NSA to be a fair means of protecting patients from surprise bills,” the TMA said. “The federal agency rules must adhere to the law and cannot privilege the qualifying payment amount.”