HomeHealth Care NewsPhysicians' Group Sues Over Surprise Billing Regulations

Physicians’ Group Sues Over Surprise Billing Regulations

The Texas Medical Association (TMA), a trade group of physicians, is suing to stop federal regulations from implementing a law designed to clamp down on surprise medical bills.

An in-person hearing for summary judgments is scheduled for February 4, according to TMA.

The TMA is a trade association representing more than 55,000 physicians and medical students.

The No Surprises Act signed into law by President Donald J. Trump went into effect on January 1, 2022. The act restricts out-of-network doctors, hospitals, and health care providers from billing patients for more than the “in-network” rates negotiated by their insurance plans.

Patients often receive surprise bills, also known as “balance bills,” for treatment in emergency rooms or by physicians in some specialties, long after their treatment. The delay is caused by the negotiating process between the provider and the insurance company to resolve the difference in billing.

‘Holding Down Premium Costs’

Health insurance plans have created networks of providers that pay lower standard rates to benefit themselves and their enrollees, says Roger Stark, M.D., a physician, and health care policy analyst at the Washington Policy Center.

“Insurance companies have been holding down premium costs for patients—hence making the company more competitive—by forming networks,” said Stark. “These networks typically pay providers less than the provider’s usual fee.”

Surprise medical billing occurs when physicians who do not accept the network rates bill patients for costs insurers refuse to pay, says Stark.

“Hospitals that are ‘in-network’ often contract, or give privileges, to doctors who are not in-network,” said Stark. “Consequently, a patient, either in an emergency or an elective situation, may go to an in-network hospital but be treated by an out-of-network doctor.”

Medicare Doesn’t Allow ‘Balanced Billing’

The No Surprises Act essentially prohibits an out-of-network provider from balance billing in-network patients, although there is some room for negotiation on the part of the insurance company and the provider, says Stark.

“Medicare and Medicaid have not allowed balanced billing for decades,” said Stark. “Private insurance generally follows Medicare’s lead on reimbursements. In-network contracts are a way private companies can decrease reimbursements and hold costs down.”

“A simpler but controversial solution would have a hospital that elects to be in-network require all doctors using that hospital to be in-network,” said Stark. “This, of course, would be totally unacceptable for out-of-network doctors—[who view it] essentially [as] restraint of trade.”

‘Benchmark’ vs. ‘Inflated Charges’

The dispute resolution process set up by Congress is controversial, says health economist Devon Herrick.

“The federal legislation against surprise medical bills was contentious,” said Herrick. “Patient advocates wanted the prevailing in-network rates to be the standard while lobbyists for doctors’ groups wanted inflated charges to be the standard. The compromise was for an independent arbitration system to decide fees in a dispute.”

“What the Biden Administration did was request arbitrators use in-network fees as the benchmark rather than the inflated charges,” said Herrick. “I’m not going to complain about this final rule.”

Texas Physicians Sue

The TMA, which represents more than 55,000 physicians and medical students, filed a lawsuit in the U.S District Court for the Eastern District of Texas against the U.S. Department of Health and Human Services (HHS) and other federal agencies to stop certain provisions of the No Surprises Act from taking effect, on October 28.

The TMA argues the government failed to provide requisite notice when it issued final regulations to implement the act in September 2021 and the regulation “undermines Congress’s design” to create an “independent dispute resolution” process in the event of billing disputes.

No court date for the TMA lawsuit was set as of press time.

A similar suit was filed weeks later on November 16 in the U.S. District Court of the District of Columbia by the Association of Air Medical Services.

Regulations ‘Probably Rigged’

The regulations are biased, says Ryan Ellis, president of the Center for a Free Economy.

“My perspective on this is that President Biden has probably rigged the arbitration process in favor of the insurance companies,” said Ellis.

“The goal of the new regulations ought to have been to empower the arbitrator as much as possible one way or another to not tie his hands,” said Ellis. “The fear I have is they overthought it, and it’s not clear to me who is the beneficiary.”

Arbitrators Need ‘More Freedom’

Resolving disputes will require fewer limits on the process, says Ellis.

“I think the arbitrators need to have a lot more freedom than the regulations are giving them,” said Ellis. “[The regulations are] trying to kind of game a solution and, in reality, what they ought to do is let the arbitration system work as Congress intended. I think we have to see how arbitrators deal with this because it all comes down to whether they are being compelled by the regulations to overly favor the provider or to overly favor the insurer.”

“When Congress passes bad laws, and I’m referring to Obamacare when I say this, it often has the consequence of creating unintended bad policy outcomes,” said Ellis. “A classic example of that is how Obamacare distorted markets and led to surprise medical billing, which then forced Congress to pass another law, and you can see where that goes.”

Kenneth Artz (KApublishing@gmx.com) writes from Dallas, Texas.


Internet info:

Requirements Related to Surprise Billing; Part II, Federal Register, Vol. 86, October 7, 2021:  https://www.govinfo.gov/content/pkg/FR-2021-10-07/pdf/2021-21441.pdf

Texas Medical Association, et. al, v. U.S. Department of Health and Human Services, et. al., U.S. District Court for the Eastern District of Texas, Tyler Division, October 28, 2021:  https://thetexan.news/wp-content/uploads/2021/10/TMA-v-U.S.-Surprise-Billing.pdf


Kenneth Artz
Kenneth Artzhttps://www.heartland.org/about-us/who-we-are/kenneth-artz
Artz has more than 20 years’ experience in nonprofit organizations, publishing, newspaper reporting, and public policy advocacy.


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