Texas Med. Ass’n v. HHS, 2023 WL 5489028 (E.D. Tex. 2023)
In an ongoing dispute between an association of health care providers and HHS, the DOL, and Treasury, a federal trial court has vacated additional portions of regulations implementing the surprise billing independent dispute resolution (IDR) provisions of the Consolidated Appropriations Act, 2021. Previously, the same court vacated portions of the IDR regulations that prioritized the qualifying payment amount (QPA) when resolving disputes and determined that an increase in fees for participating in the IDR process, along with restrictions on “batching” claims, violated the federal Administrative Procedure Act (APA). In this instance, the association challenged rules regarding how to calculate the QPA (which, broadly, is the median of the plan’s contracted rates with participating providers for the item or service in the geographic region) and related disclosure requirements. In addition, air ambulance providers challenged rules specific to the IDR process for air ambulance services.
The court concluded that aspects of the interim final rule on calculating the QPA and related agency FAQs conflicted with the statutory language. The court vacated provisions that: allowed the inclusion of “ghost rates” (rates for services that a particular provider has not provided) and rates for providers outside the applicable specialty; excluded bonus or other incentive payments from the rate calculation; and allowed self-insured plan calculations to be based on the rates of other self-insured plans administered by the same TPA. But it rejected the association’s assertion that rules governing disclosures about QPA calculations were not “meaningful,” concluding that Congress had given the agencies wide discretion in this regard and that the disclosure rule was reasonable and reasonably explained.
Turning to the air ambulance issues, the court concluded that provisions of the interim final rule requiring an initial payment decision no later than 30 days after receipt of all information “necessary to decide a claim” conflicted with the statutory language, which measures the 30-day period from the date the bill is transmitted. And, disagreeing with a recent decision by another court, it vacated provisions excluding “single-case” agreements from the QPA calculation for air ambulance services. In agreement with that decision, it held that provisions allowing air ambulance QPAs to be calculated in certain instances using Census divisions (which the air ambulance providers characterized as “widely disparate geographic regions”) were reasonable and should stand. The court also set aside agency process guidance requiring two separate IDR processes for a single medical air transport (an issue deriving from the use of separate service codes for the air transport’s lift-off and per-mile rates).
EBIA Comment: In response to this decision, all federal IDR process operations have—again—been temporarily suspended. The agencies indicate that disputing parties should continue to engage in open negotiation. This litigation seems unlikely to be resolved any time soon, and the latest suspension of the IDR process will surely exacerbate existing backlogs. For more information, see EBIA’s Health Care Reform manual at Sections XII.B.3 (“Surprise Medical Billing: Emergency and Non-Emergency Services”) and XII.B.4 (“Surprise Air Ambulance Billing”) and EBIA’s Group Health Plan Mandates manual at Section XIII.B (“Patient Protections”). See also EBIA’s Self-Insured Health Plans manual at Section XIII.C (“Federally Mandated Benefits”).
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