Texas Med. Ass’n v. HHS, 2023 WL 4977746 (E.D. Tex. 2023)
In the latest installment of an ongoing dispute between a health care provider association and HHS, a federal trial court has set aside additional portions of the surprise billing independent dispute resolution (IDR) process for resolving payment disputes between certain out-of-network providers and group health plans and insurers. The court previously vacated (twice) key portions of HHS regulations implementing the IDR process. While the earlier litigation focused on the weight assigned to the “qualifying payment amount” (which the court said was unlawfully prioritized in the IDR negotiation process), this latest case focused on the increased fees required to participate in the IDR process in 2023. The association asserted that the dramatic increase (from $50 to $350 per disputing party) rendered the process cost prohibitive for providers with small-value claims and was exacerbated by an HHS rule that makes it difficult to “batch” related claims for resolution in a single proceeding. The association argued that both actions—the fee increase and the batching restriction—violated the Administrative Procedure Act (APA) because they were implemented without notice or comment and were arbitrary and capricious. The association asked for a refund of fees already paid in 2023 and an extension of time to initiate 2023 IDR proceedings for providers that may have refrained from filing due to the high cost.
The court agreed that HHS had improperly bypassed the APA’s notice-and-comment requirement when it issued the fee guidance and the batching rule, and that both must be vacated. However, the court denied the requested refunds and deadline extensions, concluding that it could not place the providers in a better position than they would have been in but for HHS’s mistakes. In response to the court’s decision, HHS has announced on its website that the agencies have temporarily suspended the federal IDR process, including the ability to initiate new disputes, pending further instructions.
EBIA Comment: The agencies previously advised that they were considering improvements to speed up IDR determinations and payments, but continuing litigation and the current suspension of the IDR process seem likely to increase the growing backlog of submitted disputes. 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”).
Get all the latest tax, accounting, audit, and corporate finance news with Checkpoint Edge. Sign up for a free 7-day trial today.
