Last week, the U.S. Fifth Circuit Court of Appeals held that regulations implemented by the Departments of Health and Human Services, Labor, and Treasury were permitted to include “ghost rates”—contracted rates for services that were never actually provided—in calculating the Qualifying Payment Amount (QPA) under the Federal No Surprises Act (NSA). This was the last of appeals involving TMA’s legal actions against the NSA rules challenging the authority of the Departments in its implementation of rules that were viewed as created an uneven playing field in favor of insurers. Each lawsuit tackles specific provisions in the NSA’s implementation:
- TMA Lawsuit #1 (Texas Medical Association et al. v. U.S. Department of Health and Human Services, 6:21-cv-00425): Filed in October 2021, this lawsuit challenged the QPA’s preemptive weight over other factors in the IDR process. The Texas District Court ruled in TMA’s favor in February 2022, finding that the rule conflicted with the NSA’s intent by giving disproportionate weight to the QPA. The Court vacated the regulation and the Departments did not appeal. Instead, the Departments adopted new regulations that were subject to challenge in TMA #2.
- TMA Lawsuit #2 (Texas Medical Association et al. v. U.S. Department of Health and Human Services, 6:22-cv-00372): Filed in September 2022, this suit argued that prioritizing the QPA over other arbitrable factors unfairly benefited insurers. In February 2023, the District Court again ruled in favor of TMA, leading to modifications in the rule’s interpretation. This decision was affirmed by the Fifth Circuit.
- TMA Lawsuit #3 (Texas Medical Association et al. v. U.S. Department of Health and Human Services, 6:22-cv-00450): The focus of this blog post, TMA III, challenged the inclusion of ghost rates and transparency issues around QPA calculations. Although initially successful, the federal government appealed, and the Fifth Circuit ultimately upheld the federal agencies’ methodology.
- TMA Lawsuit #4 (Texas Medical Association et al. v. U.S. Department of Health and Human Services, 6:23-cv-00059): Filed in January 2023, this lawsuit contests a steep 600% increase in IDR administrative fees, arguing that such an increase undermines the IDR process’s accessibility. In August 2023 the Texas District Court ruled, in part, in favor of the TMA.
Moving Forward in an Evolving Regulatory Landscape
These rulings collectively underscore the dynamic nature of NSA rulemaking and the ongoing debate over the QPA’s role in dispute resolution. As these regulatory frameworks evolve, our legal team is closely monitoring the impact on claims processing. We are dedicated to adapting our strategies and maintaining high standards of representation for out-of-network providers as they navigate these complex regulatory changes.
