Texas Surprise Billing Act Ruling

Feb. 25, 2022

Earlier this week, the U.S. District Court for the Eastern District of Texas vacated key provisions of the regulation implementing the No Surprises Act, the law designed to curtail “surprise” medical bills passed at the end of 2020.  The court’s ruling applies on a nationwide basis.

Although the core of the law remains intact, many of the provisions of the HHS/Labor Department/IRS regulation governing the independent dispute resolution process have now been blocked.

In particular, the provision of the rule that would have required independent arbitrators to give undue weight to the median of contracted rates within a given market in resolving a payment dispute has been set aside.  Under the rule, an arbitrator would have almost always been required to select the offer closest to the “qualifying payment amount” – the median of contracted rates within a given market.  Many providers felt – and LUGPA stated in its comment letter on the rule – that this provision tilted the playing field massively in favor of insurers.  The court agreed with these arguments and therefore vacated the related provisions of the rule.

Other provisions of the law – such as the requirement to provide notice to patients of their rights under the law and calculation of patient coinsurance amounts – remain in effect, and practices must continue to comply with these provisions.  What has changed is the process involved when a dispute arises between providers and insurers that will go to arbitration.

We expect that the government will appeal its loss to the U.S. Court of Appeals for the Fifth Circuit.  The government may also seek to block the nationwide application of the Texas decision.  In addition, there is another lawsuit challenging the identical provision of the rule filed by the American Medical Association and the American Hospital Association pending in federal district court in Washington, D.C.  The court has not ruled on that challenge yet.

We anticipate that the agencies will soon issue guidance addressing the steps forward now that these provisions of the rule have been blocked nationwide.

LUGPA’s Health Policy & Advocacy team will remain in close touch as developments continue to arise. 


See also LUGPA's No Surprises Act Information and Resource Hub