The Texas Medical Association is celebrating a ruling by the full U.S. Court of Appeals for the 5th Circuit in the association’s third lawsuit over federal No Surprises Act rules, according to an Aug. 12 news release. The en banc opinion, issued Tuesday, reverses an earlier decision by a three-judge panel of the same court and restores TMA’s district court win over how insurers calculate a key payment benchmark in billing disputes.
The case, known as TMA III, challenged federal rules governing the qualifying payment amount, or QPA, a benchmark arbitrators consider when resolving disputes over health plans’ payment for certain out-of-network care. According to the release, the challenged rules permitted the inclusion of so-called ghost rates – contract rates with physicians and other health professionals who do not provide the particular service – and required the exclusion of bonus and incentive payments, which the association said artificially deflated the QPA and, in turn, reimbursement rates.
“TMA celebrates the federal appellate court’s en banc ruling, which is vital to implementing a fair process and promoting patient access to care under the No Surprises Act (NSA) as intended by Congress,” said TMA President Bradford W. Holland, MD, in the statement. Holland said the rules “contributed to unfair negotiating practices by insurers and a dramatic increase in physicians and other health care professionals having to seek arbitration with insurers in order to obtain fair payment.”
TMA filed the lawsuit in November 2022, according to the release. The U.S. District Court for the Eastern District of Texas initially ruled in the association’s favor, vacating the rules. The federal agencies involved – the U.S. Departments of Health and Human Services, Labor and the Treasury, along with the Office of Personnel Management – appealed but dropped their challenge to two of the four provisions early in the briefing. A three-judge panel then sided with the agencies on the remaining ghost rate and total maximum payment issues, a decision the full court has now reversed.
Holland congratulated TMA Vice President and General Counsel Kelly Walla, the association’s legal team and outside counsel Sidley Austin LLP for the outcome. The association has filed four lawsuits over No Surprises Act implementation and has won favorable district court rulings in each, according to the release.
TMA, which describes itself as the largest state medical society in the nation with more than 60,000 physician and medical student members, said the decision “is another step in the right direction for both patients and the physicians who care for them.”