Texas Docs Sue Over No-Surprises-Act 600% Fee Increase

The Texas Medical Association, joined by others, filed its fourth lawsuit against the No Surprises Act, this time challenging a 600% increase in administrative fees for dispute resolution.

The No Surprises Act, which went into effect last year, prohibits surprise billing in certain circumstances. The No Surprises Act includes an independent dispute resolution (IDR) process. Part of the IDR process is the payment of an administrative fee by both parties. This fee was initially set to $50.

The lawsuit claims that at the end of last year, the Centers for Medicare and Medicaid Services (CMS) announced that “the nonrefundable administrative fee that each party to an IDR proceeding must pay—win or lose—was being increased sevenfold, from $50 to $350.” This expense would be in addition to other arbitration costs.

The parties allege that increasing the administration fee will not only “make the process significantly more expensive for all IDR participants but will make it cost-prohibitive for many providers to access IDR at all.” They argue that the fee hike will be “devastating for those specialties that mostly have small-value claims.”

The parties further assert that providers will not initiate IDR where the claim is for $350 or less because it will not be economically feasible. To support its assertion, the parties provide a real-world example from radiology, where the radiologist submits a claim for $199.41 and the insurer offers to pay $102.24. The parties argue that “submitting the claim to IDR would be economically irrational because even if the radiologist prevailed, he or she would spend $350 in administrative fees to recover only $97.17, producing a net loss of $252.83.”

The following joined the Texas Medical Association in filing the lawsuit: Adam Corley, M.D., a Texas-based emergency physician; Tyler Regional Hospital, LLC, a general acute care hospital based in Tyler, Texas; Texas Radiological Society, a professional, medical society; and Houston Radiology Associated, a radiology group practice based in Houston, Texas.

The Texas Medical Association and the other plaintiffs are asking for a declaration that the challenged provisions of the No Surprises Act be declared unlawful, an injunction barring the enforcement of the provisions, and other relief including attorney’s fees and costs.

The lawsuit lists the following as defendants: the United States Department of Health and Human Services; Office of Personnel Management; Department of Labor; Department of the Treasury; the Centers for Medicare and Medicaid Services; and the current heads of those agencies in their official capacities.