On Wednesday, February 23, 2022, a federal court in Texas rejected the Biden administration’s interpretation of a key part of the No Surprises Act — how the Qualifying Payment Amount (QPA) should be used in the Independent Dispute Resolution (IDR) process.  In the Interim Final Rule (IFR) issued in October that provided detail on the No Surprises Act’s IDR process, the administration required arbitrators to place higher importance on the QPA —  a plan’s median contracted rate — than the other factors for consideration that are included in the NSA.

The Texas Medical Association (TMA) filed a lawsuit in late October arguing that arbitrators should consider other factors listed in the NSA, such as the doctor’s experience, the number of other providers in the market, and the severity of the patient’s illness, with equal weight. TMA argued that the NSA itself set forth a list of factors for consideration by the IDR Entity, and did not privilege the QPA over the other factors.  Therefore, TMA argued, the administration’s requirement in the October IFR that IDR Entities must consider the QPA as the primary factor conflicted with the law.

The Court’s decision

In its decision on February 23, the Court agreed with TMA. The Court found that the NSA clearly established the factors to consider during IDR, noting that this language from the law itself is unambiguous in requiring IDR Entities to evaluate the QPA and the other listed factors:  “[IDR Entities] shall consider… the qualifying payment amounts … and … information on any circumstance described in clause (ii).” Clause (ii) lists those additional factors that the IDR Entity should consider, like patient acuity, market share of the provider, the doctor’s level of training or experience.  The Court concluded that the NSA “plainly requires arbitrators to consider all the specified information in determining which offer to select.”

The Court struck from the regulations only the language related to the use of QPA as the primary factor for consideration during IDR. The rest of the regulations issued by the administration, and the NSA itself, remain in effect. While it is possible that the government may appeal this decision, for now IDR Entities must consider the QPA alongside the other factors listed in the law, if they are included with the final offer(s) submitted.

The decision is effective not only in Texas but nationwide.

MultiPlan will continue to monitor the situation closely. 

The case

The case is Texas Medical Association et al v U.S. Department of Health and Human Services et al, in the US District Court for the Eastern District of Texas.

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes. If you have questions about how The No Surprises Act applies to your organization, please consult your legal counsel.