Summary
The Fifth Circuit Court of Appeals has affirmed the invalidity of regulations governing the independent review process under the No Surprise Billing Rules.
The Upshot
- Out-of-network health care providers challenged the regulations as going beyond the statute and tilting the scales in favor of group health plans and insurers.
- The court’s decision is the latest setback to regulators’ efforts to set rules governing the No Surprise Billing Rules independent review process.
The Bottom Line
As a result of the ruling, health plans may pay more in out-of-network claims. Health plan sponsors should pay attention to the fees that vendors charge for processing claims under the No Surprise Billing Rules.
Attorneys in Ballard Spahr’s Employee Benefits and Executive Compensation Group are available for counsel.
The Fifth Circuit Court of Appeals has upheld a district court decision that vacated regulations on the independent review process under the No Surprise Billing Rules contained in the Consolidated Appropriations Act, 2021 (CAA).
The No Surprise Billing Rules forbid out-of-network providers from charging individual patients more than prescribed cost-sharing amounts for services in certain situations, like emergency room care. The Rules also establish a process for resolving disputes about how much group health plans and insurers must pay for those services. The Texas Medical Association and several other plaintiffs challenged regulations issued jointly by the Departments of Labor, the Treasury, and Health and Human Services that they saw as tilting the scales in favor of health plans and insurers by giving too much weight to the “qualifying payment amount” (determined by the median of the payment amounts negotiated with-in-network providers for the same services in the same geographic area) and not enough to other factors. The court agreed that the regulations were not supported by the text of the CAA.
The decision marks the latest in a string of setback for regulators under these rules. Federal courts in the Fifth Circuit (and particularly in Texas, where disputes regarding the independent review process have been particularly prevalent) have shot down aspects of regulations jointly issued by the Departments of Labor, the Treasury, and Health and Human Services on several occasions in the past. The regulations invalidated by the Fifth Circuit were, in fact, a revised set of regulations reissued after a prior adverse ruling.
The Fifth Circuit’s decision places the matter back before the regulating agencies to determine how they will proceed. In the meantime, the independent review process continues to operate in the absence of clear regulatory guidance.
Although insurers and claims administrators are the ones that must directly comply with the processes under the No Surprise Billing Rules, health plan sponsors need to bear the higher cost in claims that may result from the court’s decision and need to consider the administrative fees that vendors may charge for participating in the No Surprises process.
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