The No Surprises Act has taken the patient out of the middle of payment disputes between insurers and out-of-network providers, shielding more than 9 million people from unexpected bills since the law was enacted in 2022.<\/p>\n

But\u00a0in the background, providers and payers are fighting over how to set appropriate reimbursement rates in a dozen lawsuits or so that\u00a0could take years to resolve.<\/p>\n

Here’s what to know about the law and the legal challenges the law faces.<\/p>\n

Business News Legal expenses may cost consumers<\/h2>\n
The No Surprises Act prevents providers from billing privately insured patients more than typical in-network out-of-pocket costs for most emergency services, post-stabilization care, non-emergency services and air ambulance care. The law does not cover ground ambulance services.<\/p>\n
While a patchwork of state laws has stopped many surprise bills, most individuals are covered by employer-backed health plans that are beyond the reach of state regulation.<\/p>\n
About 1 in 5 emergency room visits and 16% of admissions to in-network hospitals result in surprise bills from out-of-network anesthesiologists, pathologists, radiologists and other clinicians, according to a 2017 analysis Kaiser Family Foundation.<\/p>\n
The law, in part, aims to lower healthcare costs by reducing health insurance premiums by up to 1%, the Congressional Budget Office estimated in 2019. But those projected savings could decrease depending on the outcome of litigation, the cost of which may trickle down to consumers.\u00a0Meanwhile, the protracted legal battles are straining arbitrators\u00a0and physicians while they wait for more guidance\u00a0as the Health and Human Services, Labor and Treasury departments rework the heavily litigated independent dispute resolution process.<\/p>\n
The federal government is struggling to keep up with a growing backlog of arbitration cases, amassing more than 90,000 disputes from mid-April through September, the latest data show.\u00a0Providers are missing out on potential revenue as they wait for settlements. Pending lawsuits could upend the entire process.<\/p>\n
The litigation has saddled the system with additional administrative costs that will likely get passed on to the consumer, said Loren Adler, associate director of the USC-Brookings Schaeffer Initiative for Health Policy.<\/p>\n
\u201cIt is unnecessarily adding bureaucracy and administrative costs to the system,\u201d he said. \u201cThese administrative costs will largely flow to consumers in the form of increased premiums.\u201d<\/p>\n

Business News Texas lawsuits\u00a01 & 2<\/h2>\n
The Texas Medical Association, which represents more than 55,000 physicians, has filed four lawsuits challenging the law.<\/p>\n
The first two suits focus on how much emphasis a third-party mediator should place\u00a0on the qualified payment amount, which is the median rate insurers pay for a service in a particular market. A February 2022\u00a0 ruling<\/a> in the initial lawsuit<\/a>\u2014filed in the U.S. District Court for the Eastern District of Texas in October 2021\u2014validated the association’s\u00a0argument that there was too much emphasis on the qualified payment amount, a dynamic that tipped negotiations in insurers\u2019 favor.\u00a0<\/p>\n
In August, the federal government issued a final rule\u00a0stating that arbiters don\u2019t have to choose the offer closest to a median contracted rate. In a second\u00a0lawsuit filed in December in the same court, the association argued that the arbitration process still unjustly favors insurers. Judge Jeremy Kernodle again sided with the association<\/a>, vacating parts of the law related to arbitration.<\/p>\n
The ruling means HHS and the Labor and Treasury departments must again rework the dispute resolution process, which is meant to serve as a backstop when providers and insurers can\u2019t agree on appropriate pay for out-of-network care. The agencies have until early April to file an appeal.\u00a0<\/p>\n
On Feb. 27, the Centers for Medicare and Medicaid Services restarted the dispute resolution process for services provided before Oct. 25, 2022. Payment determinations for services provided after Oct. 25 are on hold until the federal agencies offer more guidance.<\/p>\n
\u201cHow long that is going to be, no one knows,” said Dr. Rich Heller, associate chief medical officer for communications and health policy and national director of pediatric radiology at Radiology Partners, a national physician practice based in El Segundo, California. \u201cIt is taking an exorbitant amount of time to go through the process, holding up the cash flow for medical practices. Even if (physicians) do prevail, in the end they still lost time.\u201d<\/p>\n
After Kernodle\u2019s rulings, the Georgia College of Emergency Physicians, American Medical Association, American Hospital Association and the American Society of Anesthesiologists voluntarily dismissed their lawsuits.<\/p>\n
The federal government may choose to issue a new rule and\/or additional guidance in place of an appeal. But if nothing is issued or an appeal drags out, the arbitration process will remain complex and take longer,\u00a0said Harvey Rochman, a partner at the law firm Manatt, Phelps & Phillips.<\/p>\n

Business News Texas lawsuits\u00a03 & 4<\/h2>\n
The Texas Medical Association also filed two\u00a0lawsuits involving the calculations used to determine\u00a0the qualified payment amount and the administrative fee hikes related to the independent resolution process. Those cases also will be heard by <\/strong>Kernodle, an appointee of former President Donald Trump.<\/p>\n
One suit, filed in November, alleges\u00a0that the qualified payment amount calculations are flawed and the\u00a0amounts include so-called \u201cghost rates,\u201d or contracted rates for specialized services that providers rarely or never provide. The qualified payment amounts also factor in rates of providers who are not in the same or a similar specialty, the association alleges.<\/p>\n
In addition, the association alleges that federal agencies instruct insurers to use an amount lower than the total maximum payment when a contracted rate includes incentive-based and retrospective payments, violating the law. It also alleges the qualified payment amount calculations do not determine the amount based on each plan sponsor, instead bundling the rates for all group health plans administered by the same entity.<\/p>\n
If the association prevails and federal agencies must vacate the qualified payment amount methodology, it could inflate patients\u2019 out-of-pocket costs, said Zachary Baron, an associate director of the Health Policy and the Law Initiative at Georgetown University\u2019s O’Neill Institute.\u00a0The higher the agreed rate is, the smaller the savings via reduced premiums, he said.<\/p>\n
A fourth lawsuit filed by the association on Jan. 30\u00a0challenges the $50 to $350 administrative fee hike related to the dispute resolution process. Providers are encouraged to bundle multiple cases in a single dispute. But\u00a0the regulatory guidance makes it difficult to combine more than two claims in a single dispute, the association argues.<\/p>\n
Hearings on both suits are scheduled for April 19.<\/p>\n
Business News Air ambulance lawsuits<\/h2>\n
Air ambulance provider LifeNet sued the federal government over the No Surprises Act\u00a0three times. The most recent suit, filed in December, largely mirrors the association’s allegations regarding the qualified payment amount\u2019s methodology. The case was consolidated with the association’s third lawsuit that\u2019s set for a hearing April 19.<\/p>\n
In addition to the similar allegations, the company argues\u00a0that insurers can manipulate arbitration by delaying an initial payment. The government made the geographic regions for related contracted rates too broad, LifeNet argues.<\/p>\n
LifeNet\u00a0also alleges the regulatory guidance unlawfully excluded case-specific contract agreements between out-of-network providers and insurers. And the company\u00a0challenges\u00a0the requirement that air ambulance companies must file two separate dispute resolution processes, one for the initial base rate and one for the per-mile cost.<\/p>\n
LifeNet\u2019s\u00a0lawsuit related to the independent dispute resolution process was consolidated with the association’s\u00a0second case, <\/strong>which providers won.<\/strong>\u00a0LifeNet also won its first suit, filed in September 2021, that sought to vacate parts of the arbitration process, similar to the Texas Medical Association’s initial case.<\/p>\n
Several other air ambulance cases are in the mix. The Association of Air Medical Services filed a lawsuit in a Washington, D.C., federal court against the government on Nov. 16 challenging the qualified payment amount methodology. A decision is expected soon.<\/p>\n
Air ambulance company Med-Trans Corp. filed a lawsuit against an insurance company in Florida federal court in October after it lost an arbitration case. A hearing is scheduled for May 16.<\/p>\n
Air ambulance company\u00a0PHI Health filed a lawsuit in Kentucky federal court against the federal government in April, seeking to vacate parts of the regulatory guidance related to patient cost-sharing, the\u00a0qualified payment amount methodology and independent dispute resolution process. The company argues that insurers hold too much power in the arbitration process. The case is pending.\u00a0<\/p>\n
Business News A major exception<\/h2>\n
One looming lawsuit could\u00a0upend the entire law.<\/p>\n
Dr. Daniel Haller, a general surgeon in Rockville Centre, New York, lost his December\u00a02021 lawsuit\u00a0challenging the constitutionality of the No Surprises Act. He appealed the decision and initial briefings are due later this month.<\/p>\n
\u201cIf that lawsuit is successfully, it would be tremendously disruptive to the private insurance market and to patients who have benefited from the law,\u201d Georgetown’s Baron said.<\/p>\n
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\n Alex Kacik<\/p>\n","protected":false},"excerpt":{"rendered":"
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Business News Texas lawsuits\u00a01 & 2<\/h2>\nThe Texas Medical Association, which represents more than 55,000 physicians, has filed four lawsuits challenging the law.<\/p>\n