April 21, 2023

Newer Surprise Billing Act Implementation Lawsuits Get Day in Court

A Texas federal court heard arguments Wednesday in the “Texas Medical Association (TMA) III” and “TMA IV” cases. The TMA filed these lawsuits in late 2022 and early 2023 to challenge additional federal government actions under the No Surprises Act. The American College of Radiology® (ACR®) is supporting TMA as a friend of the court; ACR filed an amicus brief in both lawsuits with the American Society of Anesthesiologists (ASA) and American College of Emergency Physicians (ACEP).

These cases are separate from, although related to, the “TMA I” and “TMA II” cases in which ACR, ASA and ACEP also are participating as friends of the court. TMA I and II addressed whether the government violated federal law by making the Qualifying Payment Amount (QPA) the primary factor for determining physician reimbursement of services in billing disputes between medical providers and insurers. Although the court ruled for TMA in those cases, the government recently filed an appeal in TMA II.

In TMA III, TMA and ACR maintain that the government published a regulation with a flawed QPA methodology. They contend that the formula unlawfully included ghost rates — rates for services that ACR members and other physicians would not perform — and excluded bonuses and incentives from compensation that insurers use to calculate the QPA.

In TMA IV, physician associations, including ACR, the Texas Radiological Society and a Houston radiology practice, assert that the government wrongly raised the fees to participate in the Independent Dispute Resolution (IDR) process established to resolve billing disputes without giving providers advance notice and an opportunity to comment. Additionally, ACR and the others argue that the IDR regulations illegally impose restrictions on providers to batch claims for their services, except for those with the same insurer and same or similar CPT® code. The government’s limitations on batching effectively preclude radiology practices from submitting many claims to IDR because those claims usually involve amounts that are lower than the fees required to participate in the IDR process.

The court closely questioned lawyers for physicians and the government in both cases. Notably, the court appeared sympathetic to physicians’ contentions that the government failed to give physicians a meaningful opportunity to comment on the significant 600% IDR fee increase over 2022 fees. Since the court decided the first two TMA cases within weeks of arguments, ACR expects that the court will rule on TMA III and TMA IV by early June, if not sooner.

More information about surprise billing and the No Surprises Act is on the ACR website. If you have questions or would like more information, contact Tom Hoffman, JD, CAE, Vice President, ACR Legal.