STATEMENT: Decision in No Surprises Act case likely to raise costs for health care consumers

Media Contacts

WASHINGTON — A federal judge in Texas ruled Monday against the U.S. Department of Health And Human Services (HHS), in favor of the Texas Medical Association’s (TMA) efforts to eliminate important cost-saving guardrails established in the No Surprises Act.The Act, which went into effect on January 1, 2022, protects insured Americans from surprise medical bills and establishes payment guidelines for arbitrators to use when deciding disputes between out-of-network providers and insurers.

The Texas Medical Association case is one of several legal challenges that medical associations, the American Hospital Association and the air ambulance industry have filed against the No Surprises Act. The arbitration rules, the subject of this case, are key to whether the Act can hold down costs for Americans with health insurance.

In response to the decision, PIRG’s health care campaigns senior director Patricia Kelmar, issued the following statement: 

“This ruling strikes a blow against important cost-savings measures that Congress intended to protect consumer finances when passing the No Surprises Act. The goal of the law was twofold: to protect patients from surprise medical bills and also to impose sensible limits upon the outrageous out-of-network charges billed to our insurance plans. 

“As designed, the law created an arbitration process to hold down costs with guardrails that established reasonable, predictable provider payments based on in-network rates paid to other doctors and hospitals in that community. The judge, by removing those guardrails, has left us with a system that allows out-of-network providers to continue to levy oversized charges. Then, if the insurer doesn’t pay, the provider can run to the arbitration system where there is likely to be wide variation of payment awards. That variability will incentivize providers hoping to win lottery-sized payments to repeatedly try their luck at arbitration, further raising health care costs.”