STATEMENT: Federal judge’s decision on No Surprises Act could mean patients pay more

WASHINGTON —  A new court decision could undermine patient savings related to arbitration of payment disputes between insurers and out-of-network providers. The Eastern District Court of Texas ruled Thursday that certain rules pertaining to the cost-containment arbitration provisions of the No Surprises Act “must be set aside.” The No Surprises Act, which has proven to prevent expensive surprise bills since it took effect on Jan. 1, 2022, earned rare bipartisan support when it passed both houses of Congress in 2020. 

This was the third of four lawsuits brought by the Texas Medical Association (TMA) against some important elements of the No Surprises Act. Through its aggressive litigation strategy in a federal district court in Texas, the TMA, a society with the website tagline “physicians caring for Texans,” is trying to chip away key provisions of the law that protects patients from surprise billing and address over-charges by out-of-network providers like air ambulances. In this case, Air Methods, a privately owned air ambulance company operating across the country, joined TMA as a plaintiff. 

A similar case, brought by the Association of Air Medical Services (AAMS) in the U.S. District Court in the District of Columbia resulted in a different decision earlier this month. The judge there ruled in favor of the arbitration guidelines established in the rules of the No Surprises Act, stating the government’s detailed explanations of its reasoning for its issued arbitration rules were “the very type of well reasoned analysis” that federal rule-making requires.

In response to the court ruling, Patricia Kelmar, U.S. PIRG’s Health Care Campaigns senior director, made the following statement:

“The Texas court is muddying the waters with this decision. It could mean that providers can charge our health plans whatever they want because they can expect few to no guardrails if a dispute reaches the arbitration process. Those of us with health insurance could then bear the burden in higher premiums and cost-sharing.

“We expect our physicians to do no harm, but the Texas Medical Association repeatedly is leading the charge to preserve its ability to hurt patients’ financial well-being when it comes to life-saving emergency services. 

“Patient protections from surprise bills aren’t impacted by this decision. We’ll still be protected from balance bills from out-of-network providers we can’t choose — such as air ambulances responding to a 911 call. But 

Congress intended the No Surprises Act to hold providers to reasonable, market-based prices and the DC court previously upheld the law’s mandates. Continued attacks such as those from the TMA are undermining the part that keeps emergency service providers from charging exorbitant prices.”