Why the Texas Medical Association is Back in Court Again

The Association has filed a lawsuit against the federal No Surprises Act.

The Texas Medical Association (TMA) is challenging a 600-percent hike in administrative fees for seeking federal dispute resolution in No Surprises Act (NSA) situations.

The Association sought relief by filing a fourth lawsuit in the U.S. District Court for the Eastern District of Texas. The Association is the largest state medical society in the nation, even though Texas is the second-largest state, followed by Alaska, representing more than 57,000 physicians and medical student members.

The hike only applies to out-of-network physicians or providers, and a health plan payor. These situations occur when emergency services are provided by a doctor or healthcare provider outside of the patient’s insurance network, or when out-of-network services are provided at an in-network facility.

The federal agencies set the initial administrative fee at $50, and announced in October 2022 that it would remain at $50 for 2023. Two months later, the agencies announced a 600-percent hike in the fee to $350 beginning in January 2023, “due to supplemental data analysis and increasing expenditures in carrying out the federal IDR (Independent Dispute Resolution) process since the development of the prior 2023 guidance.”

The steep jump in fees will dramatically curtail many physicians’ ability to seek arbitration when a health plan offers insufficient payment for care.

The reason that I know the Texas Medical Association filed this lawsuit is because I recently joined the American Society of Medical Association Counsel (ASMAC). It’s an amazing Association comprised of presidents of state medical associations, all of whom are lawyers trying to protect physicians. Kelly Walla is the vice president and general counsel for the TMA, and she circulated an email letting us know.

TMA claims that the new uptick in administrative fees violates the federal notice-and-comment requirements. I do have a personal question – if the Association is successful and gets the fee requirement eradicated due to notice-and-comment violations, wouldn’t Texas just reinstitute the hike in fees, but allow comments next time? If we really ask ourselves, do the comments matter? Who looks at them, and do they carry any weight?

Since this hike only applies to out-of-network providers, I wonder if, in Texas, the networks are closed. “Closed networks” means that, supposedly, the network has enough providers and it’s not accepting more.

But what network has “enough providers?” If the law states that everyone has the freedom to pick their provider of choice or decide on their access to care, then a closed network would fly in the face of that prospect. I have been successful in fighting “closed networks” in the past, and gaining access to them.

Going back to Texas, the relevant rules include establishing the nonrefundable administrative fee all parties must pay to enter the federal IDR process in the event of a payment disagreement between an out-of-network physician or provider and a health plan, in circumstances covered by the law. The suit lists two radiology groups as plaintiffs: the Texas Radiological Society and Houston Radiology Associated. These groups bill small-value claims, so they will be particularly hurt, because most claims billed are less than $350, according to the suit.

Apparently, the Emergency Department Practice Management Association supports the Association’s lawsuit. The Centers for Medicare & Medicaid Services (CMS) reasoning for the hike is the backlog. But making independent dispute resolution more expensive, when doctors have a right to IDR, is counterintuitive in my opinion. Get more arbitrators. Don’t heighten your fences.

Programming note: Listen to Knicole Emanuel every Monday on Monitor Mondays with Chuck Buck at 10 a.m. EST.