Physicians, hospitals cry foul after court deems No Surprises Act decisions ‘unenforceable’

Physician and hospital lobbying groups are crying foul after a Texas court recently ruled that decisions under the No Surprises Act are “unenforceable.” 

When radiologist and health insurers disagree on payment amounts for out-of-network services, the landmark legislation allows them to settle their differences via arbitration. However, a district court has ruled that—even if a provider prevails in this “independent-dispute resolution” process—there is no private cause of action to enforce the award, the Federation of American Hospitals reported Monday.

FAH, the American Medical Association and others are now urging the U.S. Court of Appeals for the 5th Circuit to reverse the decision. They contend that the ruling was “inconsistent with longstanding interpretations of the law” and “threatens serious harm to providers.” 

“There is no need for an [independent dispute resolution] process—or any of the [No Surprises Act’s] other payment mechanisms—if nothing requires insurers to render payment upon an IDR determination,” FAH, the AMA, the American Hospital Association and the Texas Medical Association wrote in an Oct. 4 court filing. 

“[The district court’s interpretation] gives insurers significant leverage to demand confiscatory discounts from out-of-network providers, as well as to exact across-the-board rate cuts from in-network providers, lest they be kicked out of network and not paid at all,” the groups added later. “Both in- and out-of-network providers will thus find themselves perpetually underpaid or even uncompensated for their valuable services, and patients will lose providers and critical care as a result.”

Under the No Surprises Act, it is typically the radiologist or other provider who seeks payment from insurers, having not received upfront reimbursement for services rendered. If the NSA has no mechanism to force payers to pony up, they’ll be left with zero incentive to “pay providers at all,” the groups contend. 

Allowing the district court’s decision to stand, AMA et al. believe, will adversely impact certain geographies. 

“Rural and other underserved patient populations will bear the brunt of the sea change, losing their access to readily available and personalized care,” the provider groups wrote. “The representative for one emergency physician group serving rural populations explained that after being forced out of network by two of their insurers, his group feared they would have to ‘reduce salaries, reduce physician and advanced practice provider staffing hours, cut positions, or make difficult decisions about what areas we can realistically serve.’ Emergency physician practices in rural and underserved areas may be ‘unable to afford to continue to operate in the areas where patients need them most,’ leaving millions with ‘less access to the lifesaving emergency care they need and deserve.’” 

The AHA/AMA amicus brief was filed as part Guardian Flight vs. Health Care Service Corp. The former, a privately held air ambulance provider based in Utah, filed suit against the latter, which is part of the Blue Cross Blue Shield Association. Guardian previously undertook the independent dispute resolution process with the insurer for 33 separate air transports. However, HCSC never paid the resulting amount, which totaled about $1 million. 

The district court over the summer ruled in favor of the insurer, claiming that patients were not harmed by payer’s inaction. Nor did Health Care Service Corp. violate the Employee Retirement Income Security Act or NSA in failing to issue payment in a timely fashion. 

Attorney Julie Selesnick, senior counsel at Berger Montague, blasted the district court ruling in an August social media post. 

“Truly an awful decision,” she wrote. “Why would an insurer ever pay an IDR award now? Congress needs to amend the NSA to adopt the enforcement provisions of the Federal Arbitration Act—otherwise, this case may render the entire IDR process useless.”

The Department of Labor and DOJ also have filed an amicus brief in support of Guardian Flight and other air ambulance providers, Fierce Healthcare reported Tuesday. Meanwhile, members of the U.S. House introduced radiologist-supported legislation in September that would punish insurers for failing to issue payments following an IDR determination.