Federal court strikes down part of HHS surprise billing rule


OASHINGTON— A federal court on Wednesday overturned the Biden administration’s interpretation of a controversial part of federal law banning surprise medical bills.

Health care providers have filed several lawsuits challenging how the Department of Health and Human Services created a mediation process for hospitals, doctors and insurers to resolve disputes over out-of-network medical bills.

A Texas federal court judge sided with the Texas Medical Association, a professional association representing more than 55,000 physicians, and ruled that HHS was wrong in its decision to ask mediators to grant the rates of insurers and service providers with whom they had contracted in the past an additional weight compared to other factors. .


“This ruling is an important step toward restoring the fair and balanced process that Congress has enacted to resolve surprise billing disputes between health insurers and physicians,” said Diana Fite, outgoing president of the Texas Medical Association.

The legal dispute goes to the heart of an issue that rocked Capitol Hill before the law was passed in December 2020 — what specific factors an arbitrator would be allowed to consider in mediating disputes, and how much weight each of those factors should have.


Lawmakers involved in drafting the bill are split on whether they think the Biden administration interpreted the law correctly. Senate Health Committee Chair Patty Murray (D-Wash.) and House Energy & Commerce Chairman Frank Pallone (DN.J.) said they believed the Biden administration’s interpretation was correctbut Ways & Means President Richard Neal (D-Mass.), Rep. Kevin Brady (R-Texas) and a bipartisan group of 152 other lawmakers who prefer the more physician- and hospital-friendly approach argued that lawmakers intended that all factors have the same weight.

Pallone tweeted late Wednesday that the Texas court ruling “ignored the clear letter and intent” of the law unsurprisingly, and wrote that the lawsuit would jeopardize patient protections and increase costs for consumers.

The patient protections in the law went into effect in January, but mediations between insurers and providers have yet to begin. The patient protections were not overturned by the Texas judge.

The American Hospital Association and the American Medical Association also filed a separate lawsuit, and no decision has been made in that case.

HHS did not immediately respond to a request for comment.


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