FOR IMMEDIATE RELEASE

August 6, 2024

+1 (202) 823-2333

media@action4health.org

WASHINGTON — On Friday, the Fifth Circuit upheld the Eastern District of Texas' decision in February 2023 ("TMA II") that vacated unlawful No Surprises Act regulations for how certified independent dispute resolution entities (IDREs) must prioritize factors and give undue preference to the qualifying payment amount (QPA) in their arbitration determinations.

In its long-awaited ruling, the Circuit Court affirmed that, when IDREs (i.e., arbitrators) are considering the value of out-of-network services for a claim brought to the No Surprises Act's IDR process, they cannot be directed by the government to give preferential weight to health insurance companies' median in-network rate (i.e., the QPA).

This is a tremendous victory not only for physicians, hospitals, and facilities, but also for their patients who are bearing the brunt of healthcare consolidation. This consolidation is being driven by large health insurance companies and their unlawful IDR practices.

In denying the government's appeal, last week's ruling is also the fifth-straight No Surprises Act win for the Texas Medical Association (TMA) against the Departments of Health and Human Services, Treasury, and Labor, and the Office of Personnel Management in federal court.

Action for Health President Christopher Sheeron stated:

"We congratulate TMA on this huge win and commend its rigorous and continued defense of physicians and their patients nationwide. Since we filed our amicus brief in support of TMA I in December 2021, we have been closely following all litigation concerning the No Surprises Act. This significant loss for the government reinforces what we, and many other stakeholders, have been saying for a long time—these regulations are deeply flawed, and they must be fixed immediately. We applaud the Fifth Circuit's decision, and hopefully now the Departments will finally wake up."

Key excerpts from the Circuit Court's ruling:

• "By telling the arbitrators that they must consider the QPA before all other factors, the Departments place a thumb on the scale in favor of the insurer-determined QPA in derogation of the other congressionally mandated factors. It would distort the statutory scheme for the Departments to impose such an extrastatutory requirement here."

• "Congress imposed on the arbitrators a mandatory duty to consider all the factors listed in the statute, giving preference to none. The Departments’ not-so-subtle attempt to prevent the arbitrators from considering some of them in some cases thus violates the express, unambiguous terms of the Act."

• "The Rule exceeds the Departments’ authority because it imposes three extrastatutory requirements on arbitrators: (1) the arbitrators must consider the QPA first and “then” the other factors; (2) the arbitrators must not consider information that is not “credible” or “related to” the issue, or that is already accounted for in the QPA; and (3) the arbitrators must explain their reasons if they depart from the QPA."

Action for Health is a national non-profit advocacy organization working to ensure fair outcomes for critical healthcare issues. The organization educates policymakers, the media, and concerned citizens about policies, laws, and regulations that are important to patients.

Action for Health | +1 (202) 823-2333 | media@action4health.org | action4health.org