Federal District Court Invalidates Some Surprise Billing Rules: What It Means for the No Surprises Act

On February 23, 2022, the United States District Court for the Eastern District of Texas invalidated portions of Part II of the interim final rule (“IFR”) issued by the U.S. Departments of Health and Human Services, Labor, and Treasury (“Tri-Agencies”), implementing the dispute resolution provisions of the No Surprises Act (“NSA”).  While the ruling in the case, Texas Medical Association v. U.S. Department of Health & Human Services, may impact medical plan costs, it does not substantively affect the consumer protections against surprise medical billing added by the NSA, which took effect in 2022.

As background, Congress enacted the NSA to address “surprise medical bills,” meaning out-of-network charges billed by providers when an individual receives treatment at an out-of-network facility in an emergency situation, or when an individual is treated by an out-of-network provider at an in-network facility.  The NSA prohibits surprise medical billing, establishes a statutory framework for determining the “out-of-network rate” to be paid by a health plan to a provider or facility, and creates an independent dispute resolution (“IDR”) process for health plans and providers to negotiate payment rates after a health plan has paid the provider an initial payment amount for the out-of-network services.