Texas Medical Association Files Third Lawsuit Challenging Parts of the No Surprises Act

TMA’s Previous Lawsuits

In February 2022, a federal court in Texas ruled in favor of TMA and struck portions of the October 2021 Interim Final Rule that created a rebuttable presumption in favor of the qualifying payment amount, or QPA (TMA 1). In September, TMA filed a related lawsuit to challenge portions of the August 2022 Final Rule that they argue require arbitrators to consider the QPA first and not give any weight to other factors unless certain criteria are met (TMA 2). A hearing on summary judgment on TMA2 is scheduled for December 20.  Claritev believes the judge is unlikely to rule at the hearing and will instead release a written decision in early or mid-January.

TMA’s November 30 Lawsuit

While the issues in TMA1 and TMA2 primarily focused on how the QPA is used during the IDR process, TMA3 challenges how the QPA is calculated.  Specifically, TMA argues that several July IFR provisions detailing how the QPA must be calculated artificially deflate reimbursement:

• The language used in the July IFR permits plans to include “ghost rates” when calculating QPA. In other words, the rates included for the calculation are not limited to services that are “provided by a provider” as required by the NSA, but may include low rates from providers who do not actually perform those services but have included rates in their contracts, including $0 rates.
• The NSA requires QPAs to be calculated for providers “in the same or similar specialty,” but the July IFR allows plans to include what TMA calls “out-of-specialty rates” when there is not a “material difference” in the median contracted rate of the specialties. TMA argues this introduces into the QPA rates from providers who may occasionally perform a service, but are not motivated to negotiate a true market rate.
• The NSA requires the contracted rates included in the QPA be the total maximum payment, but the July IFR allows plans to use something less than the maximum payment when using risk sharing, bonus, penalty, or other incentive-based payments. TMA argues that the true total rate should include any risk-sharing, bonus, incentive, or other retrospective increased amount paid to the provider.
• The NSA requires the QPA to be determined for the plans of each sponsor but the July IFR’s rule allows TPAs to include contract rates from all of its self-insured group plans to calculate QPA.

TMA also notes that the QPA is calculated by plans in isolation and secrecy, which puts providers at a disadvantage in the negotiation and IDR process. TMA argues the July IFR’s requirements for plans to disclose how QPA was calculated are “minimal” and insufficient for the providers to determine whether the QPA was correctly calculated*.  Without more information on how QPA is being calculated, TMA argues that the complaint process for providers to flag non-compliant plans to the administration is meaningless.

Why is this important?

The new lawsuit argues that portions of the July IFR puts providers at a disadvantage by lowering the QPA. Because many plans use the QPA as an initial payment, negotiation ceiling, or an IDR offer, those portions of the July IFR effectively harm providers by lowering their reimbursement rates. 

* When Claritev calculates QPA, we always make an explanation of our methodology available to demonstrate transparency in how we comply.

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes. If you have questions about how the No Surprises Act applies to your organization, please consult your legal counsel.