Court Rules on TMA III Lawsuit Invalidating NSA QPA

On August 24, 2023, U.S. District Judge Jeremy D. Kernodle of the Eastern District of Texas issued a ruling that marked the fourth victory for the Texas Medical Association (TMA) in its legal pursuits against certain provisions of the NSA.

In this case, the TMA, alongside co-plaintiffs, argued that the regulations implemented to determine the Qualifying Payment Amount (QPA), defined as the median in-network contracted rates for a given medical item or service conflicted with the statutory language set forth in the No Surprises Act. TMA had argued that the way the QPA was calculated reduced overall reimbursements to out-of-network providers. 

In light of the concerns expressed by TMA, the Court vacated certain provisions under the NSA, including the use of ‘ghost rates’ and out-of-specialty rates in the calculation of the QPA and allowing self-insured plans to aggregate all plans under the same claims administrator for purposes of calculating the QPA. The Court also held that the rules allowing insurers to delay processing a claim until a ‘clean claim’ is submitted violated the statutory language that a denial or payment must be issued with 30 days of claim submission. Pending the issuance of updated guidance, the Departments have temporarily paused filing of claims with the arbitration portal. CMS has previously appealed this Court’s decision in TMA II and could seek legal review of this decision as well.  

The Court’s ruling has several impacts on the administration of claims under the NSA. First, patient cost-sharing is based on the QPA. It is unclear how patient cost sharing will be calculated pending guidance from CMS. Further, IDR entities have evaluated the QPA as part of the IDR arbitration process and the Court has now ruled those QPA calculations to be invalid for claims already determined under the NSA. Additionally, it is unclear what rights providers will have for those claims that were not processed within 30 days of claim submission. While suggestions were made to rely on the current QPA calculation for patient cost sharing and allow for IDR determinations to be made without considering the flawed QPA calculation, CMS has yet to provide guidance on how to resolve these important issues. 

The TMA III decision follows the decision in TMA IV on August 3, 2023 where the Court set aside the increase of the administrative fee to $350 per filing. Subsequent to that decision, CMS had also paused the IDR process. Shortly after, CMS announced that the administrative fee would be set back to $50 per claim and the IDR portal became active again for many claims. Given the role that the QPA plays under the NSA, we would hope for CMS to act quickly in providing guidance in balancing the NSA as intended by the multiple Court decisions in favor of out of network providers and removing the current pause in the IDR process from the TMA III decision. 

We are committed to keeping you informed about developments under the NSA as they unfold. Should you have any questions or require further information, please do not hesitate to contact our offices.


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