Federal Court Temporarily Halts Additional Provisions of No Surprises Act IDR Process

October 10, 2023
Hall Benefits Law, LLC

A federal district court has temporarily halted additional provisions of the No Surprises Act independent dispute resolution (IDR) process, which the legislation mandates some out-of-network providers, group health plans, and insurers use to resolve billing disputes. The case is Texas Med. Ass’n v. HHS, 2023 WL 4977746 (E.D. Tex. 2023).

On two previous occasions, the court has set aside portions of U.S. Department of Health and Human Services (HHS) regulations implementing the IDR process. Those cases focused on the weight that the IDR process placed on the “qualifying payment amount.” However, this case involved the fees required to participate in the IDR process during 2023, which increased from $50 to $350 per disputing party. The healthcare provider association argued that the drastic price increase made it cost-prohibitive for providers to pursue low-value claims. An unrelated HHS rule also made it more difficult for providers to compile or “batch” related claims for resolution into a single proceeding, further exacerbating the cost issues.

The healthcare provider association claimed that fee increases and the anti-batching rule violated the Administrative Procedure Act (APA) because HHS enacted them in an arbitrary and capricious manner without any opportunity for required notice or comment. Therefore, the association requested a refund of fees paid in 2023 and an extension of time to initiate new proceedings that providers may have refrained from initiating due to the high fees.

The court invalidated the fee increase and the anti-batching rule, finding that HHS had violated the APA by bypassing its notice and comment requirements. Nonetheless, the court denied the association’s requests for a refund of 2023 fees and an extension of filing time for dispute resolution proceedings that providers had not previously filed. As a result of the court’s decision, HHS announced that it had suspended the IDR process temporarily, including any ability to initiate new disputes, until further notice.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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