Medical Technology

AHA, AMA Sue Federal Government Over Surprise Billing Law

Thursday’s announcement by physician and hospital groups was a formality. They are suing the federal government for its plan to resolve the issue of medical bills that surprise you. This plan tilts toward using the rates currently in use for services.

The American Hospital Association and American Medical Association (AMA), announced that they will petition the US District Court for District of Columbia to block certain provisions of federal rules regarding surprise bills from being implemented. This court is often used to challenge federal regulations. Renown Health, UMass Memorial Health and two North Carolina-based physicians, AHA, and AMA are also part of the suit.

Federal agencies, including the Department of Health and Human Services (HHS) in September had unveiled the rules on unexpected medical bills that will take effect on January 1st.

Under this rule, a key reference point for disputes involving payments will be the qualifying payment amount (QPA) that is based on the median contract rate. In the dispute-resolution process outlined in the rule it is presumed that the QPA is the appropriate out-of-network rate.

The rule allows for exceptions where the independent mediating entity handling the dispute resolution process has “credible information” about the reason the QPA is substantially different from the out-of-network rate, as Medscape previously reported..

According to the federal agencies that issued the rule, this approach “encourages predictable outcomes,” which likely would reduce the number of disputes that go through the resolution process while also “providing clear and fair standards” for cases to be able to depart from QPA. HHS was joined in releasing the rule by the Treasury and Labor Departments and the Office of Personnel Management.

AMA and AHA are not in agreement with this viewpoint and view this method as a benefit for insurers at the expense of doctors and hospitals.

In a press release they stated that the rule’s approach of surprise billing would “all but ensure that hospitals, physicians and other providers will routinely be undercompensated by commercial insurers, and patients will have less options to access services that are in-network.”

The rule is part of the implementation of a federal law known as “The No Surprises Act” which was enacted in December of 2020. In their statement, AHA and AMA said their legal challenge will not stop “core patient protections” under the law from being implemented.

Rick Pollack, AHA president/chief executive, stated that patients shouldn’t be afraid of receiving a surprise medical invoice. Hospitals and health care systems supported the No Surprises Act to protect patients from being involved in disputes between providers and insurance companies. Congress carefully crafted the law in a fair approach that is patient-friendly and should be implemented as intended.”

Gerald E. Harmon, MD President of the AMA The AMA President, Gerald E. Harmon, MD, has stated that the surprise billing approach could result in “unsustainable situations for physicians.”

Harmon said that “our legal challenge demands regulators to ensure that there’s an effective, fair and meaningful process for settling disputes between healthcare providers and insurance companies.”

AHA and AMA also included a link to an email from November from more than 150 members of Congress who also criticized to the design of the independent dispute resolution process (IDR).

“This directive establishes an de-facto benchmark rate, making it the default factor in the IDR process. This is against the law and could lead insurance companies to set artificially high premium rates, which can restrict provider networks and hinder access to healthcare for patients — the exact opposite goal of the law,” wrote members of Congress, including Rep. RaulRuiz, MD, a California Democrat and Rep. Larry Bucshon MD, an Indiana Republican.

Kerry Dooley Young is a freelance journalist who is based in Washington, DC. She is the core expert on safety concerns for the Association of Health Care Journalists. Young has previously covered health policy as well as the federal budget for the Congressional Quarterly/CQ Roll Call as well as the pharmaceutical industry as well as the Food and Drug Administration for Bloomberg. Follow her on Twitter as @kdooleyyoung.

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