Portions of No Surprises Act IDR Rule Procedures Set Aside by Federal Court Again

On February 8, 2023, for the second time in 12 months, a federal district court has set aside provisions of the No Surprises Act’s Independent Dispute Resolution Final Rule on the grounds that the portions of the rule that provide guidance to arbitrators on how to weight price submissions violate the statute’s requirements.

The decision was issued by U.S. District Judge Jeremy D. Kernodle for the U.S. District Court for the Eastern District of Texas. The suit in question was a group of challenges to the rule, consolidated under Texas Medical Association v. U.S. Department of Health & Human Services (No. 6:22-cv-372).

In the ruling, the court took issue with the prominence of the “qualifying payment amount,” or QPA. The QPA is a statutorily defined payment rate that represents the median contracted rates recognized by an insurer for the same or similar items or services in the same geographic area.

The court vacated specific provisions of the rule related to the method in which arbitrators are supposed to evaluate price claims. Specifically, the court ordered several sections to be vacated and returned back to the agencies for reconsideration. CMS will need to publish a revised/updated rule in response to the court’s decision.

To read the court’s opinion, see here.

To read the original rule, see here.

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