Sidley represented the Texas Medical Association (TMA) in a challenge under the Administrative Procedure Act to certain regulations issued by the U.S. Departments of Health and Human Services, Labor, and the Treasury to implement the No Surprises Act (NSA). The NSA bars providers from balance billing patients for certain services but offers providers an opportunity to use an independent dispute resolution (IDR) process to seek fair reimbursement for their out-of-network services. TMA challenged the federal agencies’ implementation of this arbitration process. In particular, the complaint alleged that the federal agencies’ implementing regulations unlawfully commanded arbitrators to presume that a particular metric, called the qualifying payment amount (QPA), is the correct reimbursement rate for out-of-network services. Instead, TMA argued, the statute envisions that arbitrators must consider a variety of relevant factors and exercise their own discretion in determining the appropriate weight to give to each.
The court agreed with Sidley’s clients that the federal agencies lacked statutory authority to create a rebuttable presumption in favor of the QPA, and that the agencies had unlawfully skipped advance notice and comment before imposing that unlawful presumption. Because, as the court explained, “there is nothing the Departments can do on remand to rehabilitate or justify the challenged portions of the Rule as written,” the court vacated those provisions of the agencies’ regulations, effective immediately. IDR proceedings are set to begin in March, and this court victory — which Sidley accomplished on an expedited basis in less than four months — means that arbitrators will begin IDR proceedings without being directed to apply the unlawful rebuttable presumption.
The Sidley team was led by Brenna Jenny (Healthcare partner), Jaime Jones (Healthcare practice global co-leader and partner), Eric McArthur (Supreme Court and Appellate partner), Penny Reid (Commercial Litigation and Disputes partner), Derek Webb (Supreme Court and Appellate senior managing associate), and Joe LoCascio (Healthcare managing associate).
A copy of the decision is available here.
Read additional coverage of the implications of this case in DCEO Magazine.
