On August 3, 2023, Federal District Judge Jeremy Kernodle of the Eastern District of Texas ruled in favor of the Texas Medical Association’s most recent challenges to two recent changes to the No Surprises Act arbitration process.
In this case, Plaintiffs complain that the Departments dramatically increased the administrative fee for participating in the arbitration process, rendering the process cost prohibitive for providers with small-value claims. This problem is exacerbated, Plaintiffs argue, by the Departments’ rule making it difficult to “batch” related claims for resolution in a single arbitration proceeding. Plaintiffs contend that the Departments’ actions—both increasing the fee and restricting batching— violate the Administrative Procedure Act because they were made without notice and comment and are arbitrary and capricious.
[T]he Court concludes that the fee increase and batching rule violate the APA’s notice-and-comment requirement and must be set aside. The Court also concludes that vacatur of these rules is the proper remedy. Plaintiffs, however, have not shown that a refund of previously paid fees or a deadline extension are proper here.
On August 6, 2023, CMS began to react to the Court’s decision. The latest post (August 8, 2023) on the CMS No Surprises Act website reads:
Effective August 8, 2023, the Departments have directed certified IDR entities to resume processing single and bundled disputes initiated in 2022, as well as single and bundled disputes initiated in 2023 where the administrative fees have been paid (or the deadline for collecting fees expired) before August 3, 2023. Additionally, the Departments have directed certified IDR entities to resume processing batched disputes where the IDR entity determined that the batched dispute was eligible and administrative fees have been paid (or the deadline for collecting fees expired) before August 3, 2023. Processing of other disputes remains temporarily suspended.