Following the recent decision in Texas Medical Association v. HHS, ten employer groups came together in a letter to the Biden Administration, explaining the impact of the decision on employers, purchasers, and families and highlighting their continued support for full implementation of the No Surprises Act.

In the letter, the groups highlighted a variety of impacts the Texas court decision could have on our health care system, including variations in arbitration outcomes, an increase in costs that could be passed down to patients, and a perpetuation of market distortions which Congress intended to address with the legislation. The groups close with reiterating the importance of ensuring the final rule of the No Surprises Act retains strong provisions for a clear arbitration process that will protect patients.

Highlights from the letter include:

  • “In the immediate term, we expect the decision will lead to wide variation, and lack of predictability, in arbitration outcomes. Your rule provided detailed and specific guidance to arbitrators on how to weigh various factors in resolving payment disputes. That guidance sought both to generally anchor arbitration decisions around the statutorily defined median contracted rate – effectively, the market rate – for services, unless extenuating circumstances dictate otherwise, and to provide all parties with predictability, minimizing variation in arbitration outcomes.”
  • “Over time, the lack of predictability in arbitration decisions will likely lead to a greater use of arbitration by providers as parties seek to identify which arbitrators are likely to rule in their favor and which factors most impact arbitration decisions. The proliferation of arbitration will increase administrative costs for all parties, most of which will be directly or indirectly passed onto employers, purchasers, and families.”
  • “As you know, nearly half the states in the country implemented surprise billing protections before enactment of the federal No Surprises Act. State-level experience shows the importance of the instructions provided to arbitrators and how those decisions impact long-term cost growth. Laws enacted in New Jersey, New York, and Texas direct arbitrators to consider the offer submitted by the party closest to the 80th percentile of billed charges (already a highly inflated figure).”
  • “Ultimately, the court decision creates a disincentive for providers to join carrier networks, perpetuating the market distortions Congress intended to correct and eliminating the savings the Congressional Budget Office forecast for the legislation.”
  • “We believe that the IFR’s rules establishing the market rate as a starting point for arbitration decisions are not only legal, but are absolutely vital to rectifying a distorted market and avoiding the inflationary scenario described above. We understand that you are working to finalize the regulations at issue in these cases and we urge you to ensure the final rules retain strong provisions providing a predictable, clear arbitration process in which the local market rate is a prominent consideration.”

To view the full letter, click here.