Texas Rules Against Ghost Rates in NSA Regulations

On August 24, the United States District Court for the Eastern District of Texas ruled mostly in favor of physicians and health care providers in the “Texas Medical Association (TMA) III” decision related to the implementation of the No Surprises Act (NSA). This case primarily challenged the federal government’s rules guiding insurers in calculating their Qualified Payment Amount (QPA). The flawed rules permitted insurers to deflate their QPAs which crippled physicians and small practices asking for fair payment rates. This is a significant win for physicians and especially anesthesiologists. The court ruling halts the use of “ghost rates” (rates that were never negotiated nor used but are present in contracts) and insurers’ exclusion of bonuses and incentives from QPA calculations. Here are the details:

The court found the following provisions unlawful and rescinded them nationally: 

1. Including in the calculation of QPAs contracted rates for services that providers have not provided.
2. Including in the calculation of QPAs out-of-specialty rates.
3. Excluding from the calculation of QPAs risk sharing, bonus, penalty, or other incentive-based or retrospective payments or payment adjustments.
4. Allowing self-insured group health plans to use rates from all plans administered by a third-party administrator in calculating the QPA.
5. Starting the 30-day deadline for notice or denial of payment when the insurer receives the information “necessary to decide a claim.”

This is the last of the four cases that the TMA brought before the court. As a result of this ruling and TMA IV’s ruling, we expect new rules to be amended/drafted to follow the court’s decision. Government appeals of the rulings are also possible. ASA filed amicus briefs in support of both TMA III and IV.