WASHINGTON (December 9, 2021) —The American Hospital Association (AHA) and American Medical Association (AMA), representing hospitals, health systems, and physicians, sued the federal government today over the misguided implementation of the federal surprise billing law. The associations are joined in the suit by plaintiffs including Renown Health, UMass Memorial Health and two physicians based in North Carolina.

The lawsuit challenges a narrow but critical provision of a rule issued on Sept. 30, 2021, by the U.S. Department of Health and Human Services (HHS) and other agencies. The provision being challenged ignores requirements specified in the No Surprises Act and would result in reduced access to care for patients. The rule and this flawed provision are set to take effect Jan. 1, 2022.

The AHA and AMA strongly support protecting patients from unanticipated medical bills and were instrumental in passing the landmark No Surprises Act to protect patients from billing disputes between providers and commercial health insurers.
The legal challenge became necessary because the federal regulators’ interpretation upends the careful compromise Congress deliberately chose for resolving billing disputes. According to the lawsuit, the new rule places a heavy thumb on the scale of an independent dispute resolution process, unfairly benefiting commercial health insurance companies. The skewed process will ultimately reduce access to care by discouraging meaningful contracting negotiations, reducing provider networks, and encouraging unsustainable compensation for teaching hospitals, physician practices, and other providers that significantly benefit patients and communities.

Congress created an independent dispute resolution process that is required when providers and insurers are unable to reach agreement on payment for out-of-network services from providers who are not under contract with the insurer. However, federal regulators have directed arbiters under independent dispute resolution to presume that the median in-network rate is the appropriate out-of-network rate and limiting when and how other factors come into play. The suit argues that the regulations are a clear deviation from the law as written and all but ensure that hospitals, physicians, and other providers will routinely be undercompensated by commercial insurers and patients will have fewer choices for access to in-network services.

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