Litigation Update: AHA, AMA Dismiss Surprise Billing Rule Lawsuit, Plan Further Legal Action

Summary: The American Hospital Association (AHA) and American Medical Association (AMA) filed a motion to dismiss their lawsuit challenging the federal government’s final rule on surprise billing released last year, but cautioned more litigation is pending. The health care lobbying groups say the August 2022 final rule on arbitration still poses concerns for providers.


As reported by Fierce Healthcare, the new legal threat is the latest response from providers who have been dismayed at how the administration has implemented a narrow but critical provision of the No Surprises Act (NSA) that bans surprise medical bills and calls for an arbitration process to handle disputes over an out-of-network charge. The provision challenged implicates the arbitration process for determining fair payment for services by out-of-network providers and effectively upends requirements specified in the NSA.

The AHA and AMA filed their lawsuit in December 2021 claiming misguided implementation of the NSA law and charging the September 2021 rule was too favorable for insurers in the implementation of an arbitration process for handling disputes. The law calls for both insurers and providers to submit their own amounts for the out-of-network charge and a third party chooses one to award as the arbitrator’s final decision.

The NSA was signed into federal law in late 2020 after years of negotiation between health plan insurers, employers and providers. Taking effect January 1 2022, the NSA covers all participants in employer-sponsored health plans and aims to provide protection from surprise medical bills for certain emergency services as well as care received from out-of-network providers at an in-network facility.

The AHA and AMA will be filing amicus briefs in support of the Texas Medical Association in the newly filed case in the Eastern District of Texas captioned Texas Medical Association, et al. v. U.S. Department of Health and Human Services, et al., Case No. 6:22cv00372.

Solution Strategy for Self-Funded Plans

The IDR process added by the NSA triggers a risk for self-funded health plans that use RBP with a network of providers or plans that directly contract with providers and facilities. We believe the most effective way to address NSA legislation, particularly elements of the IDR process, is to adopt a “pure” Reference-Based Pricing (RBP) plan – a strategy designed to moderate costs by establishing a benchmark fee schedule and payment ceiling in lieu of a traditional provider network. Pure RBP plans that do not contract with providers should remain unaffected by NSA because there aren’t any out-of-network claims; nor any determination of a median in-network rate.

Our white paper No Surprises Act: What Every Plan Sponsor Needs to Know serves as a valuable resource for employer-sponsored health plan administrators. It offers benefits professionals guidance regarding the NSA’s provisions and interim final rules – encouraging plan sponsors to respond with an approach that is both strategic and compliance oriented. A dual approach will minimize compliance challenges, reduce cost of coverage for both the employer and employees, and improve both the perceived and actual value of health coverage. (Xanax)

As your partner, aequum helps lower costs, achieve savings and support your plan member experience and success in 2023 and beyond. Please contact us if you have any questions or need support. For more information, visit