US appeals court rules insurers used unfairly low rates in medical billing arbitration

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A highly anticipated No Surprises Act court decision delivered yet another win for providers, finding that the government erred in its instructions for calculating the amounts health insurers typically pay for services.

Tuesday’s decision from the U.S. Court of Appeals for the Fifth Circuit stems from a 2022 Texas Medical Association lawsuit challenging the government’s rule for calculating the qualifying payment amount, a number that’s used in arbitration to represent health insurers’ contracted rates for services. The trade group for doctors had argued that the methodology yielded numbers that were unfairly low, and the court mostly agreed.

The Fifth Circuit sided with providers against the federal government on two of three points: that the QPAs should not include so-called ghost rates, or placeholder rates that providers don’t actually negotiate, and that they should include bonus and incentive payments. It disagreed with air ambulance providers, finding that a one-off price for transporting a single patient should not factor into QPAs.

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