New York judge dismisses surgeon’s lawsuit challenging surprise billing law


A New York federal judge on Wednesday dismissed a surgeon’s legal challenge that sought to roll back key pieces of a federal law that protects patients from surprise out-of-network bills.

Judge Ann Donnelly ruled against the surgeon, finding that the law is constitutional, and dismissed the case for lack of standing and dismissed the surgeon’s request for a preliminary injunction.

Katie Keith, a lawyer and health policy expert at Georgetown University who tracks surprise billing litigation, called the ruling good news for consumers.

The lawsuit threatened to once again expose millions of patients to surprise out-of-network bills, Keith previously said in a Health Affairs report on the litigation.

Daniel Haller, a surgeon, and his private practice filed suit in December against federal regulators alleging that the ban on surprise billing was unconstitutional along with the independent dispute resolution process, the way in which providers and payers are supposed to resolve payment disagreements.

Haller said the law deprives physicians the right to be paid a reasonable value for their services, according to the complaint.

Under the law, physicians and insurers can enter into an independent dispute resolution process to come to an agreement on the payment for services. The process was intended to keep patients out of the middle of these payment disputes.

Haller argued the process favored insurers — not providers.

However, a key part of that process was struck down by a Texas judge, who ruled in favor of providers in February.

Donnelly said Haller and his team did not show that they even went through the arbitration, or IDR, process, “much less that the IDR process resulted in a payment amount below the reasonable value,” according to Wednesday’s opinion.

“At the time of oral argument — almost six months after the Act went into effect — the plaintiffs could not say whether they had participated in the IDR process. They do not allege that the IDR process has caused any concrete harm, so their claims of constitutional injury are speculative,” Donnelly said.

Haller’s practice, Long Island Surgical, and its team of six physicians perform procedures on patients who are admitted after an emergency department visit.

Almost 80% of Long Island Surgical’s patients have an insurance plan that does not have a contractual relationship with the surgical group. In other words, Haller and his colleagues are almost always out-of-network, potentially putting patients at risk of a surprise medical bill.

The No Surprises Act tried to solve this problem, and it bans surprise billing in most cases.

The law aimed to tackle one of the most frustrating issues in healthcare, which could ensnare even savvy patients. Patients could be unknowingly treated by out-of-network providers, and then get bills their insurers refused to pay in full or part, leaving them stuck to pay the remaining balance.

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