Skip to main content

CMS Suspends Surprise Billing Arbitration Following Federal Judge's Ruling

Analysis  |  By Jay Asser  
   August 09, 2023

The court invalidated the federal government's federal fee increase and batching restrictions as part of the No Surprise Act.

CMS has once again paused the independent dispute resolution (IDR) process for out-of-network bills after a Texas judge struck down portions of the No Surprise Act to side with providers in the latest chapter of a back-and-forth saga.

Judge Jeremy Kernodle for the Eastern District of Texas ruled in favor of the Texas Medical Association (TMA) by vacating an increase in administrative fees for arbitration processes from $50 to $350, as well restrictions on "batching" related claims for resolution in a single arbitration proceeding. Kernodle, however, didn't grant TMA's requests for a refund of previously paid fees and an extension of the IDR deadline.

This marks the second time CMS has had to suspend the IDR process this year—the first coming in February when Kernodle vacated the revised process, saying it unfairly favored payers. TMA has now challenged the law four times and expressed satisfaction with latest ruling.

"While the court declined to provide deadline extensions and certain other requested relief, we remain pleased with the overall outcome," Rick Snyder, TMA president, said in a press release. "Yesterday's decisions on batching rule provisions and administrative fees will aid in reducing barriers to physician access to the law’s arbitration process, which is vital to both patient access to care and practice viability."

While CMS reviews the court's decision and evaluates updates to the IDR process, the ruling is a win for revenue cycle leaders' bottom line. The 600% price hike was putting providers in the difficult position of deciding whether disputing a payer's payment was worth the increased fee.

The reason for the fee hike was attributed by the federal government to the increase in volume of IDR cases. CMS recently published a status update that showed a total of 334,828 billing disputes had been filed, nearly 14 times more than initially expected.

Jay Asser is the contributing editor for strategy at HealthLeaders. 


The federal government lost another lawsuit taking aim at the independent resolution process (IDR) in the No Surprise Act, with Texas judge Jeremy Kernodle ruling in favor of the Texas Medical Association.

Kernodle vacated an increase in administrative fees from $50 to $350 and restrictions on batching related claims, which were put in place to combat an influx of cases.

As a result of the ruling, CMS has again halted the IDR process again for the second time this year, with the first coming in February.

Get the latest on healthcare leadership in your inbox.