Judge rejects New York doctor's challenge to surprise billing ban

A French general practitioner in a doctor's office in Bordeaux. REUTERS/Regis Duvignau
  • Doctor claimed law violated Fifth, Fourteenth amendments
  • Major medical groups' separate challenges remain pending in Washington

(Reuters) - A New York doctor has lost a challenge to the recently enacted federal law prohibiting surprise medical bills for out-of-network services.

U.S. District Judge Ann Donnelly in Brooklyn late Wednesday denied surgeon Daniel Haller's motion for an injunction blocking the law, which took effect in January, and dismissed his lawsuit claiming that it is unconstitutional.

The U.S. Department of Health and Human Services and a lawyer for Haller did not immediately respond to requests for comment.

The No Surprises Act was passed in 2020 to protect patients from surprise billing for care from providers outside their insurers' network. Such bills often arose when patients sought care at an in-network hospital, but unknowingly received care from an out-of-network provider such as an anesthesiologist.

Insurers pay a much lower share of the cost of out-of-network providers than in-network providers. Before the No Surprises Act, providers typically billed patients for the balance of the cost.

Under the No Surprises Act, providers cannot bill patients who receive emergency services from out-of-network providers, or non-emergency services from out-of-network providers at in-network facilities without their consent, any more than they would bill for in-network services.

It is then up to the insurer and the provider to negotiate a payment. If they cannot agree, the law creates an independent dispute resolution process.

According to his December 2021 complaint, Haller and his practice provide emergency consultations and surgeries for patients admitted to hospitals. Haller said he is out-of-network for about 78% of those patients.

He alleged that the No Surprises Act is an unconstitutional taking under the Fifth Amendment of the U.S. Constitution, and violates his right to due process under the Fourteenth Amendment, by depriving him of his interest in reasonable payment for services.

Donnelly, however, found Haller was unlikely to succeed in his lawsuit because the law "gives providers a right to recover the value of the services provided directly from insurers and creates a process to adjudicate that right."

Furthermore, the judge wrote, an injunction would go against the public interest identified by Congress in protecting patients from surprise bills.

Separate lawsuits are pending in Washington, D.C., federal court by the American Medical Association, American Hospital Association and Association of Air Medical Services, an air ambulance group, claiming that the regulations governing the law's independent dispute resolution process unfairly favor insurers.

The case is Haller et al v. U.S. Department of Health and Human Services et al, U.S. District Court, Eastern District of New York, No. 1:21-cv-03231.

For Haller: Robert Spolzino of Abrams Fensterman and others

For the government: Anna Deffebach of the U.S. Department of Justice Civil Division and others

Read more:

Surprise surgery bills happen even when patients plan ahead

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Brendan Pierson reports on product liability litigation and on all areas of health care law. He can be reached at brendan.pierson@thomsonreuters.com.