A federal judge dismissed Blue Cross Blue Shield of Texas’ lawsuit accusing medical billing company Zotec Partners of abusing the No Surprises Act’s independent dispute resolution process. In a Sept. 23 ruling, the judge found the court lacks jurisdiction to review IDR decisions.
The U.S. District Court for the Eastern District of Texas in Texarkana dismissed all five of the insurer’s claims with prejudice, according to court documents reviewed by Becker’s.
BCBS Texas is a division of Chicago-based Health Care Service Corp. It filed the lawsuit Dec. 18, alleging Zotec initiated thousands of IDR disputes that were not eligible for arbitration.
Judge Robert Schroeder ruled that the No Surprises Act’s bar on judicial review covers eligibility decisions, not just payment determinations. He also found the insurer’s claims amounted to an impermissible collateral attack on binding IDR awards. That included a fraudulent inducement claim tied to settlement agreements. Congress gave eligibility and payment decisions to IDR entities rather than courts, he wrote.
The judge relied on his May 22 ruling, which dismissed a nearly identical BCBS Texas lawsuit against billing company HaloMD. He wrote that the insurer’s central complaint, that the IDR process is unfair and inefficient, is for Congress to fix.
Ed Gaines, Zotec’s vice president of regulatory affairs, praised the court’s decision in a LinkedIn post.
“The support of the physician, IDR and RCM community against the health plans’ litigation tactics has been vital to the outstanding success achieved by the community to date,” he said in the post.
The decision adds to a string of federal court dismissals of payer lawsuits over alleged IDR abuse.
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