On June 12, 2025, the Fifth Circuit dominated in Guardian Flight I[i] and Guardian Flight II[ii] that the No Surprises Act (“NSA”) doesn’t confer a personal proper of motion on events to substantiate an Impartial Dispute Decision (“IDR”) award in court docket. The Fifth Circuit is the primary United States Courtroom of Appeals to weigh in on the problem, which has divided some district courts. On July 11, 2025 the Fifth Circuit denied Appellant’s request for en banc evaluate of the Courtroom’s discovering that the NSA lacks a personal proper of motion.[iii] The panel’s ruling is now last and controlling precedent for the Fifth Circuit until overturned by the Supreme Courtroom.
The NSA was handed to “promote equity in fee disputes between insurers and suppliers.”[iv] IDR was supposed to be a truncated type of arbitration that might exchange widespread litigation between payers and suppliers over reimbursement of out-of-network claims. IDR is a “baseball fashion” arbitration, during which suppliers and payers submit competing fee provides to the arbitrator, often called a Licensed Impartial Dispute Decision Entity (“CIDRE”). The CIDRE then selects one of many two provides as the quantity to be paid by the payor to the supplier for the companies at concern. As soon as the fee award points, it’s “binding upon the events concerned, within the absence of a fraudulent declare or proof of misrepresentation of information introduced to the IDR entity concerned concerning such declare” and “shall not be topic to judicial evaluate besides in a case described in paragraphs (1) by means of (4) of part 10(a) of title 9.”[v]
However as an alternative of simplifying issues, the NSA has spawned intensive litigation over the validity of these IDR awards. Since 2024, suppliers have filed lots of of lawsuits searching for to substantiate arbitration awards that they declare have gone unpaid, arguing the NSA implies a proper for events to substantiate arbitration awards in court docket. District courts have break up on the problem: one court docket within the District of Connecticut[vi] discovered that the NSA certainly does include an implied proper to substantiate awards; courts within the District of Arizona[vii] and the Northern District of Texas,[viii] in distinction, concluded that the NSA doesn’t allow affirmation.
In Guardian Flight I, the suppliers argued that Congress supposed the NSA to ensure them the correct of fee, and that the statutory assure that IDR awards “shall be binding” implies a proper to implement awards in court docket. The Division of Justice and American Hospital Affiliation joined in that argument as amici. The payors argued in response that the NSA proscribes judicial evaluate besides within the restricted situations set forth within the statute, evincing Congress’s intent to foreclose all different types of judicial evaluate.
The Fifth Circuit issued two opinions on June 12, 2025, holding that the NSA doesn’t present a personal proper of motion:
- The NSA’s plain textual content expressly forecloses the existence of an implied proper of motion. As a result of the NSA solely permits for “judicial evaluate” to the identical extent a celebration to arbitration may search vacatur below the Federal Arbitration Act (“FAA”), the court docket presumed that Congress didn’t intend to supply another non-public proper of motion. Appellants failed to hold their “heavy burden” of exhibiting in any other case.
- The court docket rejected Appellants’ distinction between judicial evaluate—which the NSA limits—and judicial enforcement, noting that the Black’s Regulation definition of “evaluate” included “the correct to remand, modify, or vacate any motion.”
- Congress knew methods to empower the judiciary to substantiate and implement arbitration awards. It has executed so in different statutes, and Congress’s resolution to include solely a discrete subsection of the FAA, whereas excluding incorporation of the FAA’s affirmation provisions, needs to be understood as a deliberate alternative.
- The court docket was not persuaded that the NSA’s goal can be annoyed with out a capability to implement IDR awards. Congress supplied the Division of Well being and Human Providers (“HHS”) with the facility to levy civil cash penalties towards payers and suppliers that violate the NSA, a coverage alternative that the court docket wouldn’t second guess.
Noteworthy about Guardian Flight is just not merely the holding that the NSA doesn’t suggest a reason for motion, however the court docket’s discovering that Congress supposed disputes concerning the IDR course of to be channeled by means of an administrative course of managed by HHS. Thus, even in jurisdictions not certain by the Fifth Circuit’s principal holding, this facet of Guardian Flight could lend assist to arguments that suppliers should on the very least first exhaust their administrative treatments earlier than searching for reduction in court docket, whatever the deserves of the reason for motion.
[i] Guardian Flight, L.L.C. v. Well being Care Serv. Corp., No. 24-10561, 2025 WL 1661358 (fifth Cir. June 12, 2025)
[ii] Guardian Flight, L.L.C. v. Med. Evaluators of Texas ASO, L.L.C., No. 24-20051, 2025 WL 1661357 (fifth Cir. June 12, 2025)
[iii] The Fifth Circuit moreover held that the Suppliers lack standing to carry a by-product ERISA-benefits declare. Appellants additionally sought en banc evaluate of this holding, which the Courtroom denied.
[iv] Congressional Committee Leaders Announce Shock Billing Settlement | Democrats, Power and Commerce Committee
[v] 42 U.S.C. § 300gg-111(c)(5)(E).
[vi] Guardian Flight LLC et al. v. Aetna Life Ins. Co. et al., 3:24-cv-00680, 2025 WL 1489603 (D. Conn. 2025)
[vii] FHMC LLC v. Blue Cross and Blue Protect of Ariz. Inc., No. CV-23-00876, 2024 WL 1461989 (D. Ariz. 2024)
[viii] Guardian Flight LLC and Med-Trans Corp., v. Well being Care Svc. Corp., 735 F.Supp.3d 742 (N.D. Tex. 2024)