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 non-public proper of motion on events to substantiate an Unbiased Dispute Decision (“IDR”) award in court docket. The Fifth Circuit is the primary United States Courtroom of Appeals to weigh in on the difficulty, which has divided some district courts. On July 11, 2025 the Fifth Circuit denied Appellant’s request for en banc overview of the Courtroom’s discovering that the NSA lacks a non-public proper of motion.[iii] The panel’s ruling is now ultimate 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 meant to be a truncated type of arbitration that may exchange widespread litigation between payers and suppliers over reimbursement of out-of-network claims. IDR is a “baseball type” arbitration, through which suppliers and payers submit competing fee gives to the arbitrator, referred to as a Licensed Unbiased Dispute Decision Entity (“CIDRE”). The CIDRE then selects one of many two gives as the quantity to be paid by the payor to the supplier for the providers at problem. 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 overview besides in a case described in paragraphs (1) via (4) of part 10(a) of title 9.”[v]
However as a substitute 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 in search of 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 difficulty: 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 meant the NSA to ensure them the best 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 overview besides within the restricted situations set forth within the statute, evincing Congress’s intent to foreclose all different types of judicial overview.
The Fifth Circuit issued two opinions on June 12, 2025, holding that the NSA doesn’t present a non-public 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 overview” to the identical extent a celebration to arbitration might search vacatur below the Federal Arbitration Act (“FAA”), the court docket presumed that Congress didn’t intend to supply some other personal proper of motion. Appellants failed to hold their “heavy burden” of displaying in any other case.
- The court docket rejected Appellants’ distinction between judicial overview—which the NSA limits—and judicial enforcement, noting that the Black’s Legislation definition of “overview” included “the best to remand, modify, or vacate any motion.”
- Congress knew the best way to empower the judiciary to substantiate and implement arbitration awards. It has carried out 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, must 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 offered the Division of Well being and Human Companies (“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 shouldn’t be merely the holding that the NSA doesn’t suggest a explanation for motion, however the court docket’s discovering that Congress meant disputes in regards to the IDR course of to be channeled via an administrative course of managed by HHS. Thus, even in jurisdictions not sure 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 in search of aid 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 convey a spinoff ERISA-benefits declare. Appellants additionally sought en banc overview of this holding, which the Courtroom denied.
[iv] Congressional Committee Leaders Announce Shock Billing Settlement | Democrats, Vitality 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 Defend 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)