Appeals court upholds ruling against certain No Surprises Act provisions; 5th Circuit invalidates regulations on how arbitrators weigh qualifying payment amount in disputes

The 5th Circuit Court of Appeals Aug. 2 affirmed a district court's decision to set aside certain regulations implementing the No Surprises Act. In particular, the decision invalidates regulatory provisions governing how arbitrators are to weigh the qualifying payment amount in arbitration proceedings.   

“[N]othing in the Act instructs arbitrators to weigh any one factor or circumstance more heavily than the others, nor does the Act authorize the Departments to superimpose regulatory rules on the clear statutory mandate,” the 5th Circuit explained. “The Final Rule therefore exceeds the Departments’ authority.” Also using language that the AHA repeatedly offered in its briefing, the court of appeals held: “By telling the arbitrators that they must consider the QPA before all other factors, the Departments place a thumb on the scale in favor of the insurer-determined QPA in derogation of the other congressionally mandated factors. It would distort the statutory scheme for the Departments to impose such an extrastatutory requirement here.”

The AHA had long advocated for this position, including in an amicus brief in 2022 and a lawsuit against federal agencies in 2021.