On Thursday, June 12, 2025, a panel of the United States Court of Appeals for the Fifth Circuit issued two rulings construing parts of the No Surprises Act (NSA) to limit judicial review of arbitration awards issued under the NSA’s provider/payor dispute resolution mechanism.
The NSA protects patients from surprise bills from out-of-network emergency providers and requires that any billing dispute between provider and payor be resolved in the first instance through a statutory Independent Dispute Resolution (IDR) process, unless there is applicable state law that provides for a process to determine the out-of-network rate for the services provided.
In Guardian Flight, LLC v. Health Care Service Corporation, Case No. 24-10561 (Guardian Flight I), plaintiff air ambulance providers sought judicial enforcement of IDR awards issued under the NSA by bringing claims directly under the NSA as well as derivative claims under ERISA. The district court dismissed the NSA cause of action, holding that the NSA did not contain a private right of action to enforce IDR awards. The district court also dismissed the derivative ERISA claim based on a lack of standing, reasoning that because the NSA shielded patients from any responsibility to pay out-of-network emergency services bills, providers could not assert a derivative claim based on an assignment of benefits received from patients. The Fifth Circuit affirmed both holdings.
In Guardian Flight, LLC v. Medical Evaluators of Texas ASO, LLC, Case No. 24-20051 (consolidated with Case No. 24-20204) (Guardian Flight II), a Fifth Circuit panel addressed an air ambulance company’s suit against the third-party neutral that issued awards under the IDR process. Plaintiff’s claim challenged a health plan’s compliance with the NSA’s rules concerning the “qualifying payment amount” (QPA), which according to the NSA is the “median of the contracted rates recognized by the plan or issuer” for the relevant service in the same insurance market and geographic area. 42 U.S.C. § 300gg-111(a)(3)(E)(i). The NSA requires payors to tell a provider their QPA for the relevant service and explain how it was calculated. 45 C.F.R. §§ 149.140, 149.510.
Guardian Flight asked Aetna how it calculated its QPA, but Aetna failed to offer an explanation, and the Parties entered the IDR process after negotiations over the payment amount failed. They selected Medical Evaluators of Texas (MET) as their certified independent dispute resolution entity (CIDRE) under the NSA, and after each party submitted their proposals MET selected Aetna’s number. Guardian Flight sued Aetna and MET, alleging that Aetna misrepresented its QPA and failed to disclose how it was calculated as required under the NSA. The suit was consolidated by the district court with a suit brought by Guardian Flight affiliates against Kaiser and MET alleging similar claims. In the consolidated case against Kaiser, Kaiser issued three explanations of benefit (EOBs) stating that its payment reflected the QPA, and on three other claims issued EOBs which did not mention the QPA. MET chose Kaiser’s number for all six claims and the providers sued seeking vacatur of the award, alleging that Kaiser had cheated the IDR process by initially offering the providers one payment amount and then submitted a lower number during the IDR process as its QPA.
The payor defendants in both suits moved to dismiss on the grounds that the complaint failed to state facts sufficient to trigger vacatur, and MET moved to dismiss based on arbitral immunity, and the providers appealed. The Fifth Circuit Panel first rejected the providers’ argument that the NSA permits private challenges to IDR determinations under 42 U.S.C. § 300gg-111(c)(5)(E)(i)(I), which provides that determinations “shall be binding upon the parties involved, in the absence of a fraudulent claim or evidence of misrepresentation of facts presented to the IDR entity involved regarding such claim.” In a prior case, the Fifth Circuit had ruled that the NSA did not provide a private right of action to review IDR awards, and based on that holding held that the NSA likewise included no private right of action to seek vacatur of an award outside of the Federal Arbitration Act’s (FAA) limited scope of review, which is incorporated by reference into the NSA.
The providers argued that under the FAA, they were entitled to seek vacatur of the awards because they were “procured by corruption, fraud, or undue means” because the payors misrepresented their QPAs and refused to explain how they were calculated as required under the NSA. 9 U.S.C. § 10(a)(1). The Fifth Circuit rejected this argument, holding that in the NSA context the FAA required a showing of conduct that approaches “bribery, undisclosed bias of an arbitrator, or willfully destroying or withholding evidence” in order to support vacatur. The Fifth Circuit found that the allegations about the providers’ misrepresentations about their QPAs did not support review under the FAA because they failed to include facts supporting an inference that the payors’ alleged misstatements were intentional. The Fifth Circuit also reversed the trial court’s denial of MET’s motions to dismiss, holding that it was entitled to arbitral immunity and that there is no need to name CIDREs as parties because in the event of a judicial remand order under the NSA, the CIDREs are required to accept and follow such orders.
The Guardian Flight I opinion can be found here. The Guardian Flight II opinion can be found here.
