NASS Insider

February 21, 2023

Judge Rules Against HHS on Arbitration Process for ‘No Surprises Act’

On Monday, February 7, a federal judge in Texas tossed out portions of a rule that established the arbitration process in the federal No Surprises Act, a case brought by the Texas Medical Association against the US Departments of Health and Human Services, Labor, and the Treasury and supported by NASS through the filing of an amicus brief on October 19 of last year.

In his opinion on the ruling, Judge Jeremy D. Kernodle of the US District Court for the Eastern District of Texas said the rule “conflicts with the unambiguous terms of the Act,” by requiring arbitrators to start with the qualifying payment amount (QPA) and limit the other factors they can consider. The US Departments of Health and Human Services, Labor, and the Treasury “have not relinquished their goal of privileging the QPA, tilting arbitrations in favor of insurers, and thereby lowering payments to providers,” Kernodle further wrote.

The No Surprises Act was passed by Congress as part of the appropriations bill signed into law on December 27, 2020 to address the issue of surprise medical billing. It was a bipartisan, bicameral effort that took multiple years of negotiating between legislators, the physician community, and insurers and payors. The act limits the total amount patients can be charged for emergency services delivered by physicians who aren’t in their insurance network and for non-emergency services delivered by certain out-of-network providers located in network facilities. It also establishes an independent arbitration process to settle disputes between an insurer and out-of-network providers who can’t agree on a reimbursement amount for services relating to a patient’s care.

The final rule updated what information certified independent dispute resolution entities (IDREs) must consider when making a payment determination under the federal arbitration process. According to the departments, these changes were made to conform with February and July 2022 rulings by the U.S. District Court for the Eastern District of Texas. These rulings vacated the portion of the interim final regulations that directed IDREs to begin with the presumption that the offer closest to the QPA, essentially the payer’s median contracted rate, was the appropriate out-of-network payment amount. The final rule was to go into effect Oct. 25.

The court granted the association’s request for summary judgment, vacated the challenged parts of the rule, and sent it back to the departments for “further consideration in light of this opinion.”

NASS is proud to be one of the primary organizations leading this effort and will continue to work with other medical organizations and congressional leaders to ensure appropriate implementation of the No Surprises Act. The amicus brief was led by the Physician Advocacy Institute and has been joined by 9 national medical societies and 21 state medical societies. For more information on this or other legislative issues, please contact our advocacy staff and


Philip L. Schneider, MD
President, National Association of Spine Specialists
Chair, North American Spine Society Advocacy Council