Courts v. Regulators: How Legal Challenges Are Shaping No Surprises Act Implementation – Key Rulings and What They Mean Going Forward

By: Bryan M. Dunton, Esq.

The No Surprises Act (NSA) was enacted to address a specific and highly visible problem: patients receiving unexpected out-of-network bills for care they did not choose and often could not avoid. In that respect, the statute has largely done what Congress intended. But while the patient has been removed from the center of the payment dispute, the dispute itself has hardly disappeared. Disputes now involve providers, payors, and, increasingly, the courts.

This shift is now one of the defining features of the Act. The NSA is no longer just a consumer-protection law with an arbitration mechanism attached. It has become a live legal framework whose meaning is being developed through litigation. The first wave of cases focused on whether the Departments of Health and Human Services (HHS), Labor, and Treasury lawfully implemented the federal Independent Dispute Resolution (IDR) process. The second wave focused on whether IDR awards can be enforced in court and whether the process itself is being used in ways Congress intended.

The most important early cases are the Texas Medical Association cases. This line of cases addresses the core economic question embedded in the statute: What role should the qualifying payment amount (QPA) play in the IDR process? The QPA is generally the plan’s median contracted rate for the item or service at issue, and the statute requires arbitrators to consider it along with other enumerated factors. Regulators attempted early on to give the QPA outsized practical influence. Providers argued that the agencies had gone too far. Courts largely agreed with the providers.

In TMA I, the Eastern District of Texas vacated the portion of the interim final rule that effectively directed arbitrators to favor the offer closer to the QPA unless credible additional information justified a different result. The court found that this framework improperly elevated one factor over others that Congress had expressly included. The agencies could administer the statute, but they could not turn the QPA into the presumptive answer by regulation.

The agencies revised their approach. In TMA II, providers challenged the revised final rule, arguing that it still placed a functional “thumb on the scale” for the QPA. In August 2024, the Fifth Circuit largely agreed, holding that the Departments lacked authority to impose substantive standards on arbitrators who effectively prioritized the QPA over the other statutory factors. This ruling confirmed that regulators cannot accomplish indirectly what they were not permitted to do directly. A QPA-first framework remains vulnerable if it materially constrains the arbitrator’s statutory discretion.

The litigation then moved deeper into the architecture of the statute. TMA III challenged aspects of the QPA methodology itself. That distinction matters because the QPA affects both reimbursement disputes and patient cost-sharing calculations for protected services. The Fifth Circuit issued a mixed panel opinion in 2024, but the court later granted rehearing en banc in 2025, vacating that panel decision. In response, the Departments issued updated guidance in July 2025 instructing plans and issuers how to proceed while the matter remains unresolved. So even without a final decision on the merits, the litigation has already forced regulators into a provisional compliance posture.

A related dispute, TMA IV, challenged the dramatic increase in the federal IDR administrative fee and aspects of the batching rules. That case matters because it highlights that procedure is substance when it comes to matters like dispute resolution. A statutory remedy can remain formally available while becoming much less meaningful if access to it is made more expensive or more difficult. The broader lesson from the TMA line of cases is that courts are not only scrutinizing the outcome of the regulatory framework, but also the agencies’ ability to shape the structure of the process itself.

The next major line of cases asks a different question: What happens after an IDR award is issued? That issue came to the forefront in Guardian Flight, LLC v. Health Care Service Corporation. In June 2025, the Fifth Circuit held that the NSA does not create a private right of action for providers to sue insurers directly to enforce unpaid IDR awards. The court also rejected the providers’ ERISA-based theory. The practical effects of the ruling are noteworthy. At least in the Fifth Circuit, a provider can win in the federal IDR process and still face serious difficulty converting that win into a judicially enforceable remedy under the NSA itself.

That development matters because a dispute-resolution system is only as strong as its remedy structure. If an award is “binding” in theory but not readily enforceable in practice, the leverage dynamics of the system begin to shift. And while Guardian Flight is an important appellate marker, it may not be the final word nationally. The enforcement question is likely to continue generating litigation, especially if other courts are more receptive to direct or indirect enforcement theories.

The newest and perhaps most revealing set of cases involve allegations about how the system is being used. In Anthem Blue Cross Life and Health Insurance Co. v. Prime Healthcare Services, private insurers alleged that a hospital system is abusing the NSA arbitration process to obtain higher out-of-network payments. The plaintiffs noted concerns about the volume of arbitration disputes, the prevalence of allegedly ineligible cases, and the possibility that those dynamics could increase costs and premiums.

A similar concern appears in Blue Cross Blue Shield of Texas v. Zotec Partners, LLC. There, the insurer alleges that a medical billing company abused the federal IDR process to obtain higher out-of-network reimbursement, including through allegedly ineligible disputes. These cases highlight how litigation of the IDR process has evolved. The courts are now being asked not only whether regulators lawfully implemented the statute, but also whether private actors are operating within the bounds of the system Congress created.

The TMA cases are classic “courts versus regulators” cases as they ask whether agencies exceeded their statutory authority in designing the federal IDR framework. Anthem v. Prime and BCBSTX v. Zotec are different, but no less relevant. They suggest that once courts limited the agencies’ ability to shape the system from above, the conflict shifted into disputes over how the remaining framework is functioning in practice. In that sense, the NSA is now being shaped through judicial review of rulemaking and judicial scrutiny of conduct within the process itself.

The most important legal questions surrounding the NSA are no longer limited to whether the statute protects patients from surprise bills. They now include how much weight the QPA may carry, how far regulators may go in structuring arbitration, whether prevailing parties can meaningfully enforce awards, and whether the IDR process itself is being manipulated through volume, eligibility disputes, or strategic filings. For plans, providers, and TPAs, that means the governing law of the NSA cannot be understood from the statutory text alone. Instead, we are seeing the courts impact on the framework, piece by piece.