Texas Medical Association v. HHS, 110 F.4th 762

The No Surprises Act (part of the 2021 Consolidated Appropriations Act) aims to protect patients from high "surprise" bills by capping out-of-network charges for certain medical services and establishing an arbitration process (IDR) for payment disputes between providers and insurers.
The Act lists specific factors arbitrators must consider, including the qualifying payment amount (QPA) and five additional circumstances, without specifying the relative weight of any factor.
Federal agencies (the Departments of Health and Human Services, Labor, and Treasury) issued rules stating arbitrators should presumptively favor the QPA in disputes, and imposed procedures such as requiring explanations when departing from the QPA and discounting duplicative or irrelevant evidence.
Several Texas health care providers challenged these rules, claiming they unlawfully tilted the arbitration process toward insurance companies by privileging the QPA contrary to the statute.
The district court found for the providers, vacating key parts of the regulations as exceeding agency authority and inconsistent with the Act; the agencies appealed to the Fifth Circuit.
The Fifth Circuit reviewed the district court’s summary judgment de novo and affirmed the vacatur of the rules, holding the agency regulations unlawfully skewed the arbitration process toward the QPA.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standing to challenge the rules	Suffer procedural and financial injuries due to biased arbitration	Injuries are speculative or non-cognizable	Plaintiffs have standing on procedural and financial grounds
Whether the agency rules improperly privileged QPA in arbitration	Rules unlawfully place a thumb on the scale for QPA	Agencies have authority for "reasonable procedural guardrails"	Rules exceed delegated authority; conflict with statute
Whether agencies have broad authority to regulate arbitrator procedures	Only process mechanics, not substantive weighing, can be regulated	Agencies can fill gaps in arbitration process with procedural rules	Act’s detail on factors precludes agency-created weighing
Remedy: Scope and manner of vacatur	Universal vacatur needed for uniformity and to avoid confusion	Only party-specific or no vacatur appropriate	Universal (nationwide) vacatur affirmed

Data Mktg. P’ship, LP v. U.S. Dep’t of Labor, 45 F.4th 846 (APA review of summary judgment in agency cases)
Texas v. United States, 497 F.3d 491 (Procedural injury as sufficient for standing)
Lujan v. Defenders of Wildlife, 504 U.S. 555 (Article III standing requirements)
Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (The word ‘shall’ is mandatory in statutes)
Michigan v. EPA, 576 U.S. 743 (Agencies must act within statutory limits)
Peugh v. United States, 569 U.S. 530 (Weighting a starting point influences outcomes)
United States v. Lawrence, 727 F.3d 386 (Section headings are not dispositive of statutory meaning)