120 F.4th 494
5th Cir.2024Background
- The case involves challenges to agency rules implementing the No Surprises Act, meant to protect patients from surprise medical bills, particularly focusing on how to calculate the “qualifying payment amount” (QPA).
- Plaintiffs—healthcare and air-ambulance providers—argued several regulatory provisions exceeded or contradicted statutory authority or were arbitrary and capricious under the APA.
- The district court invalidated some rule provisions, vacating rules on QPA determination and deadlines, while upholding disclosure requirements; both sides appealed aspects of the ruling.
- The Fifth Circuit considered deference to agency interpretations in light of the Supreme Court’s Loper Bright decision abolishing Chevron deference, emphasizing judicial independence in statutory interpretation.
- The Departments (HHS, Labor, Treasury, OPM) issued the challenged rules without typical notice-and-comment, citing good cause, in response to imminent statutory deadlines.
- The Fifth Circuit’s review covered the legal validity of QPA calculation methods, the rule’s deadline for initial insurer payments, and adequacy of provider disclosure obligations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| QPA: Inclusion of unperformed rates | QPA should only include rates for services actually performed by providers; including others distorts median. | "Provide" means to make available, not necessarily performed; statute allows broader inclusion. | Rule is lawful; district court reversed. |
| QPA: Excluding case-specific contracts | Single-case agreements are "contracted rates" and must be included in QPA calculation. | Only typical network contracts should count; including ad hoc agreements distorts intended market median. | Rule is lawful; district court reversed. |
| QPA: Exclusion of bonuses/incentives | All payments (bonus, risk, incentive) must be included as "total maximum payment." | Statute gives discretion; exclusion aligns with custom and intent of rate calculation. | Rule is lawful; district court reversed. |
| Deadline for insurer payment | 30-day deadline should start on provider’s billing date, not on insurer’s receipt of “clean claim.” | Rule aligns with industry norms and practical needs; statute allows flexibility in timing. | Rule is unlawful; district court affirmed. |
| Disclosure requirements | Rule does not require enough disclosure for providers to verify QPA or pursue complaints/IDR. | Agencies balanced transparency with administrative burden, as statute allows. | Rule is lawful; district court affirmed. |
Key Cases Cited
- FCC v. Prometheus Radio Project, 592 U.S. 414 (agency action reviewed for reasonableness; court not to substitute judgment)
- Motor Vehicle Mfrs. Ass’n of U.S. v. State Farm Mut. Auto Ins., 463 U.S. 29 (agency reasoning need not be perfect if discernible)
- Util. Air Regul. Grp. v. EPA, 573 U.S. 302 (agencies cannot rewrite clear statutory terms)
- Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (abolished Chevron deference; courts must exercise independent statutory judgment)