Fifth Circuit Court Rules in Favor of Providers on No Surprises Act Arbitration, May Increase Payments

The U.S. Court of Appeals for the Fifth Circuit issued a decision that sides with health-care providers in a lawsuit over the No Surprises Act.

The case stemmed from a 2022 Texas Medical Association suit challenging the federal rule that calculates the qualifying payment amount (QPA) used in arbitration.

The court found the government’s instructions were erroneous and held that QPAs should not include "ghost rates," placeholder amounts that providers do not actually bill.

By removing these low placeholder rates, the ruling could raise the amounts insurers are required to pay in arbitration, potentially increasing revenue for hospitals and physicians.

Federal agencies will now have to revisit the arbitration methodology, and the decision may influence future enforcement of the No Surprises Act.