August 28, 2022

On July 26, 2022, the U.S. District Court for the Eastern District of Texas struck down part of an interim final rule related to the federal independent dispute resolution (IDR) process under the No Surprises Act (NSA), which was enacted as part of the Consolidated Appropriations Act, 2021 (CAA).


The NSA prohibits “surprise billing,” or instances in which an individual receives an unexpected bill after obtaining items and services from an out-of-network provider or facility (including air ambulance services) when they did not have the opportunity to select a facility or provider covered by their health insurance network (such as during a medical emergency). The NSA provides for a federal IDR process to resolve payment disputes after unsuccessful negotiation, where a certified IDR entity will review the specifics of the case and services received and determine the final payment amount.

The Federal IDR Process

The same District Court previously invalidated part of the IDR rule relating to the preference for the “qualifying payment amount” (QPA) (generally, the health plan’s median contract rate for the item or service in the geographic area), ruling that it created an unfair reimbursement system favoring health plans.

In this case, an air ambulance company challenged portions of the rule requiring the out-of-network rate for air ambulance services to be determined based on the QPA during IDR. The court found these provisions to be “nearly identical” to those at issue in the earlier ruling, determining that they must also be invalidated.

The court’s ruling does not affect any other NSA provision. Therefore, the NSA’s protections against surprise billing generally remain in place. Federal agencies will likely revise existing regulations based on the court’s decision in a similar manner to the revisions made due to the first court case.


Important Dates

Dec. 27, 2020
The CAA was signed into law.

Sept. 30, 2021
Federal agencies issued an interim final rule on the federal IDR process.

Feb. 23, 2022
A federal court struck down part of the rule related to the IDR process.

July 26, 2022
The same federal court struck down part of the IDR rule related to air ambulance services.


Despite the court’s ruling, the NSA’s protections against surprise bills generally remain in place.

This Legal Update is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. ©2022 Zywave, Inc. All rights reserved.
View Alert