Two District Courts have reached opposite conclusions on the enforceability of arbitration awards under the No Surprises Act (“NSA”).  The two decisions, while far from the final word on the subject, highlight the most recent challenge relating to the implementation of the NSA. 

Enacted by Congress in 2020, the NSA protects patients from so-called “surprise” medical bills.  These bills arise when patients receive out-of-network care, particularly when treated for emergencies, or else when receiving certain non-emergency services at in-network facilities.  When it applies, the NSA limits the amount patients pay for such services to the median in-network rates they would have paid had the services been rendered in-network, thereby shielding them from certain out-of-pocket costs and expenses.  The law establishes a mandatory dispute resolution process—an open negotiation, followed by a “baseball-style” arbitration—for providers and insurers to resolve payment disputes regarding out-of-network reimbursement rate for services rendered. 

Since the NSA came into effect, however, there have been numerous challenges related to its implementation.  Not surprisingly, a split has emerged at the district court level about the appropriate enforcement mechanisms for NSA awards.  On one end, the United States District Court for the District of New Jersey (“New Jersey District Court”) found in September 2023 that the Federal Arbitration Act (“FAA”) applies to enforce these awards.  More recently, however, the United States District Court for the Northern District of Texas (“Texas District Court”) reached the opposite conclusion, ruling in May 2024 that the FAA does not provide a mechanism to enforce NSA awards. 

In the New Jersey District Court case, GPS of New Jersey M.D., P.C. (“GPS”), rendered emergency services to a beneficiary covered by Horizon Blue Cross & Blue Shield (“Horizon”) on an out-of-network basis.  When GPS submitted its claim for reimbursement to Horizon, Horizon only partially paid the claim.  In NSA arbitration, the arbitrator sided with Horizon, selecting its offer as the appropriate reimbursement rate.  When Horizon moved to confirm the award under the FAA, the New Jersey District Court sided with Horizon, emphasizing the strong presumption in favor of upholding arbitration awards and finding no evidence of procedural failures or improper presumptions.  Notably, in the same opinion, the New Jersey District Court also denied GPS’s petition to vacate the same award, again applying FAA principles, and reinforcing the presumption that NSA arbitration decisions are enforceable under the FAA. 

In the Texas District Court case, a pair of air ambulance providers (Guardian Flight LLC and Med-Trans Corporation) sued Health Care Service Corporation (“HCSC”), arguing that HCSC had failed to timely pay awards the plaintiffs had obtained in the arbitration process.  As GPS had done in New Jersey, Guardian Flight and Med-Trans asserted that the FAA was the appropriate (indeed the only) mechanism to enforce NSA awards.  The Texas District Court disagreed, reasoning that since the NSA does not include an express provision allowing for the enforcement of arbitration awards under the FAA, Congress did not intend to create such a mechanism within the NSA.  In a further blow, the Texas District Court also dismissed the plaintiffs’ ERISA benefits and unjust enrichment claims, finding no concrete injury to HCSC’s beneficiaries and no direct benefit to HCSC, respectively, and denying leave to amend, concluding the claims were incurable. 

What’s Next?  Ongoing Legal Battles and Shifting Terrain for NSA Compliance

Although the health care providers in the award enforcement cases did not prevail, Guardian Flight LLC and Med-Trans Corporation have filed a notice appealing the Texas District Court’s ruling.  Meanwhile, health care providers represented in a separate series of cases brought by the Texas Medical Association have fared much better in challenging numerous of the implementing regulations issued by the Biden Administration.  Appeals from those cases remain pending.  Separately, additional Biden Administration NSA regulations are awaiting finalization.  Thus, the legal landscape surrounding the NSA and its enforcement mechanisms remains in flux.  Accordingly, health care providers should retain skilled counsel to advise them on compliance with the NSA and to navigate the ever-evolving regulatory environment. 

Proskauer’s Health Care Group will continue to monitor for developments and new guidance related to the No Surprises Act and its implementation.  Subscribe to our Health Care Law Brief to stay up to date. 

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Photo of D. Austin Rettew D. Austin Rettew

Austin Rettew is an associate in the Corporate and Litigation Departments and a member of the Health Care Group at Proskauer.  His practice focuses on regulatory litigation and compliance within the health care sector.  He provides strategic counsel to health care providers on…

Austin Rettew is an associate in the Corporate and Litigation Departments and a member of the Health Care Group at Proskauer.  His practice focuses on regulatory litigation and compliance within the health care sector.  He provides strategic counsel to health care providers on managed care and commercial payer disputes, offering comprehensive regulatory, compliance, and reimbursement guidance to a diverse client base, including hospital systems, dialysis providers, anesthesia associations, physician practices, post-acute care service providers, and healthcare technology and revenue cycle management companies.

Austin is experienced in regulatory litigation and routinely advises clients operating within the complex landscape of the heavily regulated health care industry.  His work in this area addresses compliance issues related to ERISA, the Affordable Care Act, the Medicare Secondary Payer Act, the Medicare Advantage program, the federal No Surprises Act, state surprise billing laws, state insurance laws, and the Mental Health Parity and Addiction Equity Act.  He has represented providers, pharmaceutical manufacturers, and other health care companies in government investigations involving the Anti-Kickback Statute, the False Claims Act, and qui tam “whistleblower” lawsuits, working closely with company executives and consultants to develop effective compliance regimes while minimizing business disruption.

Austin also advises investors, owners, operators, and developers of long-term care and senior housing communities on health care transactions, regulatory compliance, corporate due diligence, and change of ownership procedures for state licensure, certificate of need, and Medicare and Medicaid certifications.  He also drafts industry-specific comment letters for proposed regulations, ensuring that client perspectives and concerns are clearly communicated to regulatory bodies.

While in law school, Austin was an articles editor of the George Washington University Law School’s Public Contract Law Journal.  Austin also served as a judicial intern for Judge Elizabeth S. Stong of the U.S. Bankruptcy Court for the Eastern District of New York and Magistrate Judge Lois Bloom of the U.S. District Court for the Eastern District of New York.

Prior to joining Proskauer, Austin was an associate in the Complex Litigation group at ArentFox Schiff.

Photo of Vinay Kohli Vinay Kohli

Vinay Kohli is a healthcare industry lawyer.  Recognized for his focus and commitment to the healthcare industry, a wide range of healthcare businesses use Vinay as an outside general counsel to guide them on strategic planning, compliance matters, operational questions, and reimbursement concerns. …

Vinay Kohli is a healthcare industry lawyer.  Recognized for his focus and commitment to the healthcare industry, a wide range of healthcare businesses use Vinay as an outside general counsel to guide them on strategic planning, compliance matters, operational questions, and reimbursement concerns.  He provides regulatory, compliance, and reimbursement advice on topics that range from venture formation, technology implementation, and risk management to day-to-day contract negotiations.

Vinay’s background is unique in that he is also a seasoned trial lawyer.  He is able to combine his regulatory expertise with a trial lawyer skillset for jury trials, bench trials, and arbitrations arising in the healthcare arena—he represents hospital systems, physician practices, providers of post-acute care services, as well as healthcare technology and revenue cycle management companies. He defends health care fraud and abuse litigation, prosecutes managed care disputes against large national payors, and handles government investigations.  And clients frequently call upon Vinay to serve as lead trial counsel in commercial litigation disputes that span the gamut from breach of contract and trade secret misappropriation to unfair business practices and breach of fiduciary claims.

Vinay received his B.B.A., magna cum laude, M.A., and J.D. from the University of Texas at Austin in 2005, 2006, and 2009 respectively.

Prior to joining Proskauer, Vinay was a partner in the Healthcare group at King & Spalding.