Texas Medical Association v. HHS

Case: 23-40217 Document: 172-1 Page: 1 Date Filed: 08/02/2024

United States Court of Appeals

for the Fifth Circuit United States Court of Appeals

Fifth Circuit

____________ FILED

August 2, 2024

No. 23-40217 Lyle W. Cayce

____________ Clerk

Texas Medical Association; Tyler Regional Hospital,

L.L.C.; Doctor Adam Corley,

Plaintiffs—Appellees,

versus

United States Department of Health and Human

Services; Department of Labor; Department of the

Treasury; Xavier Becerra, Secretary, U.S. Department of Health

and Human Services; Julie A. Su, Acting Secretary, U.S. Department of

Labor; Janet Yellen, Secretary, U.S. Department of Treasury,

Defendants—Appellants,

______________________________

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LifeNet, Incorporated; East Texas Air One, L.L.C.,

Plaintiffs—Appellees,

versus

United States Department of Health and Human

Services; Xavier Becerra, Secretary, U.S. Department of Health and

Human Services; United States Department of the

Treasury; Janet Yellen, Secretary, U.S. Department of Treasury;

United States Department of Labor; Julie A. Su, Acting

Secretary, U.S. Department of Labor; United States Office of

Personnel Management; Kiran Ahuja,

Defendants—Appellants.

______________________________

Appeal from the United States District Court

for the Eastern District of Texas

USDC Nos. 6:22-CV-372, 6:22-CV-373

______________________________

Before King, Jones, and Oldham, Circuit Judges.

Edith Jones, Circuit Judge:

At the behest of Plaintiff healthcare providers 1 and providers of air

ambulance services, 2 the district court vacated regulations promulgated by

three federal departments 3 (collectively, the “Departments”). These

regulations established priorities for independent arbitrators appointed to

_____________________

1

The healthcare provider Plaintiffs are Texas Medical Association, a trade

association representing Texas physicians and medical students; Tyler Regional Hospital,

a hospital in Tyler, Texas; and Adam Corley, a physician from Tyler, Texas.

2

The Plaintiff providers of air ambulance services are LifeNet, Inc., and East Texas

Air One.

3

The Defendants are the Departments of Health and Human Services, Labor and

the Treasury, and their Secretaries (or Acting Secretary of Labor).

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resolve insurance reimbursement disputes pursuant to the No Surprises Act

(the “Act”), part of the Consolidated Appropriations Act, 2021, Pub. L.

No. 116-260, 134 Stat. 1182, 2758-890 (2020). The Departments appealed.

Tracking in large part the district court’s able opinion, we AFFIRM.

BACKGROUND

I. Statutory Background: The No Surprises Act

The No Surprises Act is intended to protect patients from “surprise”

medical bills by “limit[ing] the amount an insured patient will pay for

emergency services furnished by an out-of-network provider.” Tex. Med.

Ass’n v. U.S. Dep’t of Health & Hum. Servs., 654 F. Supp. 3d 575, 580 (E.D.

Tex. 2023) (Tex. Med. II). 4 The Act also limits the amount an insured patient

will pay for “certain non-emergency services furnished by an out-of-network

provider at an in-network facility.” Id. 5 Out-of-network providers are those

who have not entered contracts for payment with the insureds’ health plans.

In-network providers agree to receive lower fees because the plans guarantee

them dependable amounts of work. The Act was spawned by complaints that

patients, and their insurers, were susceptible to receiving “surprise” bills

from providers in circumstances, like emergency room visits or anesthesia

administration, where they had no realistic choice of lower-cost in-network

providers. Under the No Surprises Act scheme, out-of-network doctors are

required to turn to the patient’s insurer for payment of unreimbursed

amounts, and insurers are obliged to pay them based on the prescribed “out-

_____________________

4

As explained below, this is the second of several lawsuits brought by the Texas

Medical Association against these defendants.

5

The Act also limits the amount an insured patient will pay for emergency services

furnished by an out-of-network provider and for certain non-emergency services furnished

by an out-of-network provider at an in-network facility. See Tex. Med. II, 654 F. Supp. 3d

at 580.

3

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of-network rate.” 42 U.S.C. § 300gg-111(a)(1)(C)(iv)(II). 6 But importantly,

the covered out-of-network rates are not based on free-market principles

under the Act.

The statute calls for the out-of-network rate to be determined by the

following process. 7 The insurer first pays or denies payment to the provider.

Id. § 300gg-111(a)(1)(C)(iv). If the provider is dissatisfied, the parties then

engage in a 30-day negotiation; if that fails, either party may initiate

arbitration (referred to in the statute as the “independent dispute resolution

process” or “IDR process”). Id. § 300gg-111(c)(1)(A)-(B). Each side

submits an offer for a payment amount. Id. § 300gg-111(c)(5)(B). The

arbitration is a “baseball-style” process, in which the arbitrator (“IDR

entity”) must choose one of the two offers as the out-of-network rate. See id.

§ 300gg-111(c)(5)(A). 8

_____________________

6

The relevant provisions occur in triplicate in the United States Code, because the

Act amended three statutes: the Public Health Service Act (administered by the

Department of Health and Human Services), the Employee Retirement Income Security

Act (“ERISA”) (administered by the Department of Labor), and the Internal Revenue

Code (administered by the Department of the Treasury). We cite to the provisions in the

Public Health Service Act, codified at Title 42 of the U.S. Code. The parallel provisions

are codified at 29 U.S.C. § 1185e (ERISA) and 26 U.S.C. § 9816(c) (Internal Revenue

Code).

7

In some circumstances, the No Surprises Act looks to state law or to a State All-

Payer Model Agreement under 42 U.S.C. § 1315a to supply the relevant payment rates. See

42 U.S.C. § 300gg-111(a)(3)(K)(i), (iii). This appeal concerns circumstances where those

provisions are inapplicable; accordingly, the discussion that follows does not address

circumstances where those provisions are applicable.

8

This process, called “baseball-style” because of its association with baseball

salary disputes, “leads to a convergence of offers,” thus encouraging settlement. See Jeff

Monhait, Baseball Arbitration: An ADR Success, 4 Harv. J. Sports & Ent. L. 105, 133

(2013). Unlike more open-ended arbitration, where the arbitrator might be expected to

split the difference, in “baseball-style” arbitration, the parties have incentives not to offer

an “aspirational” number. Id. at 132.

4

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The No Surprises Act lists several factors that the arbitrator “shall

consider” in determining the out-of-network rate. Id. § 300gg-

111(c)(5)(C)(i). These factors include:

i. The “qualifying payment amount” (“QPA”). See id.

§ 300gg-111(c)(5)(C)(i)(I). The QPA is typically the

median rate the insurer would have paid for comparable

services in the same geographic area if provided by an in-

network provider or facility. See id. § 300gg-

111(a)(3)(E)(i).

ii. Five “additional circumstances”: (I) The doctor’s “level

of training”; (II) the “market share” of the doctor or

insurer in the geographic region; (III) the “acuity” of the

patient or the “complexity” of the case; (IV) the “scope of

services” of the facility; and (V) “[d]emonstrations of good

faith efforts (or lack of good faith efforts) made by the

nonparticipating provider or . . . the plan . . . to enter into

network agreements and, if applicable, contracted rates

between [those entities] during the previous 4 plan years.”

Id. § 300gg-111(c)(5)(C)(ii)(I)-(V). 9

The regulations at issue govern how arbitrators should weigh these

factors. The Parties dispute whether the regulations are valid under the

statute.

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9

The provisions cited here apply to the arbitration process for all providers except

air ambulances. The provisions governing air ambulance arbitrations are materially similar.

Compare, e.g., 42 U.S.C. § 300gg-111(c)(5)(C)(ii)(I) (“The level of training, experience,

and quality and outcomes measurements of the provider or facility that furnished such item

or service[.]”), with id. § 300gg-112(b)(5)(C)(ii)(III) (“The training, experience, and

quality of the medical personnel that furnished such services.”). There are also a few

differences not relevant here. Compare, e.g., id. § 300gg-111(c)(5)(C)(ii)(II) (“The market

share held by the nonparticipating provider . . . in the geographic region[.]”), with id.

§ 300gg-112(b)(5)(C)(ii)(IV) (“Ambulance vehicle type[.]”).

5

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II. Interim Final Rule and Prior Proceedings

The Act required the Departments to “establish by regulation one

independent dispute resolution process . . . under which . . . [an arbitrator]

determines . . . the amount of payment” for covered services “in accordance

with the succeeding provisions” addressing the dispute resolution process.

42 U.S.C. § 300gg-111(c)(2)(A). In July 2021, the Departments’ Interim

Final Rule established a methodology for how insurers must calculate QPAs.

See Requirements Related to Surprise Billing: Part I, 86 Fed. Reg. 36,872

(July 13, 2021) (“Interim Final Rule I”). 10 Shortly thereafter, in October

2021, the Departments issued a second Interim Final Rule establishing the

arbitration process for resolving payments between health plans and

providers. See Requirements Related to Surprise Billing: Part II, 86 Fed. Reg.

55,980 (Oct. 7, 2021) (“Interim Final Rule II”). This rule included what the

Departments described as a “rebuttable presumption that the QPA is the

appropriate payment amount.” Id. at 56,060.

Interim Final Rule II was successfully challenged in previous litigation

filed in the Eastern District of Texas by several medical providers (who

overlap with the Plaintiffs here). See Tex. Med. Ass’n v. U.S. Dep’t of Health

& Hum. Servs., 587 F. Supp. 3d 528 (E.D. Tex. 2022), appeal voluntarily

dismissed, 2022 WL 15174345 (5th Cir. Oct. 24, 2022) (Tex. Med. I); LifeNet,

Inc. v. U.S. Dep’t of Health & Hum. Servs., 617 F. Supp. 3d 547, 563 (E.D.

Tex. 2022). The district court held that the Rule’s rebuttable presumption

in favor of the QPA conflicted with the Act’s provision requiring arbitrators

to consider both the QPA and any information regarding the “additional

circumstances” listed in the statute. See Tex. Med. I, 587 F. Supp. 3d at 542-

_____________________

10

As with the Act, the rules appear in triplicate in the Code of Federal Regulations.

We cite to Title 45—Public Health. The parallel provisions appear at 29 C.F.R.

§ 2590.716-1 (Labor) and 26 C.F.R. § 54.9816-1T (Internal Revenue).

6

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43; LifeNet, 617 F. Supp. 3d at 561. The court also held that the Departments

violated the Administrative Procedure Act (“APA”) by failing to provide

the required notice and comment. Tex. Med. I, 597 F. Supp. 3d at 548;

LifeNet, 617 F. Supp. 3d at 562. The court entered a universal vacatur of the

provisions of the rule that effectuated this presumption in favor of the QPA.

See Tex. Med. I, 597 F. Supp. 3d at 549; LifeNet, 617 F. Supp. 3d at 563. 11

III. Final Rule and This Litigation

In response to the unfavorable district court decisions and comments

received on the interim final rules, the Departments promulgated the August

2022 Final Rule at issue in this case. See Requirements Related to Surprise

Billing, 87 Fed. Reg. 52,618 (Aug. 26, 2022) (“Final Rule”). 12 This Final

_____________________

11

In another lawsuit, some of the same plaintiffs have successfully challenged the

calculation of the arbitrator’s fee. Tex. Med. Ass’n v. U.S. Dep’t of Health & Hum. Servs.,

No. 6:23-cv-59, 2023 WL 4977746 (E.D. Tex. signed Aug. 3, 2023) (Tex. Med. III). The

district court held that the agency actions violated the notice-and-comment requirement of

the Administrative Procedure Act. Id. The Departments did not appeal.

In yet a fourth lawsuit, some of the same plaintiffs have successfully challenged

aspects of the QPA calculation methodology. Tex. Med. Ass’n v. U.S. Dep’t of Health &

Hum. Servs., No. 6:22-cv-450, 2023 WL 5489028 (E.D. Tex. signed Aug. 24, 2023), appeal

docketed, No. 23-40605 (5th Cir. Oct. 25, 2023) (Tex. Med. IV). The U.S. District Court

for the District of Columbia has upheld some aspects of the same methodology, stating:

“Th[is] is the very type of well reasoned analysis the APA requires[.]” Ass’n of Air Med.

Servs. v. U.S. Dep’t of Health & Hum. Servs., No. 21-3031, 2023 WL 5094881, at *7 (D.D.C.

Aug. 9, 2023). In one instance, the two courts reached results that point in opposite

directions. Compare id. at *3 (upholding the exclusion of single-case agreements from the

calculation of the QPA as not arbitrary or capricious), with Tex. Med. IV, 2023 WL

5489028, at *15 (striking down the same as inconsistent with the No Surprises Act).

12

The federal online portal went live in April 2022; between April 15, 2022, and

March 31, 2023, almost 335,000 arbitration proceedings were initiated—“nearly fourteen

times greater than the Departments initially estimated the caseload would be over the

course of a full calendar year.” Ctrs. for Medicare & Medicaid Servs.,

Federal Independent Dispute Resolution Process—Status Update 1

(2023), https://www.cms.gov/files/document/federal-idr-processstatus-update-april-

2023.pdf.

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Rule sets out three procedures arbitrators must follow in assessing which

offer best reflects the value of the services at issue.

First, the arbitrator must consider the QPA and “then” consider

information regarding the additional statutory factors, if the parties elect to

submit any such additional information. 45 C.F.R. § 149.510(c)(4)(iii)(A)-

(B).

Second, in considering additional evidence beyond the QPA, the

arbitrator “should not give weight to information to the extent it is not

credible, it does not relate to either party’s offer for the payment amount . . . ,

or it is already accounted for by the [QPA].” Id. § 149.510(c)(4)(iii)(E); see

also id. § 149.520(b)(3) (containing similar language in a parallel provision

that is specific to air ambulance arbitrations). The rule includes five

illustrative examples. Id. § 149.510(c)(4)(iv).

Finally, if the arbitrator relies on information beyond the QPA, the

arbitrator’s written decision “must include an explanation of why the

[arbitrator] concluded that this information was not already reflected in the

[QPA].” Id. § 149.510(c)(4)(vi).

The Plaintiffs filed suit (“Texas Medical II”) in the Eastern District of

Texas alleging that the Departments lacked statutory authority to promulgate

these three aspects of the arbitration process.

On cross-motions for summary judgment, the district court granted

summary judgment to the Plaintiffs and entered a universal vacatur of the

challenged provisions. Initially, the court held that the Plaintiffs had

Article III standing to sue based on procedural and financial injuries they

would incur as a result of the provisions. Substantively, it concluded that the

provisions impermissibly “place a thumb on the scale for the QPA.”

Whereas the Act “requires arbitrators to consider all the specified

information in determining which offer to select” (that is, the quantitative

8

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QPA as well as the generally qualitative additional circumstances listed in

the statute), the final rule privileges the QPA “by requiring arbitrators to

begin with the QPA and then imposing restrictions on the non-QPA factors

that appear nowhere in the statute.” The court also rejected the

Departments’ argument that the final rule merely establishes “reasonable

evidentiary and procedural rules”—for example, directing arbitrators not to

place weight on information that is not credible or not “related,” or that

double-counts facts already reflected in the QPA. 13

_____________________

13

The court vacated

(1) the word “then” in 45 C.F.R.§ 149.510(c)(4)(iii)(B) (“The certified IDR entity must

then consider information submitted by a party that relates to the following

circumstances[.]”);

(2) the entirety of § 149.510(c)(4)(iii)(E) (“In weighing the considerations described in

paragraphs (c)(4)(iii)(B) through (D) of this section, the certified IDR entity should

evaluate whether the information is credible and relates to the offer submitted by either

party for the payment amount for the qualified IDR item or service that is the subject of

the payment determination. The certified IDR entity should not give weight to

information to the extent it is not credible, it does not relate to either party’s offer for the

payment amount for the qualified IDR item or service, or it is already accounted for by the

qualifying payment amount under paragraph (c)(4)(iii)(A) of this section or other credible

information under paragraphs (c)(4)(iii)(B) through (D) of this section.”);

(3) the entirety of § 149.510(c)(4)(iv) (containing illustrative examples);

(4) the final sentence of § 149.510(c)(4)(vi)(B) (“If the certified IDR entity relies on

information described under paragraphs (c)(4)(iii)(B) through (D) of this section in

selecting an offer, the written decision must include an explanation of why the certified

IDR entity concluded that this information was not already reflected in the qualifying

payment amount.”); and

(5) the entirety of § 149.520(b)(3) (containing credibility, relatedness, and double-

counting provisions for air ambulances).

Tex. Med. II, 654 F. Supp. 3d at 595. The court also vacated the parallel provisions in Titles

26 and 29 of the Code of Federal Regulations. Id.

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STANDARD OF REVIEW

The district court’s grant of summary judgment is reviewed de novo.

Data Mktg. P’ship, LP v. U.S. Dep’t of Lab., 45 F.4th 846, 853 (5th Cir.

2022). The district court’s decision to vacate the challenged provisions of

the rule is reviewed for abuse of discretion. Texas v. United States, 50 F.4th

498, 529 (5th Cir. 2022).

DISCUSSION

The Departments defend this Rule on the grounds they articulated in

the district court. They contend that the Plaintiffs lack Article III standing

because their alleged injuries are speculative or not cognizable. The

Departments support all of the challenged provisions as “modest procedural

and evidentiary guardrails” that comfortably fit within the Act’s delegation

to “establish by regulation one independent dispute resolution process . . .

under which . . . [an arbitrator] . . . determines . . . the amount of payment”

for services covered by the Act. 42 U.S.C. § 300gg-111(c)(2)(A).

Consequently, the Departments deny any violation of the Administrative

Procedure Act. They argue that universal vacatur, in any event, was an

impermissible remedy even if this court affirms the district court’s

determination.

I. Standing

We exercise jurisdiction only if a plaintiff establishes Article III

standing. At the summary judgment stage, this requires proof of (1) “an

injury in fact” that is (2) “fairly traceable to the challenged conduct” and

(3) “likely to be redressed by the lawsuit.” Biden v. Nebraska, 600 U.S. __,

143 S. Ct. 2355, 2365 (2023); see also Lujan v. Defs. of Wildlife, 504 U.S. 555,

560-61, 112 S. Ct. 2130, 2136 (1992) (elaborating on the three elements of

standing). The Plaintiffs here allege that they suffer a procedural injury if

they are subjected to arbitrations unfairly skewed, in their view, by

10

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regulations illegally placed upon arbitrators who have independent status

under the Act. They also allege financial injuries from the likelihood that the

regulations will arbitrarily weigh in favor of lower QPA-based

reimbursements pursuant to the baseball-style arbitrations governed by these

regulatory benchmarks.

The district court found that the Plaintiffs’ claim that they were

“deprive[d] . . . of the arbitration process established by the Act” constituted

an injury in fact sufficient for standing. It is established that “subjection to

unwanted procedures” in various contexts may confer standing.

13A Charles Alan Wright & Alan R. Miller, Federal

Practice and Procedure § 3531.4 & n.140 (3d ed. Apr. 2023 update)

(collecting cases); see, e.g., Texas v. Equal Emp. Opportunity Comm’n,

933 F.3d 433, 447 (5th Cir. 2019) (“A plaintiff can show a cognizable injury

if it has been deprived of ‘a procedural right to protect [its] concrete

interests.’” (quoting Summers v. Earth Island Inst., 555 U.S. 488, 496,

129 S. Ct. 1142, 1151 (2009)); Texas v. United States, 497 F.3d 491, 497 (5th

Cir. 2007) (holding that a plaintiff subjected to an “allegedly invalid process”

has standing).

The Departments argue that the “procedural injury” doctrine applies

only to situations where a plaintiff alleges that an agency failed to follow the

correct procedures in promulgating a rule. Its interpretation of Texas v. Equal

Employment Opportunity Commission, however, is unduly narrow. This court

held that the state “suffered a procedural injury” because the Commission

issued an employment “guidance” without affording prior notice and

comment under the APA. Texas, 933 F.3d at 447. But nothing in the opinion

limits procedural standing to cases where the agency fails to follow notice-

and-comment procedures.

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Further, this court and others have found standing in precisely the

circumstances present here. See Texas v. United States, 497 F.3d at 497; New

Mexico v. Dep’t of the Interior, 854 F.3d 1207, 1216-17 (10th Cir. 2017). In

Texas v. United States, this court held that Texas had standing to challenge

regulations promulgated by the Secretary of the Interior concerning Indian

gaming licenses. 497 F.3d at 494-95. Texas was “subjected to an

administrative process involving mediation” in violation of an express

statutory procedural prerequisite to mediation. Id. at 497. It is true that the

court “did not explicitly characterize the injury that Texas had suffered as a

procedural one.” New Mexico, 854 F.3d at 1217. Nevertheless, the “key” to

this court’s conclusion in that case “was that Texas had been deprived of an

alleged statutory procedural protection.” Id. (quoting Del. Dep’t of Nat. Res.

& Env’t Control v. Fed. Energy Regul. Comm’n, 558 F.3d 575, 579 (D.C. Cir.

2009)).

Here, the Act provides for independent arbitrators to review certain

reimbursement claims, and the Plaintiffs assert injury from the Department’s

regulations that unlawfully skew the arbitrators’ decisionmaking. As in Texas

v. United States, this case turn on the substance of the regulations, not the

APA procedures. See 497 F.3d at 497. The Departments also assert that “it

was Congress, not the Departments, that directed plaintiffs and other

medical providers to participate in negotiation and arbitration processes.”

That is true, but again, it is the Departments’ regulations, not the statute,

that “compelled [the Plaintiffs] to participate in an invalid administrative

process.” See Texas v. United States, 497 F.3d at 496-97. This injury is

enough to show standing.

In the alternative, the fact that the Plaintiffs are now subject to

regulations that are contrary to law is itself a concrete injury sufficient to give

them standing. When “a plaintiff is an object of a regulation ‘there is

ordinarily little question that the action or inaction has caused him injury, and

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that a judgment preventing or requiring the action will redress it.’”

Contender Farms, L.L.P. v. U.S. Dep’t of Agric., 779 F.3d 258, 264 (5th Cir.

2015) (quoting Lujan, 504 U.S. at 561-62, 112 S. Ct. at 2137 (1992)). In

Contender Farms, this court held that participants in Tennessee “walking

horse events” had standing to challenge regulations promulgated under the

Horse Protection Act. Id. at 265. Those regulations empowered “Horse

Industry Organizations” to impose suspensions on the participants in certain

cases. Id. at 262. This court stated that “the suspensions target participants

in Tennessee walking horse events . . . , and they are as much objects of the

Regulation as the [Horse Industry Organizations] themselves.” Id. at 265.

Similarly, the arbitrators under this Act are legally required to apply

the regulatory provisions at issue, like the Horse Industry Organizations in

Contender Farms. See id. at 262. The arbitrators have power to bind the

Plaintiffs by determining the monetary value of their services, just as the

Horse Industry Organizations had power to sanction the participants in the

Tennessee “walking horse events.” See id. “[C]ommon sense” dictates that

the Plaintiffs have standing to challenge the rule. See id. at 265.

The Plaintiffs have a third basis for standing based on affidavits that

attest to likely financial injury if arbitrators are constrained by the biased

provisions of the Final Rule. Because the Plaintiffs’ requests for

reimbursement will often exceed QPA amounts, the Final Rule provisions

pose a threat of reducing their claims. Financial injury “is a quintessential

injury upon which to base standing.” El Paso County v. Trump, 982 F.3d 332,

338 (5th Cir. 2020) (quoting Tex. Democratic Party v. Benkiser, 459 F.3d 582,

586 (5th Cir. 2006)). The Departments characterize the Plaintiffs’ concern

as “speculative,” but for standing purposes, the court must accept as valid

their claim that the Final Rule favors the QPA. See Fed. Election Comm’n v.

Ted Cruz for Senate, 596 U.S. 289, 298, 142 S. Ct. 1638, 1647-48 (2022). In

fact, as one of the Departments’ amici points out, the Congressional Budget

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Office’s analysis of the Act shows that reliance on the QPA would result in

lower payments to providers. Cong. Budget Off., Estimate for

Divisions O Through FF, H.R. 133, Consolidated

Appropriations Act, 2021, Public Law 116-260, Enacted on

December 27, 2020, at 3 (2021). And the more closely the

“independent” arbitrators track QPA reimbursement levels as a result of the

challenged provisions of the Final Rule, the more likely the Plaintiffs are to

suffer financial injuries. 14

Finally, the Departments do protest too much in relying on

arbitrators’ asserted independence to eliminate the traceability component

of standing. See Lujan, 504 U.S. at 560-61, 112 S. Ct. at 2136 (“[T]he

injury . . . [must not be] ‘th[e] result [of] the independent action of some

third party not before the court.’” (quoting Simon v. E. Ky. Welfare Rts. Org.,

426 U.S. 26, 41-42, 96 S. Ct. 1917, 1926 (1976))). By design, the Final Rule

has a “determinative or coercive effect” on arbitrators sufficient to prove

traceability. See Bennett v. Spear, 520 U.S. 154, 169, 117 S. Ct. 1154, 1164

(1997). The very purpose of the “modest procedural and evidentiary

guardrails,” in the Departments’ explanation, is to instill uniformity and

predictability of outcomes. That goal requires controlling arbitrators to some

degree, whether or not it skews results. The Departments cannot have it both

ways on traceability.

_____________________

14

The Departments purport to rely on “disclaimers” in the Federal Register,

which provide that the Final Rule “do[es] not require [arbitrators] to default to the offer

closest to the QPA or to apply a presumption in favor of that offer,” and that “these final

rules specify that [arbitrators] should select the offer that best represents the value of the

item or service under dispute after considering the QPA and all permissible information

submitted by the parties.” 87 Fed. Reg. at 52,628. Official commentary, however, lacks

the status of the rules themselves and is merely hortatory.

14

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II. The Rule Conflicts with the Act

The Administrative Procedure Act requires a reviewing court to

“hold unlawful and set aside” agency action that is “arbitrary, capricious, an

abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C.

§ 706(2)(A). Where a statute delegates authority to an agency, “the role of

the reviewing court under the APA is” to “‘fix[] the boundaries of [the]

delegated authority’ and ensur[e] the agency has engaged in ‘“reasoned

decisionmaking”’ within those boundaries.” Loper Bright Enters. v.

Raimondo, 144 S. Ct. 2244, 2263 (2024) (citation omitted) (quoting Henry P.

Monaghan, Marbury and the Administrative State, 83 Colum. L. Rev. 1,

27 (1983), and then quoting Michigan v. EPA, 576 U.S. 743, 750, 135 S. Ct.

2699, 2706 (2015)). 15

The No Surprises Act states that the Departments “shall establish by

regulation one independent dispute resolution process . . . under which . . .

[an arbitrator] determines, . . . in accordance with the succeeding provisions

of this subsection, the amount of payment” for services covered by the Act.

42 U.S.C. § 300gg-111(c)(2)(A). The Departments exploit the term “one

independent dispute resolution process” as the basis for the challenged

portions of the Final Rule. As they correctly note, activities clearly

contemplated by that provision include identifying the type of notice required

to commence arbitrations, 45 C.F.R. § 149.510(b)(2)(iii), setting up an online

portal for arbitration proceedings, see id. § 149.510(b)(2)(iii)(C),

promulgating the selection process and standards for independent

arbitrators, id. § 149.510(c)(1)(i)-(ii), and prescribing recordkeeping

requirements for arbitration entities, id. § 149.510(c)(4)(viii). But nothing in

_____________________

15

Loper Bright was decided after oral argument was held in this case but before this

opinion was issued.

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the Act instructs arbitrators to weigh any one factor or circumstance more

heavily than the others, nor does the Act authorize the Departments to

superimpose regulatory rules on the clear statutory mandate. The Final Rule

therefore exceeds the Departments’ authority.

A. Congress delegated to the Departments only narrow

rulemaking authority

As noted above, the No Surprises Act states that the Departments

“shall establish by regulation one independent dispute resolution process.”

42 U.S.C. § 300gg-111(c)(2)(A). The Departments leapfrog from the purely

administrative authority conferred by this provision to a broader claimed

delegation that allows them to fill the gaps in the arbitration process itself

with “procedural and evidentiary guidelines” that the “independent”

arbitrators must follow. This is a lily pad too far.

Of course, Congress may so draft statutes as to “confer discretionary

authority on agencies.” Loper Bright, 144 S. Ct. at 2268. But courts have

“obligations under the APA” to “police the outer statutory boundaries of

those delegations, and ensure that agencies exercise their discretion

consistent with the APA.” Id.

The No Surprises Act did not delegate to the Departments the

authority to set substantive standards for the independent arbitrators to

observe. Those standards are fully determined by the text of the Act itself.

The Act provides that the arbitrator must determine the amount of payment

“in accordance with the succeeding provisions of this subsection,” that is,

according to a list of statutory criteria described above. 42 U.S.C. § 300gg-

111(c)(2)(A). As the district court noted, “[t]he Act specifies in meticulous

detail . . . the information for [the arbitrators] to consider.” Tex. Med. II,

654 F. Supp. 3d at 592. The specific and comprehensive statutory list

necessarily controls over the Departments’ general authorization for creating

16

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the mechanics of the arbitration process. The challenged portions of the Rule

thus unlawfully “supplement[]” a “comprehensive” statutory scheme.

Nat’l Pork Producers Council v. EPA, 635 F.3d 738, 753 (5th Cir. 2011); see

also Texas v. United States, 809 F.3d 134, 179, 186 (5th Cir. 2015) (“DAPA

is foreclosed by Congress’s careful plan” because, “[i]n specific and detailed

provisions,” Congress has already “expressly and carefully provide[d] legal

designations allowing defined classes of aliens to be lawfully present[.]”),

aff’d by an equally divided court, 579 U.S. 547, 136 S. Ct. 2271 (2016). 16

Moreover, when Congress charges a decisionmaker with considering

several factors without assigning them a procedural order or “specific

weight,” the weighing of those factors is left to the decisionmaker’s sound

discretion. New York v. Reilly, 969 F.2d 1147, 1150 (D.C. Cir. 1992). Here,

the No Surprises Act unambiguously provides that arbitrators deciding

which offer to select “shall consider . . . the qualifying payment amounts . . .

and . . . information on any circumstance described in clause (ii).” 42 U.S.C.

§ 300gg-111(c)(5)(C)(i). In Reilly, the decisionmaker, which happened to be

the EPA, was specifically empowered to balance statutory factors underlying

the “best demonstrated technology” for limiting harmful emissions. Id. at

1149 (quoting Standards of Performance for New Stationary Sources;

Municipal Waste Combustors, 54 Fed. Reg. 52,251, 52,253 (proposed Dec.

20, 1989)). Reilly’s analysis applies here, too, where the statutorily

empowered decisionmaker is an independent arbitrator.

_____________________

16

One of the Plaintiffs’ amici argues that setting a benchmark rate forces smaller,

independent providers to consolidate with larger systems, increasing healthcare costs, as

apparently happened in California after the state passed its own surprise medical billing

law, Cal. Health & Safety Code § 1371.31. See Erin L. Duffy, Influence of Out-of-

Network Payment Standards on Insurer-Provider Bargaining: California’s Experience, 25 Am.

J. Managed Care e243, e245 (2019).

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A helpful contrast may be drawn with Cuozzo Speed Technologies, to

which the Departments turn in vain for support. In that case, a statute

granted the Patent Office the authority to issue regulations “establishing and

governing inter partes review.” Cuozzo Speed Techs., LLC v. Lee, 579 U.S.

261, 266, 136 S. Ct. 2131, 2136 (2016) (quoting 35 U.S.C. § 316(a)(4)). 17 The

Patent Office issued a regulation stating that the agency in inter partes review

“shall [construe a patent claim according to] its broadest reasonable

construction in light of the specification of the patent in which it appears.”

Id. (quoting 37 C.F.R. § 42.100(b) (2015)). The Supreme Court upheld the

regulation as a permissible gap-filler. Id. at 276-77, 136 S. Ct. at 2142. But

the Court’s reasoning relied on a circumstance critically different from

anything in this case: in Cuozzo, “neither the statutory language, its purpose,

[n]or its history suggest that Congress considered what standard the agency

should apply when reviewing a patent claim in inter partes review.” Id. at

280, 136 S. Ct. at 2144. Here, by contrast, Congress has provided a

comprehensive list of factors for the arbitrators to consider under the No

Surprises Act.

With these regulations, the Departments exceeded their authority by

infringing on arbitrators’ discretion to balance the statutory factors.

Congress has provided that it is not the Departments, but the arbitrator, who

“shall consider” how to balance the factors under the statute. See 42 U.S.C.

§ 300gg-111(c)(5)(C)(i). By taking this discretion away from the

Departments and giving it to the arbitrator, Congress created an “outer

_____________________

17

It is unclear how much of Cuozzo survives Loper Bright. Regardless, Cuozzo does

not help the Departments here. The No Surprises Act, like the statute at issue in Cuozzo,

delegates some authority to the Departments to promulgate regulations. But we hold that,

unlike in Cuozzo, the regulations promulgated by the Departments exceeded that delegated

authority.

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statutory boundary” beyond which the Departments were not authorized to

stray. See Loper Bright, 144 S. Ct. at 2268.

B. The Rule exceeds the Departments’ authority

The Rule exceeds the Departments’ authority because it imposes

three extrastatutory requirements on arbitrators: (1) the arbitrators must

consider the QPA first and “then” the other factors; (2) the arbitrators must

not consider information that is not “credible” or “related to” the issue, or

that is already accounted for in the QPA; and (3) the arbitrators must explain

their reasons if they depart from the QPA.

1. Starting with the Qualifying Payment Amount (QPA)

The Final Rule instructs arbitrators to consider the QPA and “then”

to consider the “additional circumstances” listed in the statute. 45 C.F.R.

§ 149.51.510(c)(4)(iii)(B). The Rule thus prescribes a temporal sequence

that the arbitrator must follow in analyzing the statutory factors.

The Departments defend the word “then” on the grounds that “[t]he

structure of the statute, like the rule, directs arbitrators to the QPA first, and

to other circumstances second.” The statute states that arbitrators “shall

consider” (I) the QPAs and (II) “information on any circumstance

described in” the following clause. 42 U.S.C. § 300gg-111(c)(5)(C)(i). This

order makes sense because the additional circumstances are not always

relevant, whereas the QPA always is. It “represents the typical payment

amount” that would reimburse in-network providers. Final Rule, 87 Fed.

Reg. at 52,627. The Departments insist that “beginning the analysis with the

QPA . . . does not give arbitrators leeway to fail to account for . . . ‘additional

circumstances’ in instances where such information is submitted.”

But in other statutes, when Congress has so chosen, it has prescribed

looking first to one statutory factor and then to another. See, e.g., Ramirez v.

Immigr. & Customs Enf’t, 471 F. Supp. 3d 88, 176 (D.D.C. 2020) (discussing

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8 U.S.C. § 1232(c)(2)(B), which instructs the agency to “consider

placement . . . after taking into account” other factors). Here, Congress gave

no such instruction. It does not follow from the fact that a factor is listed first,

that it must also be considered first. The Departments contend that the QPA

must be considered first because it will be relevant “in all cases.” Final Rule,

87 Fed. Reg. at 52,627. But the Act contains no language specifying the order

in which arbitrators must consider information that is relevant. 18 Likewise,

the Departments point to the subchapter heading’s reference to “additional

factors,” implying that the QPA may be somehow primary. But the word

“additional” has no temporal connotation and, in any event, subchapter

headings are not dispositive. United States v. Lawrence, 727 F.3d 386, 393 (5th

Cir. 2013).

By telling the arbitrators that they must consider the QPA before all

other factors, the Departments place a thumb on the scale in favor of the

insurer-determined QPA in derogation of the other congressionally

mandated factors. It would distort the statutory scheme for the Departments

to impose such an extrastatutory requirement here.

_____________________

18

The Plaintiffs use legislative history to show that the arbitration process “is the

result of years of congressional deliberation and compromise.” Multiple failed bills “would

simply have pegged out-of-network reimbursement to the in-network rate.” See H.R. 3630,

116th Cong. (2019); S. 1895, 116th Cong. (2019). And Congress members recognized that

“giving too much weight” to in-network rates could empower insurers to “push rates

down” by threatening to “drop providers from networks.” Press Release, Rep. Richard

Neal, Neal Opening Statement at Markup of Surprise Medical Billing, Hospice, and Health

Care Investment Transparency Legislation (Feb. 12, 2020). Under the Act, arbitrators

“must equally consider many factors.” Joint Statement of House Committees on Ways

and Means, Energy and Commerce, and Education and Labor, Protecting Patients from

Surprise Medical Bills (Dec. 21, 2020). In the absence of ambiguity, however, we need not

consider this legislative history.

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2. Disregarding “not credible” or “unrelated” information and

prohibiting “double-counting”

The Final Rule instructs arbitrators, in weighing the “[a]dditional

circumstances,” “not [to] give weight to information” that is “not

credible,” that “does not relate to either party’s offer,” or that “is already

accounted for by the [QPA]” or other information. 45 C.F.R.

§ 149.510(c)(4)(iii)(E). These provisions include five examples

demonstrating the application of the rule. Id. § 149.510(c)(4)(iv).

The Departments argue that these provisions and the illustrative

examples “mirror the sort of evidentiary rules that commonly apply” in

adjudications. See, e.g., Fed. R. Evid. 402, 403, 611(b). They characterize

the Plaintiffs’ “true grievance” as with the calculation of the QPA itself,

which is not at issue in this case, but which the Plaintiffs have challenged in

Texas Medical IV. See 2023 WL 5489028, at *1. 19 We do not read the

Plaintiffs’ contention that way.

Instead, as the district court explained, “the Rule precludes

arbitrators from ‘giv[ing] weight’ to some information that the Act requires

them to consider—e.g., information relating to the non-QPA factors that

happens to be ‘already accounted for’ in the QPA.” Tex. Med. II,

654 F. Supp. 3d at 592 (citing 45 C.F.R. § 149.510(c)(4)(iii)(E)). The statute

states that the arbitrators “shall consider” the “additional” factors, and

Congress did not soften this “mandatory duty” with any qualifying language.

42 U.S.C. § 300gg-111(c)(5)(C)(i)(II). “[T]he mandatory ‘shall’ . . .

normally creates an obligation impervious to . . . discretion.” Lexecon Inc. v.

Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 35, 118 S. Ct. 956, 962

_____________________

19

This case had not been decided by the time the Parties filed their briefs. The

plaintiffs later prevailed. See Tex. Med. IV, 2023 WL 5489028, at *1.

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(1998); see also Anderson v. Yungkau, 329 U.S. 482, 485, 67 S. Ct. 428, 430

(1947) (“The word ‘shall’ is ordinarily ‘The [sic] language of command.’”

(quoting Escoe v. Zerbst, 295 U.S. 490, 493, 55 S. Ct. 818, 820 (1935))). When

Congress orders a decisionmaker to “consider” a list of factors, Congress is

instructing that “[e]ach factor must be given genuine consideration and some

weight” in the final determination. Pub. Serv. Co. of Ind. v. Interstate Com.

Comm’n, 749 F.2d 753, 763 (D.C. Cir. 1984). The decisionmaker “is not free

to ignore any individual factor entirely.” Tex. Oil & Gas Ass’n v. EPA,

161 F.3d 923, 934 (5th Cir. 1998). These provisions treat the QPA in “a

dramatically different fashion” from the other factors and so “distort[] the

judgment Congress directed the [arbitrators] to make.” See Am. Corn

Growers Ass’n v. EPA, 291 F.3d 1, 6 (D.C. Cir. 2002).

Congress imposed on the arbitrators a mandatory duty to consider all

the factors listed in the statute, giving preference to none. The Departments’

not-so-subtle attempt to prevent the arbitrators from considering some of

them in some cases thus violates the express, unambiguous terms of the Act.

3. The regulations violate the Act by imposing an explanation

requirement

The Final Rule states: “If the [arbitrator] relies on information [about

the non-QPA factors] in selecting an offer, the written decision must include

an explanation of why the [arbitrator] concluded that this information was

not already reflected in the [QPA].” 45 C.F.R. § 149.510(c)(4)(vi)(B).

The Departments contend that this provision enables the

Departments to “fulfill their statutory functions to monitor and to report on

how often, and why, an offer that is selected exceeds the QPA.” Final Rule,

87 Fed. Reg. at 52,632. Future rulemaking will benefit from a robust case-by-

case explanation why arbitrators may find in a given case that the QPA does

not “best represent[] the value” of the item or service at issue. 45 C.F.R.

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§ 149.510(c)(4)(ii)(A). Further, the provision follows from the requirement

that arbitrators not rely on additional information that is duplicative.

But as the Plaintiffs persuasively argue, the effect of this provision is

to make the arbitrator work harder only if he gives weight to any information

other than the QPA. Because the arbitrator is under no obligation to explain

why he chooses the QPA for reimbursement, this unequal burden tends to

bias outcomes in favor of the offer closest to the QPA. To analogize to a

different context, the Supreme Court has noted that under the criminal

Sentencing Guidelines, using the guidelines as a starting point in every case

“make[s] the imposition of a non-Guidelines sentence less likely.” Peugh v.

United States, 569 U.S. 530, 542, 133 S. Ct. 2072, 2083-84 (2013) (citing

Miller v. Florida, 482 U.S. 423, 435, 107 S. Ct. 2446, 2453 (1987)). The Final

Rule would produce a similar result, but such a result would be in violation

of the statute’s command that all factors be considered. Cf. Am. Corn

Growers Ass’n, 291 F.3d at 6 (“To treat one of the [mandatory] statutory

factors in such a dramatically different fashion distorts the judgment

Congress directed the [arbitrators] to make.”). Although it is true that

Congress has required the Departments to report how often reimbursements

exceed the QPAs, 42 U.S.C. § 300gg-111(c)(7)(A)(v), (B)(iv), the reports

need not explain why this is so. Nor is there any requirement for the

Departments’ reports to reference explanations only when a non-QPA

reimbursement is chosen. The Departments’ skewed interpretation is

inconsistent with the evenhandedness embodied in the Act.

III. Vacatur

The Departments argue that the rule should not have been vacated, or

at least not vacated as to third parties.

First, it is asserted that the Administrative Procedure Act may not

authorize vacatur at all. United States v. Texas, 599 U.S. 670, 693-702,

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143 S. Ct. 1964, 1980-85 (2023) (Gorsuch, J., concurring in the judgment).

But in this court, the APA “empowers and commands courts to ‘set aside’

unlawful agency actions,” allowing a district court’s vacatur to render a

challenged agency action “void.” Texas v. Biden, 20 F.4th 928, 957 (5th Cir.

2021), rev’d on other grounds, 597 U.S. 785, 142 S. Ct. 2528 (2022) (quoting

5 U.S.C. § 706). Binding Fifth Circuit precedent recognizes this remedy.

Data Mktg. P’ship, 45 F.4th at 856 n.2 (holding that Texas v. Biden “remains

binding” “except for the portions of it on statutory interpretation and final

agency action”); Franciscan All., Inc. v. Becerra, 47 F.4th 368, 374-75 (5th Cir.

2022) (“Vacatur is the only statutorily prescribed remedy for a successful

APA challenge to a regulation.”).

Next, the Departments contend that even if vacatur is the norm,

equitable interests counsel in favor of remand without vacatur because

vacatur leaves arbitrators to conduct costlier and less predictable

proceedings. But remand without vacatur is available only rarely, when there

is “at least a serious possibility” that the deficiency can be corrected on

remand and that vacatur would have “disruptive consequences.” Texas v.

Biden, 20 F.4th at 1000 (quoting Tex. Ass’n of Mfrs. v. U.S. Consumer Prod.

Safety Comm’n, 989 F.3d 368, 389-90 (5th Cir. 2021), and then quoting

United Steel v. Mine Safety & Health Admin., 925 F.3d 1279, 1287 (D.C. Cir.

2019)). Here, the Departments do not explain how they could correct the

Final Rule’s conflicts with the Act on remand. Further, as the district court

correctly noted, vacatur would not be disruptive; on the contrary, it

“preserve[s] the status quo because arbitrators have been—and are

presently—deciding payment disputes pursuant to the statute.” Tex.

Med. II, 654 F. Supp. 3d at 594.

In a last-ditch effort, the Departments argue that if any equitable relief

is appropriate, it should be granted only with respect to the plaintiffs to this

suit. See United States v. Texas, 599 U.S. at 703, 143 S. Ct. at 1986

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(Gorsuch, J., concurring in the judgment) (instructing courts to “ask[]

whether party-specific relief can adequately protect the plaintiff’s interests”

before entering broader relief). The Plaintiffs, however, aptly point out the

inconsistency between this argument and one of the Departments’ primary

justifications for the Final Rule, which is to promote “uniformity and

predictability across arbitrations.” This goal, according to the Departments,

is critical to Congress’s specification that there should be “one”

independent dispute resolution process. Cf. Feds for Med. Freedom v. Biden,

63 F.4th 366, 388 (5th Cir.) (en banc) (upholding a nationwide preliminary

injunction against the federal employee vaccine mandate where more limited

relief would “prove unwieldy and would only cause more confusion”),

vacated as moot, 144 S. Ct. 480 (2023).

In addition to being statutorily permissible, and required in this

circuit, universal vacatur is appropriate here, because a party-specific

injunction would thwart the uniformity and predictability of the arbitration

process.

CONCLUSION

The district court judgment vacating specific challenged provisions of

the Final Rule is AFFIRMED.

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King, Circuit Judge, concurring in part and concurring in the judgment:

I concur in Parts I and III of the discussion section of the majority’s

opinion, which address standing and vacatur. I also concur in Part II.B.2 of

the discussion section, as the regulations instructing arbitrators not to

consider certain factors appear to conflict with the text of the No Surprises

Act (“NSA”). With respect to the remainder of Part II, I agree with the

majority’s conclusion that the challenged regulations conflict with the NSA,

though my reasoning in reaching this conclusion differs slightly from that of

the majority.

While I agree that the challenged regulations effectively “place a

thumb on the scale” for the qualifying payment amount (“QPA”), I am not

quite convinced that the invalidity of these regulations is plainly evident from

the text of the NSA alone. It is true, as the majority notes, that generally

when Congress requires a decision-maker to consider statutory factors,

Congress’s failure to assign weight to those factors indicates that the

decision-maker is “free to exercise his discretion in this area.” See New York

v. Reilly, 969 F.2d 1147, 1150 (D.C. Cir. 1992). But I find this rule more

relevant when considering a plaintiff’s challenge to a specific decision

reached by a decision-maker vested with such discretion. Here, in contrast,

Plaintiffs-Appellees challenge the Departments’ authority to supplement a

statutory scheme by regulating the process that decision-makers must

undertake when reaching a decision.

In addressing this issue, I would avoid implying that when Congress

charges a decision-maker with considering several factors and does not assign

weight to those factors, regulators are categorically prohibited from

implementing supplementary procedural and evidentiary rules. In my view,

a better approach is to address each statute on a case-by-case basis, taking

into account the statute’s context and the grant of rulemaking authority in

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each instance. One could imagine a scenario in which Congress mandates

that a decision-maker consider several factors, but deliberately grants

regulators the authority to implement additional procedural and evidentiary

rules that might impact how those factors are to be weighed. Therefore, I am

concerned about reaching a broad holding that forecloses potentially

permissible regulations that are not before the court.

Turning to the facts of the case at hand, I disagree with the majority’s

conclusion that the NSA’s text unambiguously bars the Departments from

issuing regulations that may affect how arbitrators balance the QPA and the

additional statutory factors. The NSA explicitly directs the Departments to

establish, via regulation, an independent dispute resolution (“IDR”)

process. 42 U.S.C. § 300gg-111(c)(2)(A). The NSA also mandates that the

Departments must enact this regulation “in accordance with the succeeding

provisions of this subsection.” Id. The relevant provision in this case is that

which requires the arbitrators to consider the QPA and the additional

statutory factors. Id. § 300gg-111(c)(5)(C)(i). But the NSA is arguably silent

as to any additional procedural or evidentiary rules that the arbitrators must

follow during the IDR process. Because the NSA expressly provides that the

IDR process will be established via regulation, there appears to be some

ambiguity as to whether the ability to regulate the process by which the

arbitrators balance the QPA and the other statutory factors falls within the

“boundaries of [that] delegated authority.” See Loper Bright Enters. v.

Raimondo, 144 S. Ct. 2244, 2263 (2024) (internal quotation omitted). As long

as the regulations do not prevent the arbitrators from following their

statutory duty to consider the QPA and the additional circumstances, such

regulations may not necessarily run afoul of the NSA’s text. 20

_____________________

20

To be clear, as referenced above, I concur with the majority’s discussion in Part

II.B.2 and agree that the regulations instructing arbitrators not to consider certain factors

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Faced with this statutory ambiguity, to determine whether the

Departments validly exercise their regulatory authority by imposing such

rules, I would turn to legislative history for guidance. See United States v.

Orellana, 405 F.3d 360, 365 (5th Cir. 2005). Here, as Plaintiffs-Appellees

point out, and as the majority references in a footnote, the legislative history

behind the NSA indicates that Congress very deliberately did not intend for

the QPA to serve as a “benchmark” in the IDR process. Members of

Congress across the political spectrum have insisted that ensuring the NSA

would not contain a benchmark was a key point of emphasis in the bipartisan

bill’s passing. 21 While the challenged regulations may not explicitly establish

_____________________

appear to directly conflict with the text of the NSA. However, the regulation requiring

arbitrators to consider the QPA first, and the regulation requiring arbitrators to explain any

deviation from the QPA, do not appear to unambiguously contravene the NSA’s text.

21

See, e.g., Press Release, Rep. Richard Neal, Neal Opening Statement at Markup

of Surprise Medical Billing, Hospice, and Health Care Investment Transparency

Legislation (Feb. 12, 2020) (describing Representative Neal’s concern with “giving too

much weight to such a benchmark rate”); Joint Statement of House Committees on Ways

and Means, Energy and Commerce, and Education and Labor, Protecting Patients from

Surprise Medical Bills (Dec. 21, 2020) (noting that the NSA will contain “NO

benchmarking or rate-setting”); Press Release, Rep. Richard Neal, Neal Opening

Statement at Hearing on Implementation of the No Surprises Act (Sept. 19, 2023),

https://democrats-waysandmeans.house.gov/media-center/press-releases/neal-opening-

statement-hearing-implementation-no-surprises-act (“The IDR process was developed

through robust, extensive Congressional consideration in this Committee for nearly two

years before the [NSA’s] enactment. As written, this law carefully avoids any factor unduly

influencing the dispute resolution process.”); Letter from Rep. Thomas R. Suozzi et al. to

Secretary Xavier Becerra et al. (Nov. 5, 2021), https://wenstrup.house.gov/uploadedfiles

/2021.11.05_no_surprises_act_letter.pdf (“During these deliberations, multiple

proposals were considered including a benchmark rate, an independent dispute resolution

(IDR) process, and a hybrid. Following a comprehensive process that included hearings,

markups, and extensive negotiations, Congress rejected a benchmark rate and determined

the best path forward for patients was to authorize an open negotiation period coupled with

a balanced IDR process.”).

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the QPA as a benchmark, they do appear to move the needle in that direction,

in contravention of Congress’s intent behind the NSA.

This court is tasked with “fix[ing] the boundaries of . . . delegated

authority” in a manner that “effectuate[s] the will of Congress.” See Loper

Bright, 144 S. Ct. at 2263 (internal quotation omitted). When considering the

aforementioned legislative history and context, I ultimately agree with the

majority’s conclusion that the Departments undermined Congress’s

intended statutory scheme by issuing regulations that effectively “place a

thumb on the scale for the QPA.” But because I would reach a narrower

holding that considers the NSA’s legislative history and context in light of

statutory ambiguity, I respectfully concur only in the judgment as to Part II

of the discussion section of the majority’s opinion—with the exception of

Part II.B.2, which I join in full.

29