No Surprises Act Appeal Ruling

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,
______________________________
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).
No. 23-40217
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.
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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.
_____________________
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[.]”).
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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
No. 23-40217
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
No. 23-40217
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
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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.
9
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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
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No. 23-40217
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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No. 23-40217
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.
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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
No. 23-40217
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).
17
No. 23-40217
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.
18
No. 23-40217
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
19
No. 23-40217
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.
20
No. 23-40217
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.
21
No. 23-40217
(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.
22
No. 23-40217
§ 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,
23
No. 23-40217
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
24
No. 23-40217
(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.
25
No. 23-40217
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
26
No. 23-40217
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
27
No. 23-40217
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.”).
28
No. 23-40217
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
United States Court of Appeals

FIFTH CIRCUIT
OFFICE OF THE CLERK
LYLE W. CAYCE TEL. 504-310-7700
CLERK 600 S. MAESTRI PLACE,
Suite 115
NEW ORLEANS, LA 70130
August 02, 2024

MEMORANDUM TO COUNSEL OR PARTIES LISTED BELOW
Regarding: Fifth Circuit Statement on Petitions for Rehearing
or Rehearing En Banc
No. 23-40217 Texas Medical Association v. HHS
USDC No. 6:22-CV-372
USDC No. 6:22-CV-373
Enclosed is a copy of the court’s decision. The court has entered

judgment under Fed. R. App. P. 36. (However, the opinion may yet
contain typographical or printing errors which are subject to
correction.)
Fed. R. App. P. 39 through 41, and Fed. R. App. P. 35, 39, and 41
govern costs, rehearings, and mandates. Fed. R. App. P. 35 and 40
require you to attach to your petition for panel rehearing or
rehearing en banc an unmarked copy of the court’s opinion or order.
Please read carefully the Internal Operating Procedures (IOP’s)
following Fed. R. App. P. 40 and Fed. R. App. P. 35 for a discussion
of when a rehearing may be appropriate, the legal standards applied
and sanctions which may be imposed if you make a nonmeritorious
petition for rehearing en banc.
Direct Criminal Appeals. Fed. R. App. P. 41 provides that a motion
for a stay of mandate under Fed. R. App. P. 41 will not be granted
simply upon request. The petition must set forth good cause for
a stay or clearly demonstrate that a substantial question will be
presented to the Supreme Court. Otherwise, this court may deny
the motion and issue the mandate immediately.
Pro Se Cases. If you were unsuccessful in the district court
and/or on appeal, and are considering filing a petition for
certiorari in the United States Supreme Court, you do not need to
file a motion for stay of mandate under Fed. R. App. P. 41. The
issuance of the mandate does not affect the time, or your right,
to file with the Supreme Court.
Court Appointed Counsel. Court appointed counsel is responsible
for filing petition(s) for rehearing(s) (panel and/or en banc) and
writ(s) of certiorari to the U.S. Supreme Court, unless relieved
of your obligation by court order. If it is your intention to
file a motion to withdraw as counsel, you should notify your client
promptly, and advise them of the time limits for filing for
rehearing and certiorari. Additionally, you MUST confirm that
this information was given to your client, within the body of your
motion to withdraw as counsel.
The judgment entered provides that Appellants pay to Appellees the

costs on appeal. A bill of cost form is available on the court’s
website www.ca5.uscourts.gov.
Sincerely,
LYLE W. CAYCE, Clerk
By: _______________________
Dantrell L. Johnson, Deputy Clerk
Enclosure(s)
Mr. Cody Matthew Akins
Mr. Jack R. Bierig
Mr. K. Lee Blalack, II
Mr. Brian Boynton
Mr. Eric D. Chan
Ms. Anna L. Deffebach
Mr. Long Xuan Do
Mr. Andrew Robert Hellman
Ms. Hyland Hunt
Ms. Brenna Jenny
Ms. Jaime L.M. Jones
Mr. Madeleine Joseph
Mr. Matthew W. Lanahan
Mr. Aaron D. Lindstrom
Mr. Eric Dean McArthur
Mr. Seth T. Perretta
Mr. Joshua Marc Salzman
Mr. Stephen Lee Shackelford, Jr.
Mr. Steven Shepard
Mr. James Craig Smyser
Mr. Kevin Benjamin Soter
Mr. Max Isaac Straus
Mr. Zach ZhenHe Tan
Mr. Ryan Temme
Mr. James Edward Tysse
Mr. Manuel Valle
Mr. Joseph J. Wardenski

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

United States Court of Appeals

Texas Medical Association; Tyler Regional Hospital,

United States Department of Health and Human

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

United States Department of Health and Human

Appeal from the United States District Court

Before King, Jones, and Oldham, Circuit Judges.

resolve insurance reimbursement disputes pursuant to the No Surprises Act

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

II. Interim Final Rule and Prior Proceedings

QPA as well as the generally qualitative additional circumstances listed in

regulations illegally placed upon arbitrators who have independent status

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

II. The Rule Conflicts with the Act

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

statutory boundary” beyond which the Departments were not authorized to

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

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

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

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

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

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

Faced with this statutory ambiguity, to determine whether the

United States Court of Appeals

August 02, 2024

Enclosed is a copy of the court’s decision. The court has entered

The judgment entered provides that Appellants pay to Appellees the

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