Judge Rules No Surprises Act Arbitration Decisions Hard to Overturn

A federal judge has dismissed a lawsuit by a health insurer seeking to overturn arbitration decisions under the No Surprises Act, reinforcing the legal principle that independent dispute resolution awards are extremely difficult to challenge in court.

The ruling, issued this week in a case involving HaloMD and Blue Cross California, underscores a long-held truism in administrative law: arbitration decisions function like cockroaches — they are very hard to kill. The judge’s decision not only denied the insurer’s request to vacate the awards but also signaled that similar pending lawsuits challenging No Surprises Act arbitration outcomes face steep legal hurdles.

“You can’t second guess the arbitrators,” said Chris Deacon, a health policy consultant and former lawyer. “That’s the whole point of arbitration.”

The No Surprises Act, enacted as part of the Consolidated Appropriations Act of 2021, established an independent dispute resolution (IDR) process to resolve payment disagreements between health care providers and insurers for out-of-network emergency and non-emergency services. Under this system, when negotiations fail, a certified arbitrator selects either the provider’s offer or the insurer’s offer based on a set of statutorily defined factors, with the qualifying payment amount (QPA) serving as a key reference point.

However, recent legal challenges have questioned whether federal agencies overstepped their authority in shaping how arbitrators should weigh those factors. In September 2024, the Fifth U.S. Circuit Court of Appeals vacated parts of a Department of Health and Human Services rule, ruling that the government had imposed “extrastatutory requirements” by dictating how certain circumstances should be prioritized in the IDR process. The court found that nothing in the No Surprises Act instructs arbitrators to weigh any one factor more heavily than others, nor does it authorize agencies to superimpose regulatory rules on the statute’s clear mandate.

That decision was welcomed by physician groups, including the Texas Medical Association, which argued that the original rule favored insurers and undermined Congress’s intent for a fair, balanced process. The American Medical Association supported the challenge with amicus briefs at both district and appellate levels.

Despite that appellate win for providers, enforcing arbitration awards remains legally fragmented. A July 2025 analysis noted a split between the Fifth Circuit and the Federal District Court of Connecticut over whether providers can sue to compel insurers to pay arbitration awards. While the Connecticut court recognized an implied private right of action to enforce awards, the Fifth Circuit held that providers may only file complaints with the Department of Health and Human Services if they are not paid — significantly limiting their legal recourse.

More recently, in March 2026, reports emerged of coordinated legal efforts by insurers to use litigation to reshape the arbitration landscape, prompting concerns about the long-term stability of the No Surprises Act’s dispute resolution framework.

The latest federal court ruling adds to the growing body of precedent showing that courts are reluctant to interfere with IDR outcomes, even when parties dispute the reasoning behind them. For now, the decision reinforces the finality of arbitration under the law — a feature designed to reduce litigation but now presenting a barrier for those seeking to contest awards they believe are incorrect.