TMA Celebrates Appellate Court Ruling in Third NSA Lawsuit

On August 11, 2026, the U.S. Fifth Circuit Court of Appeals provided physicians with a win in a lawsuit related to the independent dispute resolution (IDR) process provided for by the federal No Suprises Act (NSA). The suit was brought by the Texas Medical Association and other plaintiffs. The court ruled that the federal government’s use of so-called “ghost rates” when determining the Qualifying Payment Amount (QPA) in the NSA’s arbitration process violated the NSA. The challenged rules were issued by HHS and the Departments of Labor and Treasury back in 2021. The decision will likely require the government to recalculate QPA rates, resulting in higher reimbursement payments to physicians and other care providers.

The court determined that the inclusion of ghost rates in QPA calculations wrongfully reduced the benchmark amounts used to determine reimbursements, thereby reducing reimbursements. A ghost rate is a placeholder rate that is included in the contract between a physician or provider and the insurance company. The placeholder is used to account for services that the particular physician does not provide. Often, the physician lists $1 to fill in the blank. Instead of excluding the placeholder rate, the government included the irrelevant figures, driving down the benchmark in the process.

The court cited arbitration results as evidence of the ghost rates impact. Physicians and other providers have won 80% of the cases that go to arbitration and have been awarded an amount above the QPA in 85% of cases.

The court found that the government agencies had failed to follow their typical rulemaking process back in 2021 when the rules were enacted. The court also found that the government was wrongfully excluding bonus amounts, also depressing the benchmark. Finally, the court did, in a win for the government, uphold the manner by which the government handles one-off emergency billing agreements, such as those for air ambulance services.

The court ruling allows the government to exercise its discretion as to whether to continue to use the current QPAs while the new calculations are made. This accommodation is intended to preserve balance billing protections for patients.