A recent federal appeals court decision has reaffirmed protections for health insurers and third-party arbitrators in disputes over out-of-network medical billing, offering insurers greater clarity on how the No Surprises Act applies in real-world payment negotiations.
On June 12, the Fifth Circuit Court of Appeals sided with Aetna and Kaiser Foundation Health Plan in a pair of consolidated cases brought by Guardian Flight and two other air ambulance firms. The providers had challenged arbitration outcomes that favored the insurers, arguing that both Aetna and Kaiser had misrepresented payment data during the federally mandated Independent Dispute Resolution (IDR) process.
At the heart of the dispute was how each insurer calculated what’s known as the Qualifying Payment Amount—the benchmark rate used to settle out-of-network claims. The air ambulance providers accused the insurers of lowballing those figures and failing to explain their math, potentially skewing the results in arbitration.
But the court wasn’t persuaded. In its decision, it said that while the No Surprises Act does allow for some limited court review of IDR outcomes, those challenges must be based on clear evidence of fraud or serious misconduct. The providers’ claims, the judges said, didn’t meet that threshold.
Importantly for insurers, the court also ruled that Medical Evaluators of Texas, the third-party arbitrator in these cases, is immune from being sued over its decisions. The panel said these entities, while not labeled as “arbitrators” in the legislation, perform the same function and deserve the same legal protections. That means insurers can continue to work with IDR entities without worrying that a disputed decision could come back to haunt them in court.
The decision offers some reassurance to insurers navigating the relatively new No Surprises Act framework. While the law is designed to protect patients from unexpected medical bills, it also introduced a complex claims resolution process that has sparked a wave of litigation.
For now, this ruling makes clear that courts are unlikely to second-guess how insurers present their payment offers in arbitration—unless there’s strong proof of intentional wrongdoing. It also confirms that arbitrators involved in the IDR process will remain largely shielded from legal blowback, helping preserve the neutrality and efficiency of the system.
No insurance policy terms were at issue in this case, but the outcome is still a procedural win for the insurance industry. It reinforces existing compliance strategies and offers more legal certainty for insurers as they settle disputes over emergency out-of-network care.
The ruling is final.
