For the Sixth Time, Sidley-Represented Physicians Prevail in No Surprises Act Challenge

On August 11, 2026, the United States Court of Appeals for the Fifth Circuit issued an en banc opinion in favor of Sidley’s client, the Texas Medical Association (TMA), in TMA’s long-running challenge to regulations issued to implement the No Surprises Act (NSA). The Fifth Circuit, sitting in full, reversed a prior panel decision and reinstated the district court’s vacatur of two regulations governing the calculation of the “qualifying payment amount” (QPA) – the figure at the center of the NSA’s framework for resolving reimbursement disputes between healthcare providers and insurers. After a Fifth Circuit panel ruled against the TMA in October 2024, Sidley petitioned for en banc reconsideration. The Fifth Circuit agreed and held oral argument before all 17 active judges in September 2025.

The NSA — the most significant legislation affecting commercial insurance markets since the Affordable Care Act — bars providers from balance billing patients for certain out-of-network services, and channels decisions over provider reimbursement rates to a newly developed arbitration process. In Tuesday’s decision, the Fifth Circuit held that two regulations governing the calculation of payment amounts conflicted with the NSA’s plain text because they included “ghost rates” — rates for unprovided services — and excluded certain bonus and incentive payments, deflating the benchmark rates in favor of insurers. The en banc court also rejected the government’s argument — based on the Supreme Court’s decision in Trump v. CASA — that the Administrative Procedure Act (APA) does not authorize universal vacatur of agency rules, a decision which has significance for all litigation challenging federal agency action under the APA.

In the five years since the federal government began taking steps to implement the NSA, Sidley has represented the TMA in four lawsuits successfully challenging regulations that both diminish physician and hospital reimbursements for claims subject to the NSA and make it more challenging to access the arbitration process. With Tuesday’s ruling, the TMA adds a second appellate win and confirms its undefeated record in NSA litigation. This litigation was the product of a collaboration between Sidley’s Healthcare; Regulatory Litigation; and Supreme Court, Appellate, and Litigation Strategies practice groups. The team included Jaime Jones, Jillian Sheridan Stonecipher, Jon Zucker, Madeleine Joseph, Cody Akins, and George Maliha. Jillian Sheridan Stonecipher argued the case before the en banc Fifth Circuit.