Phi Health, LLC et al. v. U.S. Department of Health and Human Services et al.

Why this Matters

The plaintiffs argue that regulations to impose guardrails on the No Surprises Act’s arbitration process—a process used to resolve payment disputes for surprise out-of-network bills between payers and out-of-network health care providers— and that outline the methodology used to calculate the qualifying payment amount for air ambulance services (the basis for determining individual cost sharing for items and services covered by the balance-billing protections), are invalid under the Administrative Procedure Act and in violation of the Takings Clause and Due Process Clause of the Fifth Amendment. If federal agencies cannot set reasonable guidelines for arbitrators, certain providers could be more likely to try to abuse this process to obtain higher payments, making the arbitration process more likely to become inflationary, and leading to higher health care costs and premiums. 

Potential Impact

The inability to impose reasonable guardrails for the No Surprises Act’s arbitration process could lead to abuses of the process and higher health care costs and premiums. Setting aside the methodology to calculate the qualifying payment amount for air ambulance services could also expose patients to higher cost sharing.