PHI Health LLC et al. v. Department of Health and Human Services et al.

Docket No.
6:22-cv-00095
District Court
Kentucky Eastern

Goal

  • Block enforcement of an agency action
  • Declaration that agency action is unlawful

Issues

Why This Matters:

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) violate the Administrative Procedure Act and 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:

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.

News And Analysis (2)

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Related Litigation

Current Status

Case Stayed

Legal Issues

Fifth Amendment - Due Process Clause, Fifth Amendment - Takings Clause, Administrative Procedure Act - Contrary to Law, Administrative Procedure Act - Arbitrary and Capricious, Administrative Procedure Act - Lack of Statutory Authority, Administrative Procedure Act - Notice and Comment Violation

Topic(s)

Constitutional Challenges Qualifying Payment Amount

Date Filed
April 29, 2022
Case Type
Civil
Court Type
District Court
Court
Kentucky Eastern
Judge
Wier, Robert E. Appointed By: Donald Trump
Plaintiff(s)
PHI Health LLC; Empact Midwest LLC
Lead Counsel For Plaintiff(s)
Stites & Harbison, PLLC
Defendant(s)
Department of Health and Human Services; Robert F. Kennedy Jr.; Office of Personnel Management; Charles Ezell; Department of Labor; Lori Chavez-Deremer; Employee Benefits Security Administration; Timothy Hauser; Department of the Treasury; Scott Bessent; Internal Revenue Service; Michael Faulkender
Lead Counsel for Defendant(s)
Government