No Surprises, No Payment: When a Binding Arbitration Award May Not Be Worth the Paper It’s Written On

The No Surprises Act was designed to take patients out of the middle of medical billing disputes. But what happens when an insurer loses the dispute, and simply refuses to pay?

Congress enacted the No Surprises Act (NSA) in December 2020, with its principal protections taking effect in January 2022. Its central promise was straightforward: patients receiving certain emergency services or unknowingly receiving out-of-network care would no longer face unexpected, potentially devastating bills from out-of-network providers. Instead of fighting over payment with the patient, the provider and health insurer would resolve their disagreement with each other.

To accomplish that goal, Congress established a federal Independent Dispute Resolution (IDR) process. After an initial payment or denial and an opportunity to negotiate, either side can submit the payment dispute to a certified IDR entity. The arbitrator considers the parties’ submissions and selects one of their competing payment offers. It is a form of baseball-style arbitration intended to deliver a final answer without prolonged litigation.

A Binding Award. A Thirty-Day Deadline. and Then What?

Congress did not leave the effect of an IDR decision to guesswork. The NSA says the determination ‘shall be binding upon the parties involved,’ subject to narrow exceptions, and that the required payment ‘shall be made’ directly to the provider within 30 days. 42 U.S.C. § 300gg-111(c)(5)(E), (c)(6).

Those are unusually clear instructions. Yet providers across the country have reported that insurers sometimes fail to pay awards they have lost. The result is a second dispute, not over the proper reimbursement amount, which the arbitrator has already decided, but over whether the insurer must honor the decision at all.

The practical consequences are substantial. Providers incur the expense of delivering care, pursuing negotiation, and participating in IDR, only to discover that winning an award may be easier than collecting it. Notably, the patients that Congress intended to protect are no longer available as a source of payment for the amounts the statute prohibits providers from billing them.

The Insurers’ Defense: No Private Right to Enforce the Award

When providers sue to collect unpaid IDR awards, insurers have advanced a remarkable defense: even if the award is binding and the statute directs payment within 30 days, the NSA does not expressly authorize a private lawsuit to enforce it. In their view, enforcement belongs to government regulators, not to the provider holding the unpaid award.

That position has found support in two federal appellate courts. In Guardian Flight, L.L.C. v. Health Care Service Corp., 140 F.4th 271 (5th Cir. 2025), the Fifth Circuit held that the NSA does not create a private cause of action to enforce IDR awards. The Second Circuit reached the same conclusion in East Coast Advanced Plastic Surgery, LLC v. Cigna Health & Life Insurance Co., 2026 WL 2751786 (2d Cir. Sept. 17, 2026), affirming dismissal of an action seeking to recover more than $3 million in unpaid awards.

These courts reasoned that Congress did not provide an express private enforcement mechanism and that the statute’s structure did not justify implying one. The existence of a statutory payment obligation, they concluded, does not by itself authorize a private suit. That is a significant obstacle for providers in those circuits and an issue with potentially nationwide consequences.

The distinction is not merely technical. In East Coast Advanced Plastic Surgery, the Second Circuit acknowledged that the NSA contains language creating a right to payment, but concluded that Congress did not also create a private remedy, the court pointed to a network of federal and state enforcement powers as evidence that Congress entrusted compliance to regulators. The court also rejected the Declaratory Judgment Act as a workaround: a declaration cannot supply the underlying cause of action that Congress did not provide.

The insurers also rely on the NSA’s limited reference to the Federal Arbitration Act. Congress expressly permitted challenges to IDR awards on narrow grounds drawn from Section 10(a) of the FAA, but chose not to incorporate Section 9, which governs judicial confirmation of conventional arbitration awards. Because federal IDR is a statutory process rather than arbitration pursuant to a written agreement, courts have generally rejected attempts to invoke FAA Section 9 independently.

Other Courts See a Fundamental Contradiction

Not every federal court agrees with the Fifth and Second Circuits. A number of district courts have concluded that the same statutory text the appellate courts read as silent on enforcement in fact compels a private remedy, and they frame the insurers’ position as an untenable contradiction. If an IDR determination is “binding,” and payment “shall be made” within 30 days, how can it be that no court may order the insurer to pay?

The District of Maryland confronted that question directly in PHI Health, LLC v. Optimum Choice, Inc., 826 F. Supp. 3d 654 (D. Md. 2026), and denied the insurer’s motion to dismiss. The court reasoned that the NSA’s “shall pay” command is “a money-mandating obligation” that creates both a right and a remedy, specifying the amount owed (the IDR award), the payee (the provider, directly), and the deadline (30 days). Having first stripped providers of the right to bill patients for protected amounts, the court explained, Congress did not then leave them with a right but no way to vindicate it. It recognized “a very narrow private right of action to convert a ‘binding’ IDR determination to a judgment” when the insurer refuses to pay.

PHI Health also took apart the textual arguments the Fifth and Second Circuits had found decisive. The statutory bar on “judicial review,” the court held, addresses a losing party’s attempt to challenge an award, not a prevailing party’s suit to enforce one. Congress had no need to incorporate Section 9 of the FAA, which converts a private arbitration award into a judgment, because the NSA already declares the award “binding” on its own terms. And the Department of Health & Human Services (HHS) penalties the appellate courts treated as the exclusive remedy “do not empower agencies to enforce individual IDR awards”: they are payable to the government rather than the provider, capped without regard to the size of the award, and do nothing to make the provider whole.

The Enforcement Gap: Regulators Can Penalize, But Who Collects?

The NSA is not devoid of enforcement mechanisms. Depending on the plan and insurer, state regulators and federal agencies, including the Department of Health and Human Services, the Department of Labor, and the Treasury Department, have compliance authority. HHS may impose civil money penalties of up to $100 per day per affected individual under 42 U.S.C. § 300gg-22. Providers can report nonpayment through the federal NSA complaint process.

But a penalty paid to the government is not the same thing as payment of an award to a physician. The administrative scheme does not expressly provide the prevailing provider with an order compelling the insurer to satisfy a particular IDR determination. The Maryland court in PHI Health highlighted that mismatch: government enforcement may punish noncompliance without making the provider whole. And a penalty that bears little relationship to the size of an unpaid award may offer insufficient incentive to pay it.

Congress Cannot Have Intended “Binding” to Mean Optional

There are legitimate debates over the IDR system, including the size of some awards, the volume of disputes, and whether the process is being used as Congress envisioned. Those debates deserve attention. But they are separate from a narrower question: what should happen after a certified IDR entity has issued a final award and the statutory payment deadline has passed?

Insurers should have meaningful opportunities to raise eligibility objections and to challenge awards on grounds the law permits. What they should not have is an indefinite option to ignore an adverse determination while the prevailing provider bears the cost of the impasse. Whether through further legislation, appellate reconsideration, or more effective administrative action that actually secures payment, the enforcement gap demands a solution.

Congress promised patients that surprise billing disputes would be resolved between insurers and providers. It also promised those parties a binding resolution. Unless that second promise has consequences, the NSA risks delivering a new surprise: winning the arbitration may or may not mean you will be paid, based on how the insurer chooses to honor, or ignore, its obligation to pay.