Regulation
Second Circuit rules No Surprises Act bars private lawsuits over billing awards
By Insurance Wire Staff, . Insurance Wire.
The Second Circuit ruled Thursday that the No Surprises Act does not provide a private right of action for enforcing independent dispute resolution awards in out-of-network billing cases, according to Law360 Insurance Authority, which identified the case as East Coast Advanced Plastic Surgery, LLC v. Cigna Health and Life Insurance Company. The court found that Congress intended enforcement of those awards to run through administrative processes, not private litigation.
The No Surprises Act, which took effect in 2022, established a federal arbitration process to resolve payment disputes between out-of-network providers and insurers, with the goal of shielding patients from unexpected bills. The central question in this case was what happens when one party refuses to comply with an arbitration award: can the other party sue directly in federal court, or must it go back through the regulatory apparatus?
The Second Circuit's answer is the latter. That is a significant constraint on providers in particular. Arbitration awards that a carrier does not honor now require a trip through administrative enforcement rather than a direct lawsuit, which adds time, cost and uncertainty to what providers may have assumed was a final resolution.
For carriers, the ruling reduces litigation exposure from non-compliant award scenarios, at least within the Second Circuit's jurisdiction. For out-of-network providers, especially surgical practices and specialists who rely heavily on the dispute resolution process, the decision narrows the remedies available when a payer does not pay.
Law360 Insurance Authority's report does not detail the court's full reasoning, the specific award amount at issue, or whether the panel addressed what administrative enforcement actually looks like in practice. That last gap matters: if the administrative pathway is slow or under-resourced, a ruling that forecloses private litigation may leave compliant awards effectively unenforceable in the near term.
The ruling applies within the Second Circuit, which covers New York, Connecticut and Vermont, three states with substantial commercial insurance activity. Whether other circuits reach the same conclusion is an open question, and a circuit split on this issue would likely draw Supreme Court attention. Providers and carriers operating across multiple jurisdictions should treat the legal landscape as unsettled until other circuits weigh in.
What to watch: whether the affected provider appeals, whether other circuits facing similar cases align with or diverge from the Second Circuit's reasoning, and whether federal regulators respond by clarifying or strengthening the administrative enforcement mechanism that the court has now designated as the only available path.
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