On August 11, 2026, the U.S. Court of Appeals for the Fifth Circuit ruled that the federal government used two unlawful methods to calculate how much insurance companies must pay out-of-network emergency providers. These flawed methods are part of the "qualifying payment amount," or QPA—the federal benchmark that determines how much you can be charged when you receive a surprise emergency bill.
The court found the formula systematically underpaid providers and violated the No Surprises Act, a 2020 federal law designed to protect patients from unexpectedly large medical bills. The decision creates confusion because the court struck down the regulations but allowed federal agencies to keep using the existing formula indefinitely while developing a replacement. For patients dealing with out-of-network emergency bills, this means the formula you were or will be charged under is legally invalid—but still in use.
Table of Contents
- The Two Calculation Methods the Court Rejected
- Who Challenged the Formula and Why
- The Legal Status Remains Unclear
- How This Affects Your Out-of-Network Emergency Bills
- What You Should Do Now
- Frequently Asked Questions
The Two Calculation Methods the Court Rejected
The Fifth Circuit identified two specific problems federal agencies made when creating the QPA formula. The first problem: the formula was allowed to include "ghost rates"—contracted payment rates for services a provider does not actually furnish. When insurers included these phantom rates in their calculations, they artificially lowered what the federal formula said out-of-network providers should be paid, often below what those services actually cost in the market.
The second problem: federal agencies unlawfully excluded bonuses, incentives, quality-based payments, and other additional compensation from the QPA calculation. The statute requires the formula to account for a provider's "total maximum payment," but federal agencies interpreted this too narrowly, leaving out money doctors actually received. The court upheld one part of the formula: the inclusion of single-case agreement rates (one-off contracts between insurers and individual providers) were allowed to factor into the calculation.
Who Challenged the Formula and Why
The Texas Medical Association, physician groups, and air ambulance operators filed this lawsuit because they argued the QPA formula systematically underpaid them for out-of-network emergency care. From their perspective, the formula did not reflect actual market rates or total compensation doctors received. This is the third major Fifth Circuit decision on No Surprises Act implementation, reflecting ongoing disputes about how the federal law is being applied.
The Legal Status Remains Unclear
Here is where it becomes confusing for patients: the court vacated the regulations, but the court's opinion allowed federal agencies to continue using the existing formula operationally while developing a compliant replacement. This means the formula has been ruled unlawful, but you can still be billed under it.
The bigger problem: as of mid-September 2026, the Departments of HHS, Labor, and Treasury have not announced a timeline or proposed replacement formula. This legal limbo means you could receive a bill calculated under a formula a federal court has deemed illegal, with no clear end date for that situation. Agencies are allowed to keep using the defective formula indefinitely while they work on a fix.
How This Affects Your Out-of-Network Emergency Bills
The No Surprises Act protects patients from surprise bills when emergency care comes from out-of-network providers. When you and your insurer disagree about how much an out-of-network emergency provider should be paid, the QPA serves as a key benchmark in the dispute. The court's ruling could increase out-of-network payments to providers by removing the artificial rate suppressions built into the current formula, which would likely increase what insurers pay.
Whether that increase gets passed to you as a patient—through higher premiums, higher deductibles, or higher coinsurance—depends on your specific insurance plan. The full financial impact remains uncertain until federal agencies adopt a new formula. For patients who already received out-of-network bills resolved under the current QPA, this ruling does not automatically reopen those cases or invalidate what you paid.
What You Should Do Now
If you are dealing with an out-of-network emergency bill: Until federal agencies publish and implement a new formula, your out-of-network emergency bills will continue to be calculated using a method that a federal court has ruled unlawful.
- Keep all documentation of how the bill was calculated and ask your insurer which version of the QPA was used.
- If you are currently in a billing dispute with your insurance company, request a written explanation of the calculation method.
- Do not assume a bill resolved using the current QPA is final. If the amount seems excessive, consult a patient advocate, billing advocate, or attorney before paying.
- Watch for federal agency announcements about a replacement formula through HHS, the Department of Labor, or the Department of Treasury.
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Frequently Asked Questions
Will bills I already paid be recalculated under a new formula?
Not automatically. The court's ruling does not reopen existing bills resolved under the current formula. However, if you believe the calculation was incorrect, you may appeal through your insurance company's appeals process or with help from a patient advocate.
When will the new QPA formula be announced?
As of September 2026, no timeline has been announced. Agencies can legally continue using the current formula indefinitely while developing a replacement.
Does this ruling mean I shouldn't pay my out-of-network emergency bills?
No. You remain legally obligated to pay. However, document the calculation method and the date. If the amount seems unreasonable, consult a patient advocate before payment to understand your options. —