Fifth Circuit Strikes Down Inflated Insurance Payment Formulas

In the majority opinion, the court agreed with plaintiffs that the existing regulatory framework contravened the plain text of the No Surprises Act. By forcing insurers to include so-called ghost rates in their calculations, federal agencies had effectively upended the dispute-resolution process. These artificially low figures functioned as a primary driver for underpayment, distancing the Qualifying Payment Amount from the median in-network rates that Congress originally intended to reflect.

Alla LaRoque, president and CEO of HaloMD, described the previous methodology as detached from reality, noting that transparent calculations are essential for sustainable access to care. The ruling arrives as a significant shift for providers who have long argued that predatory insurance practices diverted resources away from patient care. Patrick Velliky, HaloMD’s chief external affairs officer, stated that the decision removes a critical tool used by insurers to systematically underpay medical professionals. This judicial intervention forces a recalibration of how insurers determine reimbursement, potentially stabilizing the financial landscape for the 25,000 providers supported by HaloMD’s dispute resolution services.