Precedents Cited
1) Statutory interpretation and definitional skepticism
The court’s “plain text” emphasis echoes the interpretive approach seen in Clackamas Gastroenterology Assocs., P. C. v. Wells,
538 U.S. 440 (2003), cited for criticizing circular statutory definitions. Here, the court treated the NSA’s phrasing
(“provided by a provider”) as awkward but meaningful, using it to reject including rates tied to services not actually furnished.
2) Arbitrary-and-capricious review and agency rationales
Although the per curiam grounded its holdings largely in statutory text, the opinion also framed the agencies’ approach as
“arbitrary, capricious, and otherwise contrary to law,” especially given the internal inconsistency of excluding $0 ghost rates
yet including $1 ghost rates. The court’s skepticism toward after-the-fact agency explanations aligns with
SEC v. Chenery Corp., 318 U.S. 80 (1943), invoked in Part III to reject post hoc rationalizations.
3) The scope of “contracted rates” and plan-based context
In upholding exclusion of single-case agreements, the court relied on ordinary meaning and statutory context:
“rate” connoting a per-unit price under generally applicable plan terms, not an ad hoc emergency arrangement.
The opinion distinguished other regulatory contexts that treat single-case agreements as “contractual relationships,”
emphasizing that definitional choices in one NSA subsection do not dictate what counts as “contracted rates” for QPA purposes.
The panel’s earlier treatment in Tex. Med. Ass'n v. HHS, 120 F.4th 494 (5th Cir. 2024), reh'g en banc granted, opinion vacated, 138 F.4th 961 (5th Cir. 2025)
is referenced as background; the en banc court ultimately agreed with the agencies on this single-case question.
4) APA remedies and vacatur
The remedy discussion is anchored in Cargill v. Garland, 57 F.4th 447 (5th Cir. 2023) (en banc),
which the court cites for the proposition that vacatur is the default APA remedy in the Fifth Circuit.
Judge Ho’s concurrence, however, raises constitutional concerns about “universal vacatur,” drawing parallels to the Supreme Court’s
critique of universal injunctions in Trump v. CASA, Inc., 606 U.S. 831 (2025). He invokes additional limits on the judicial power
from TransUnion LLC v. Ramirez, 594 U.S. 413 (2021), and Muskrat v. United States, 219 U.S. 346 (1911),
and highlights structural objections similar to those discussed in United States v. Texas, 599 U.S. 670 (2023) (Gorsuch, J., concurring in the judgment),
and Trump v. Hawaii, 585 U.S. 667 (2018) (Thomas, J., concurring).
Still, he acknowledges circuit precedent and also notes Corner Post, Inc. v. Bd. of Governors of Fed. Rsrv. Sys., 603 U.S. 799 (2024) (Kavanaugh, J., concurring),
which states that the APA authorizes vacatur of agency rules.
5) Procedural administrative law (in concurrence)
Judge Oldham’s concurrence reframes the case as a cautionary tale about agencies issuing interim-final rules without notice-and-comment
and then attempting to “fix” problems via FAQs. He canvasses procedural doctrines and authorities including
Bennett v. Spear, 520 U.S. 154 (1997), Michigan v. EPA, 576 U.S. 743 (2015),
DHS v. Regents of the Univ. of Cal., 591 U.S. 1 (2020), and Fifth Circuit law on distinguishing legislative rules and guidance,
including Mock v. Garland, 75 F.4th 563 (5th Cir. 2023), Texas v. Equal Emp. Opportunity Comm'n, 933 F.3d 433 (5th Cir. 2019),
and Flight Training Int'l, Inc. v. FAA, 58 F.4th 234 (5th Cir. 2023). While these points did not control the per curiam’s merits holdings,
they underscore litigation risk where agencies use informal guidance to effect substantive change.
6) Competing interpretation (partial dissent)
Judge Haynes’s partial dissent relies on ordinary meaning for “provide” as “make available,” citing
Green Valley Special Util. Dist. v. City of Schertz, 969 F.3d 460 (5th Cir. 2020) (en banc),
and reads the NSA’s delegation clause as allowing exclusion of non-fee-for-service incentive payments.
The majority rejects these readings as inconsistent with the “furnished” limitation and “total maximum payment” requirement.
Legal Reasoning
1) Ghost rates cannot be used to compute a statutory “median” for services “provided” and “furnished”
The majority treated the QPA definition as textually bounded: the median must be drawn from contracted rates for the
“same or similar item or service” that is “provided” and “furnished” in the relevant region. The July Rule’s “each contracted rate”
instruction swept in default-fee-schedule entries for services a given provider never performs. In the court’s view,
that severs the benchmark from actual market negotiation for delivered care—precisely what the QPA is supposed to approximate.
The court found the agencies’ $0-only carve-out (via FAQ) especially revealing: if $0 rates are excluded because the provider did not truly
agree to provide a service for free, then unnegotiated $1 rates (and other placeholder amounts) are similarly non-probative of market negotiation.
The court thus treated the rule’s distinction as untenable under the statute.
2) “Total maximum payment” means the entire maximum payment, including incentives/bonuses
The agencies’ exclusion of bonuses and incentive-based adjustments conflicted, in the majority’s view, with the NSA’s demand that the rate reflect
the “total maximum payment.” The court relied on ordinary dictionary meaning (“total” as the whole; “maximum” as the greatest attainable),
concluding that removing components of payment necessarily understates the contractual maximum.
The agencies argued incentives are often paid as lump sums and not attributable to specific services, and that feasibility concerns warranted exclusion.
The majority responded that Congress expressly instructed agencies to “take into account” non-fee-for-service payments in rulemaking, and that
administrative difficulty does not justify contradicting clear statutory text—particularly where the agencies chose an interim-final rule without
notice-and-comment that could have developed an administrable methodology.
3) Single-case agreements are not “contracted rates” recognized “under” a plan
The court upheld excluding single-case agreements, reasoning that “rate” ordinarily connotes a generalizable per-unit price, while an ad hoc,
emergency, out-of-network payment resembles a one-off “price.” Even if contractual in some sense, such arrangements are not “recognized under” the
plan in the way network contracts are; they arise precisely because no generally applicable plan term covers the circumstance at in-network rates.
The court also drew structural support from the NSA’s use of a fixed reference date (January 31, 2019) for recognized rates—awkward to apply to
one-off emergency encounters—reinforcing that Congress had generally applicable contractual schedules in mind, not event-specific bills.
4) Remedy: vacatur is default; enforcement discretion can prevent patient harm
Applying Cargill v. Garland, the court treated vacatur as the presumptive remedy under 5 U.S.C. § 706.
It rejected arguments that vacatur would be too disruptive, stating the APA contains no “too-big-to-vacate” principle.
It also relied on the practical availability of agency enforcement discretion to preserve the NSA’s balance-billing protections while corrected QPAs are computed.