Payor-Provider Case Spotlight: The Second Circuit Holds That Providers Cannot Sue to Enforce No Surprises Act Arbitration Awards

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East Coast Advanced Plastic Surgery, LLC v. Cigna Health & Life Insurance Co., No. 25-2204, ___ F.4th ___ (2d Cir. Sept. 17, 2026), aff’g Nos. 25 Civ. 255, 25 Civ. 1686, 2025 WL 2371537 (S.D.N.Y. Aug. 14, 2025) | Guardian Flight, L.L.C. v. Health Care Service Corp., 140 F.4th 271 (5th Cir. 2025)

Healthcare / Payor-Provider Disputes · No Surprises Act · Independent Dispute Resolution (IDR)

Updated October 18, 2026, to reflect post-decision filings. See the dated update under What to Watch.

Introduction

The No Surprises Act (NSA) was designed to replace balance billing of patients and payment fights between payors and out-of-network providers with a streamlined arbitration process. When a provider and a health plan can’t agree on what an out-of-network service is worth, each submits an offer, and a certified independent dispute resolution (IDR) entity picks one of the numbers — it’s “baseball” arbitration. The statute provides that the result is “binding” and must be paid within 30 days, but does not say what happens when the plan doesn’t pay. Providers holding unpaid awards have argued that a binding award must be enforceable in court; health plans have argued that Congress left enforcement to regulators. District courts are divided, including within the Second Circuit, and in 2025 the Fifth Circuit adopted the plans’ reading in Guardian Flight, L.L.C. v. Health Care Service Corp., 140 F.4th 271 (5th Cir. 2025). On September 17, 2026, the Second Circuit agreed. In East Coast Advanced Plastic Surgery, LLC v. Cigna Health & Life Insurance Co., the court held that the NSA does not create an implied private right of action to enforce IDR awards, and that the Declaratory Judgment Act cannot supply one. It expressly left open another question the Fifth Circuit had answered: whether the NSA’s limit on judicial review bars suits to confirm IDR awards altogether.

Executive Summary

East Coast Advanced Plastic Surgery (ECAPS) performs breast reconstruction surgery for patients who have undergone mastectomies. It has no network contract with Cigna, but it does have a contract with MultiPlan, which sells network access to plan administrators including Cigna, under which Cigna was to pay a “Contract Rate” of 85% of ECAPS’s billed charges. According to the complaint, Cigna paid far less in the “overwhelming majority” of cases. ECAPS took the claims through the NSA’s IDR process and won awards exceeding $3 million. Cigna paid none of them. Cigna, for its part, alleges that ECAPS billed fraudulently and that Cigna overpaid it by $8.5 million, and it sued ECAPS under ERISA, the Declaratory Judgment Act and Connecticut law. ECAPS then sued Cigna, seeking a declaration that Cigna violated the NSA by failing to pay the award amounts.

The district court dismissed ECAPS’s complaint, holding that the NSA contains no express or implied private right of action to enforce IDR awards and that the Declaratory Judgment Act is not an independent source of one. The Second Circuit affirmed.

Background

The IDR process

Under the NSA, an out-of-network provider bills the patient’s plan rather than the patient, and the plan must make an initial payment or send a notice of denial within 30 days. A provider that disagrees can open negotiations and, if those fail, initiate the IDR process. Each side submits an offer, and the certified IDR entity selects one of them. The determination “shall be binding upon the parties involved” and “shall not be subject to judicial review, except in a case described in any of paragraphs (1) through (4) of section 10(a) of title 9” — the Federal Arbitration Act’s grounds for vacating an arbitration award. 29 U.S.C. § 1185e(c)(5)(E)(i)(I)–(II). Payment is due within 30 days of the determination. Id. § 1185e(c)(6).

Three codifications, three agencies

Congress conferred jurisdiction over the NSA on three different federal agencies: the Department of Labor (DOL), as the administrator of ERISA § 716, 29 U.S.C. § 1185e; the Department of the Treasury (Treasury), through the Internal Revenue Service (IRS), as the administrator of I.R.C. § 9816; and the Centers for Medicare & Medicaid Services (CMS) of the Department of Health and Human Services (HHS), which administers Public Health Service Act § 2799A-1, 42 U.S.C. § 300gg-111. Each codification reads the same, and the agencies execute them concurrently, including joint issuance of the IDR regulations and sharing responsibility for certifying IDR entities and setting the methodology for awards. CMS runs the federal IDR portal on behalf of all three agencies.

The NSA defines the jurisdiction of each agency by the type of coverage involved, so that each agency reaches a different set of plans and parties:

Private employer-sponsored group health plans, whether self-funded or insured, are covered by both the ERISA and Internal Revenue Code versions. DOL and Treasury share enforcement over them.
Church plans, which fall outside ERISA, answer only to the Code, and so to Treasury.
Non-federal governmental plans, such as those sponsored by state and local governments, fall under the Public Health Service Act and HHS.
Health insurance issuers are also governed by the Public Health Service Act, whether they sell group or individual coverage. Here the states are the primary enforcers, and CMS steps in only where a state lacks the authority or doesn’t substantially enforce.
Providers, facilities and air ambulance providers have their balance-billing obligations under the Public Health Service Act alone, enforced by the states and CMS.

The categories overlap in predictable ways. When an employer buys insurance, the insurer answers to the state or CMS, and the employer’s plan answers to DOL and Treasury.

This overlapping structure became the center of the ECAPS case. Each of the three statutes Congress amended comes with its own enforcement machinery. ERISA authorizes DOL to sue. The Code imposes an excise tax on the plan sponsor. The Public Health Service Act lets HHS impose civil money penalties and leaves the states to police insurers. The question was whether Congress, having spread enforcement across all of those mechanisms, also meant to let a provider holding an unpaid award go to court on its own.

The divided lower courts

Before ECAPS, district courts had gone both ways, including two in the District of Connecticut. Compare Guardian Flight LLC v. Aetna Life Ins. Co., 789 F. Supp. 3d 214, 229 (D. Conn. 2025) (finding an implied right of action), with Axis Neuromonitoring, LLC v. Aetna Inc., 824 F. Supp. 3d 217, 224 (D. Conn. 2026) (finding none, “as have most courts to consider the issue”).

Legal Analysis

The starting presumption runs against the provider. The court framed the question of a private right of action through Alexander v. Sandoval, 532 U.S. 275, 286–87 (2001), and two 2026 Supreme Court decisions applying the same approach, FS Credit Opportunities Corp. v. Saba Capital Master Fund, Ltd., 608 U.S. 608, 613 (2026), and Cisco Systems, Inc. v. Doe I, 146 S. Ct. 1882, 1890 (2026). Where a statute has no express private right of action, courts begin with the presumption that Congress did not intend one, and the text and structure must show “a clear manifestation” of intent to create both a private right and a private remedy. Lopez v. Jet Blue Airways, 662 F.3d 593, 596 (2d Cir. 2011).
“Shall pay” is rights-creating language, but it isn’t enough. The court accepted that the NSA’s payment provisions are the kind of rights-creating language that can imply a cause of action, citing its own decision in Murphy Medical Associates, LLC v. Yale University, 120 F.4th 1107, 1112 (2d Cir. 2024). But under Gonzaga University v. Doe, 536 U.S. 273, 284 (2002), a plaintiff must also show an intent to create a private remedy, and that is where ECAPS’s argument failed.
Congress imported the FAA’s vacatur provision, not its confirmation provision. The NSA incorporates FAA § 10, which lets a court vacate an award, but not FAA § 9, which lets a party confirm one. Congress has incorporated § 9 elsewhere — the Administrative Dispute Resolution Act makes awards enforceable “pursuant to sections 9 through 13 of title 9,” 5 U.S.C. § 580(c) — and the court read the omission here as deliberate, as the Fifth Circuit had. See Guardian Flight, 140 F.4th at 276–77. ECAPS argued that Congress didn’t need § 9 because it applies to arbitration under an agreement rather than a statute. The court pointed out that § 10 applies to agreement-based arbitration too, and Congress incorporated it anyway.
The enforcement scheme is administrative, and it interlocks. This is where the overlapping administrative structure set up by Congress becomes key. DOL can sue to enjoin violations by private employer-sponsored plans, 29 U.S.C. § 1132(a)(5). Treasury can impose an excise tax on a non-governmental plan that fails to meet the requirements, which include timely payment of IDR awards. I.R.C. § 4980D(a). HHS can impose civil money penalties on state and local governmental plans, 42 U.S.C. § 300gg-22(b)(2)(A). And states can enforce the requirements against health insurance issuers, id. § 300gg-22(a)(1). Under Sandoval, 532 U.S. at 290, the express provision of one method of enforcement suggests Congress meant to preclude others.
How vigorously the agencies enforce is beside the point. ECAPS made four related arguments, and the court rejected each.
- No enforcement power in the NSA. ECAPS argued that the NSA itself confers no enforcement power on DOL or Treasury. The court answered that Congress didn’t need to grant any. The NSA was written into ERISA and the Internal Revenue Code, and both already authorize agency enforcement: DOL’s power to sue dates to ERISA’s enactment in 1974, and Treasury’s excise tax was added to the Code in 1996. Once the NSA’s requirements became part of those statutes, the existing enforcement tools applied to them.
- Minimal enforcement by DOL. ECAPS argued that DOL’s enforcement of IDR awards has been minimal. The court held that the relevant question is whether Congress authorized agency enforcement, not how actively the agency uses it.
- Treasury can waive the tax. ECAPS pointed out that Treasury may waive the tax when a late payment isn’t due to willful neglect. The court said that an agency’s discretion to waive enforcement is no evidence that Congress intended a private right of action.
- The tax falls on the employer. For most plans, the tax falls on the employer rather than on the plan that failed to pay. The court noted that ECAPS cited no authority requiring enforcement power to run against the noncomplying entity itself.
“Binding” does not say who enforces. The court held that ECAPS’s reliance on the provision making the IDR entity’s choice between the two offers “binding upon the parties involved,” 29 U.S.C. § 1185e(c)(5)(E)(i)(I), begged the question, because the provision says nothing about who may enforce the determination. Cases enforcing “binding” awards under arbitration agreements did not address a statutory process subject to administrative enforcement.
Vacatur still has work to do without private enforcement. ECAPS argued that incorporating the grounds for vacatur under FAA § 10 would be pointless if no one could be compelled to pay. The court disagreed: a plan facing an unfavorable award may prefer to seek vacatur rather than ignore the award and risk administrative action, and a provider that believes the process was tainted and produced too low an award can seek vacatur as well. Quoting Guardian Flight, the court observed that Congress “may have judged it better to have an administrative enforcement mechanism handle most award disputes instead of throwing open the floodgates of litigation.” 140 F.4th at 277.
The Tucker Act and § 1983 analogies did not carry over. ECAPS relied on Maine Community Health Options v. United States, 590 U.S. 296 (2020), where the Supreme Court held that the Affordable Care Act’s command that the HHS Secretary “shall pay” insurers under the risk-corridors program let those insurers sue the government for the payments Congress later declined to fund. The Court observed there that “shall pay” language “often reflects congressional intent to create both a right and a remedy under the Tucker Act.” Id. at 324. But that holding arose under the Tucker Act, which waives the federal government’s sovereign immunity for money claims but requires a plaintiff to identify a separate statute that “can fairly be interpreted as mandating compensation by the Federal Government.” Id. at 322–23. Maine Community answered that money-mandating question. ECAPS presented a different one: whether Congress implied a private right of action against a private health plan, with no sovereign immunity and no Tucker Act claim involved. The court also rejected ECAPS’s reliance on 42 U.S.C. § 1983. In § 1983 cases, the statute itself supplies the remedy, so a plaintiff needn’t show that Congress intended one, but ECAPS’s claim rested on an implied right of action, where the plaintiff carries that burden.
No end-run through the Declaratory Judgment Act. Because the Declaratory Judgment Act does not create an independent cause of action, and ECAPS had no substantive claim of right under the NSA, its declaratory claim fell with its implied-right claim.

Holding

Affirmed. The NSA does not create an implied private right of action for a provider to enforce payment awards obtained through the IDR process, and the Declaratory Judgment Act does not supply an independent cause of action. The court assumed, without deciding, that the NSA’s judicial-review provision, 29 U.S.C. § 1185e(c)(5)(E)(i)(II), does not itself bar ECAPS’s suit.

What to Watch

The question the court reserved. Cigna argued that the NSA’s limit on “judicial review” bars any suit to confirm or enforce an IDR award, and the Fifth Circuit adopted that reading in Guardian Flight. The Second Circuit did not decide it. The difference matters only at the margins today, since neither circuit allows a private enforcement suit, but it would matter if a provider framed a claim some other way.
Further review. Two circuits now agree, and the court cited no circuit decision going the other way, which makes this an unlikely candidate for Supreme Court review unless a split develops. Absent a rehearing petition, a petition for certiorari would be due 90 days after judgment, on or about December 16, 2026.
Update (October 18, 2026). ECAPS petitioned for panel rehearing and rehearing en banc on October 1, 2026, and the petition is pending. Pet. for Reh’g, East Coast Advanced Plastic Surgery, No. 25-2204 (2d Cir. Oct. 1, 2026), Dkt. No. 82. The Emergency Department Practice Management Association and EMS Alliance filed an amicus brief supporting rehearing on October 13, 2026. If the court denies the petition, a petition for certiorari would be due 90 days after the denial. See Sup. Ct. R. 13.3.
Agency enforcement. With private suits foreclosed in two circuits, whether an unpaid IDR award gets paid now depends on DOL, Treasury, HHS and state insurance regulators. ECAPS’s argument that DOL enforcement has been minimal did not move the court, but it identifies the pressure point providers are likely to press next.
Claims the decision does not reach. The opinion addresses a claim to enforce the NSA itself. It does not address whether a provider can pursue other claims arising from the same services — for example, claims under a separate network agreement like the MultiPlan contract described in the complaint. Cigna’s related action against ECAPS, alleging $8.5 million in overpayments, was not before the court on this appeal.

What This Means for Resolving Payor-Provider Disputes

Arbitration finality means an award is hard to undo. Under the NSA as these two circuits read it, an IDR award is both hard to undo and unenforceable by the winner in court. The award still binds the parties, but its practical weight now depends on the regulatory risk the losing party runs by not paying, rather than on the threat of a judgment.

That changes what an unpaid award is worth at the negotiating table rather than whether it is worth anything. An IDR determination remains a neutral’s answer to what a set of services was worth, which gives both sides a shared reference point. Where, as here, a provider’s unpaid awards sit alongside a plan’s overpayment and fraud claims against the same provider, the disputes tend to travel together, and the two numbers tend to be resolved together rather than one at a time.

John Libby is an arbitrator, mediator, and settlement counsel with LibbyADR LLC. This post contains his own summaries of the decisions discussed, prepared for general informational purposes only. The summaries are not intended to be a complete statement of any court’s reasoning, nor should they be taken to indicate how he would rule as an arbitrator in any particular case. In addition, the summaries are not legal advice, nor should they be construed as legal advice. Readers should not act on these posts, but should review the decisions themselves and consult with legal counsel.