Texas Medical Association v. HHS

Case: 23-40605 Document: 363-1 Page: 1 Date Filed: 08/11/2026 United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit ____________ FILED August 11, 2026 No. 23-40605 Lyle W. Cayce ____________ Clerk Texas Medical Association; Tyler Regional Hospital, L.L.C.; Dr. Adam Corley, Plaintiffs—Appellees/Cross-Appellants, versus United States Department of Health and Human Services; Office of Personnel Management; United States Department of Labor; United States Department of Treasury; Robert F. Kennedy, Jr., Secretary, U.S. Department of Health and Human Services, in his official capacity; Scott Kupor, Director of the Office of Personnel Management, in his official capacity; Scott Bessent, Secretary, U.S. Department of Treasury, in his official capacity; Keith Sonderling, Acting Secretary, U.S. Department of Labor, in his official capacity, Defendants—Appellants/Cross-Appellees, ______________________________ LifeNet, Incorporated; Air Methods Corporation; Rocky Mountain Holdings, L.L.C.; East Texas Air One, L.L.C., Plaintiffs—Appellees/Cross-Appellants, versus United States Department of Health and Human Services; Office of Personnel Management; United Case: 23-40605 Document: 363-1 Page: 2 Date Filed: 08/11/2026 States Department of Labor; United States Department of Treasury; Robert F. Kennedy, Jr., Secretary, U.S. Department of Health and Human Services, in his official capacity; Scott Kupor, Director of the Office of Personnel Management, in his official capacity; Scott Bessent, Secretary, U.S. Department of Treasury, in his official capacity; Keith Sonderling, Acting Secretary, U.S. Department of Labor, in his official capacity, Defendants—Appellants/Cross-Appellees. ______________________________ Appeal from the United States District Court for the Eastern District of Texas USDC Nos. 6:22-CV-450, 6:22-CV-453 ______________________________ Before Elrod, Chief Judge, Jones, Smith, Stewart, Richman, Southwick, Haynes, Graves, Higginson, Willett, Ho, Duncan, Engelhardt, Oldham, Wilson, Douglas, and Ramirez, Circuit Judges. Per Curiam: * The No Surprises Act (“NSA” or “the Act”) mitigates unexpected medical bills from out-of-network healthcare providers, especially in emergencies. The Act directs insurers and healthcare providers to negotiate reimbursement rates via an “independent dispute resolution process,” 42 U.S.C. § 300gg-111(c), rather than leaving patients responsible for the (potentially staggering) full balance of their treatment. That negotiation process centers on the “qualifying payment amount,” or QPA. This case concerns the methods used to calculate the QPA. The Act provides that the QPA is “the median of the contracted rates recognized by” _____________________ * Joined by Elrod, Chief Judge, and Jones, Smith, Richman, Willett, Ho, Duncan, Engelhardt, and Wilson, Circuit Judges. Judge Southwick concurs in Parts I and III. Judge Oldham concurs in part. 2 Case: 23-40605 Document: 363-1 Page: 3 Date Filed: 08/11/2026 No. 23-40605 an insurance plan “as the total maximum payment . . . for the same or a similar item or service that is provided by a provider in the same or similar specialty and provided in the geographic region in which the item or service is furnished.” Id. § 300gg-111(a)(3)(E)(i)(I). Or, in plain English: The QPA is the median of the total maximum rates in an insurer’s contract for an item or service that a provider provides and furnishes, sorted by specialty and geographic region. The NSA authorized the Departments of Health and Human Services, Labor, and Treasury (“the agencies”) to refine the methods used to calculate the QPA via rulemaking. Id. § 300gg-111(a)(2)(B). Plaintiffs 1 challenged three aspects of the agencies’ rulemaking. Plaintiffs claimed that the agencies’ rules were contrary to the NSA and arbitrary and capricious. The district court ruled for plaintiffs. A panel of our court reversed, and we granted en banc rehearing. See 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). This opinion proceeds in four parts. Part I considers whether insurers can include so-called “ghost rates” in the QPA. Part II considers whether insurers may exclude bonus and incentive payments from the QPA. Part III discusses whether insurers may exclude from the QPA one-off agreements for things like air ambulances. A majority of the en banc court agrees with plaintiffs on the first two issues but disagrees on the third. Finally, Part IV discusses the proper remedy. I Plaintiffs’ first argument concerns the rates included in the QPA calculation. We (A) discuss the relevant background, (B) show why the _____________________ 1 After en banc argument in this case, plaintiffs filed a suggestion of death as to Dr. Adam Corley. Unfortunately, he passed away on February 25, 2026. 3 Case: 23-40605 Document: 363-1 Page: 4 Date Filed: 08/11/2026 No. 23-40605 agencies’ rule contravenes the plain text of the NSA, and (C) respond to the agencies’ counterarguments. A The NSA defines the QPA as the “median of the contracted rates” for an “item or service that is provided by a provider in the same or similar specialty and provided in the geographic region in which the item or service is furnished.” 42 U.S.C. § 300gg-111(a)(3)(E)(i)(I). In July 2021, the agencies promulgated the so-called July Rule. See Requirements Related to Surprise Billing; Part I, 86 Fed. Reg. 36,872 (July 13, 2021). The July Rule is an interim-final rule, meaning that the agencies promulgated it without notice and comment. See id. at 36,917–18. This rule required that insurers treat “each contracted rate for a given item or service” as a “single data point when calculating a median contracted rate . . . regardless of the number of claims paid at that contracted rate.” Id. at 36,889. In other words, insurers were to include in the QPA calculation each rate that appeared on the face of their contracts with providers. This instruction was critical. When insurers and providers negotiate reimbursement rates for various items or services, insurers often present providers with form contracts that include a default fee schedule for all covered services. From there, providers negotiate the rates for services that they plan to provide but leave untouched the rates for services they do not provide (or at least do not plan to provide). As a result, contracts between insurers and providers often include non-negotiated “ghost rates” for services that providers do not actually provide. For example, an OB/GYN might choose not to deliver babies. So that provider’s fee schedule could include an unnegotiated ghost rate for various obstetrical services. Because providers have no economic incentive to negotiate rates for services they never plan to provide, the ghost rates can be quite low (in some cases, as low as $0). 4 Case: 23-40605 Document: 363-1 Page: 5 Date Filed: 08/11/2026 No. 23-40605 A little over a year after the agencies promulgated the July Rule, in August 2022, the agencies released a set of Frequently Asked Questions (“August FAQs”). In FAQ 14, the agencies recognized that the July Rule had instructed insurers to factor “each contracted rate” into the QPA calculation. But the agencies now directed insurers to exclude one set of ghost rates: $0 rates. The agencies had been “informed” that some provider- insurer contracts contained $0 as a reimbursement rate for items and services that providers were “not equipped to furnish.” So, the agencies directed that insurers “should not include $0 amounts in calculating median contracted rates.” The August FAQ nonetheless allowed insurers to continue including non-$0 ghost rates in the QPA. In sum, the NSA sets the QPA as the “median of contracted rates” for an “item or service that is provided by a provider.” 42 U.S.C. § 300gg- 111(a)(3)(E)(i)(I). The agencies’ rules direct insurers to include all rates appearing on the face of provider-insurer contracts—except $0 rates. B The July 2021 Rule was contrary to law, and the purported correction in the August FAQs only underscores that conclusion. The July Rule required that insurers treat “each contracted rate for a given item or service” as a “single data point when calculating a median contracted rate . . . regardless of the number of claims paid at that contracted rate.” 86 Fed. Reg. at 36,889 (emphasis added). By instructing insurers to use “each contracted rate,” the Rule required insurers to count the rate for each service that appeared on the face of the default fee schedules— regardless of whether the provider negotiated for them and regardless of whether the provider ever provided or furnished that service. That renders the July Rule unlawful because the Act limits the QPA to an “item or service that is provided by a provider.” 42 U.S.C. § 300gg-111(a)(3)(E)(i)(I) 5 Case: 23-40605 Document: 363-1 Page: 6 Date Filed: 08/11/2026 No. 23-40605 (emphasis added). Likewise, the statute limits the QPA to rates for items and services that are “provided in the geographic region in which the item or service is furnished.” Id. (emphasis added). If the provider submitted no claims and received no payments for a particular item or service—say, obstetrics not performed by a gynecologist—then that item or service was neither “provided by a provider” nor “furnished.” 2 Yet those items and services were included in the QPA under the July Rule. Placeholder rates of $0 were the clearest example. Ghost rates of $0 were technically a “contracted rate”—they appeared in the form contracts, even though the parties did not negotiate them. But it is undisputed that no provider ever agreed to provide any item or service for $0. See post, at 41 (Haynes, J., concurring in part and dissenting in part) (agreeing on this point). By requiring insurers to include $0 ghost rates in the QPA, the July Rule was arbitrary, capricious, and otherwise contrary to law. The agencies’ subsequent clarification that insurers exclude $0 rates only emphasizes that the July Rule was contrary to law. From the combination of the July Rule and August FAQs, $0 ghost rates must be excluded from the QPA—but below-market and concededly unnegotiated $1 ghost rates must be included. This distinction does not persuade. If a $0 ghost rate must be excluded because it’s obvious that a particular provider did not contract to provide anything for free, the same must be true for a below-market non-$0 (e.g., $1) ghost rate. Either the provider contracted for the rate, or he did not. If non-negotiated ghost rates must be excluded from _____________________ 2 “Provided by a provider” is the sort of phrase only a legislative staffer could love. It is reminiscent of the Americans with Disabilities Act, which defines an “employee” as “an individual employed by an employer”: “That surely qualifies as a mere nominal definition that is completely circular and explains nothing.” Clackamas Gastroenterology Assocs., P. C. v. Wells, 538 U.S. 440, 444 (2003) (quotation omitted). 6 Case: 23-40605 Document: 363-1 Page: 7 Date Filed: 08/11/2026 No. 23-40605 the QPA, as the August FAQ appeared to concede, then all ghost rates must be excluded. 3 The inclusion of ghost rates in the QPA calculation is no minor problem. One survey, for example, found that 68% of primary care professionals have contracts with rates for services they perform fewer than twice annually, and 57% of respondents had contracts with rates for services that they never provide. Indeed, even the agencies acknowledge this practice. In the August FAQs, they reported that some insurers “offer[] most providers the same fee schedule for all covered services, and then it is up to the providers to negotiate increases to the rates for the services that they are most likely to bill.” Thus, the ultimate provider-insurer contract will contain “modifications made only to certain service codes based on the negotiations”—in other words, many non-negotiated ghost rates. Yet the whole point of the QPA is to generate a reimbursement rate that “reflects market rates under typical contract negotiations.” 86 Fed. Reg. at 36,889. The July Rule and August FAQs, however, instruct insurers to calculate the QPA with non-negotiated ghost rates. The agencies’ error has upended the NSA’s dispute-resolution process. Congress intended the QPA to serve as a focal point of provider- insurer negotiations as to which party would cover the balance of a patient’s bill. See 42 U.S.C. § 300gg-111(c)(5)(C)(i)(I). Because the agencies directed _____________________ 3 The agencies now insist that the July Rule excluded $0 rates all along. But the record belies that proposition. See, e.g., 86 Fed. Reg. at 36,889 (July Rule mandating that “each contracted rate” factor into the QPA calculation); 45 C.F.R. § 149.140(a)(1) (defining “contracted rate” as the “amount” that an insurer “has contractually agreed to pay . . . for covered items and services”); ROA.11468 (August FAQs acknowledging that some providers “even accept[] $0 as their rate for codes they do not utilize” (emphasis added)). Regardless, it is undisputed that the agencies required insurers to include non- zero-dollar ghost rates (e.g., $1) in the QPA calculation. 7 Case: 23-40605 Document: 363-1 Page: 8 Date Filed: 08/11/2026 No. 23-40605 insurers to include non-negotiated ghost rates, the resulting QPAs were artificially low. How do we know? For one, the number of arbitrations dwarfed the agencies’ expectations by a factor of 84. For two, providers prevailed in over 80% of arbitrations. And for three, arbitrators selected a reimbursement rate higher than the QPA in a whopping 85% of arbitrations. These statistics underscore that the agency’s inclusion of artificially low reimbursement rates is contrary to the statutory text. C The agencies’ counterarguments are unpersuasive. As to statutory text, the agencies rely on the requirement that insurers use contracted rates for items or services “provided by a provider in the same or similar specialty.” 42 U.S.C. § 300gg-111(a)(3)(E)(i)(I) (emphasis added). The same-or-similar-specialty qualifier, the agencies argue, eliminates non- negotiated ghost rates. But providers in the same or similar specialties may not (and in fact, often do not) provide overlapping services. For example, “an obstetrician-gynecologist’s contract will likely include rates for delivery services, regardless of whether she ever performs deliveries.” Am. Med. Ass’n Amicus Br. at 11; see also id. (“Specialists like orthopedists typically focus on only certain parts of the body—yet an orthopedist’s contract will likely cover far more than that particular orthopedist’s specialty.”). So it is true that the same-or-similar-specialty requirement will eliminate some ghost rates—say, for a neurosurgeon who does not provide podiatry services. But the July Rule remains unlawful because it still includes rates for services that a provider does not provide. The agencies also contend that providers need only make a service “available,” and that they do so by contracting with insurers for the relevant rates. But the fact that a provider did not object to a ghost rate does not mean that ghost-rated service is “available.” As the agencies acknowledge, many 8 Case: 23-40605 Document: 363-1 Page: 9 Date Filed: 08/11/2026 No. 23-40605 fee schedules include non-negotiated rates for services that providers are “not equipped to furnish.” That admission contradicts the plain language of the statute, which requires that “the item or service is furnished.” 42 U.S.C. § 300gg-111(a)(3)(E)(i)(I). So even if the NSA requires that providers only make a service “available,” the July Rule and August FAQs still include rates for services that are indisputably unavailable. The agencies next argue that the phrase “provided by a provider” cannot be limited to services that providers perform but rather encompasses items or services that providers could perform in the future. But this argument does not fix the fundamental problem with the agencies’ action: The rules still require providers to include rates for items and services as low as $1. No provider would negotiate a reimbursement rate of $1 for, say, brain surgery that he has never provided but may happen to provide down the road. As the district court put it, the rules instruct insurers to include rates for items or services that “are not provided, never have been provided, and never will be provided.” So even assuming that “provided by a provider” includes services a provider has never provided but could theoretically provide in the future, the agencies’ rules still include rates that the statute precludes. Relatedly, the agencies say it is impracticable to figure out whether a provider actually provides a service. What is the relevant time period, they ask, for whether a provider has provided or will provide a service? That is a fair question, and it is one the agencies could have answered had they sought notice and comment to “ensur[e] that the QPA reflect[ed] market rates under typical contract negotiations.” See 86 Fed. Reg. at 36,889. Instead, the July Rule was an interim-final rule, meaning the agencies promulgated it without notice and comment. Id. at 36,917–18; see 5 U.S.C. § 553(b)(4)(B) (allowing agencies to eschew notice and comment upon a showing of “good 9 Case: 23-40605 Document: 363-1 Page: 10 Date Filed: 08/11/2026 No. 23-40605 cause”). So it is awkward, to say the least, for the agencies now to complain that they do not have sufficient information from providers. II Plaintiffs’ next argument concerns whether insurers may exclude certain bonus and incentive payments from the QPA calculation. We (A) explain the agencies’ error and then (B) address the agencies’ counterarguments. A The NSA requires that each contracted rate in the QPA calculation reflect the “total maximum payment” “under such plans or coverage” for an item or service. 42 U.S.C. § 300gg-111(a)(3)(E)(i)(I). Translated to plain English, that means that each contracted rate that factors into the QPA calculation is the highest possible amount in a provider-insurer contract for an item or service. In implementing this mandate, the July Rule required insurers to exclude “risk sharing, bonus, penalty, or other incentive-based or retrospective payments or payment adjustments.” 45 C.F.R. § 149.140(b)(2)(iv). Plaintiffs contend that this rule contravenes the plain text of the NSA and artificially deflates the QPA calculations. We agree. The word “total” means “[o]f, pertaining to, or referring to the whole of a thing, specified or implied, or the entire number of things concerned; not partial.” Total, Webster’s New International Dictionary 2675 (2d ed. 1934; 1950) (“Webster’s Second”); see also id. (“Comprising or constituting a whole or the sum of all parts, items, instances, etc.; entire[.]”). And “maximum” means “[t]he greatest quantity or value attainable in a given case” or “the highest point or degree.” Id. at 1517. That means the “total maximum payment” specified by § 300gg- 111(a)(3)(E)(i)(I) is the whole, entire payment and the sum of all payments from the insurer to the provider for the given item or service. If some of the 10 Case: 23-40605 Document: 363-1 Page: 11 Date Filed: 08/11/2026 No. 23-40605 providers’ payments come in the form of bonuses or incentives or other adjustments, they nonetheless must be included in the QPA for the relevant item or service. The agencies’ decision to exclude these payments means that the providers are receiving less than the “total maximum payment” specified by the statute. B Again, the agencies’ counterarguments are unpersuasive. The agencies first contend that excluding bonus and incentive payments makes the QPA better reflect the amount of money that an insurer reimburses a provider for a given item or service. As the agencies’ brief put it, bonus and incentive payments “are rarely tied to specific contracted rates for particular items and services” and are usually paid “as an annual lump sum.” See also 86 Fed. Reg. at 36,894 (making a similar point). It might be true that bonus and incentive payments are sometimes unconnected to an item or service—but it’s also true that such payments sometimes are connected. See TMA En Banc Br. at 39 (collecting examples). Moreover, in the statutory section describing the agencies’ rulemaking authority, Congress instructed that the agencies “shall take into account payments that . . . are not on a fee-for-service basis.” 42 U.S.C. § 300gg- 111(a)(2)(B). Bonus and incentive payments fall within this text. So the agencies cannot ignore or exclude them. Contra post, at 42 (Haynes, J., concurring in part and dissenting in part). The agencies again complain that it is infeasible or impractical to include bonus and incentive payments in the QPA. To the agencies, “[i]t is unclear how it would be possible to calculate the impact of bonus and incentive payments on the rate for a particular item or service when the provider and plan have agreed to rates established on a fee-for-service model.” And again, this is the sort of question that the agencies could have 11 Case: 23-40605 Document: 363-1 Page: 12 Date Filed: 08/11/2026 No. 23-40605 figured out in notice and comment. If the providers were given a chance to explain whether and to what extent bonus and incentive payments could be tied to items and services, then the agencies could have made rational decisions to include or exclude such payments from the QPA. But the agencies cannot promulgate the July Rule without input from providers and then complain that “[i]t is unclear how it would be possible” to include the providers’ total maximum payments in the QPA. III Plaintiffs’ third and final challenge relates to the agencies’ exclusion of one-off, case-specific agreements from the “contracted rates” used for the QPA calculation. On this question, we agree with the agencies. We (A) discuss the statutory text and the July Rule, (B) explain why the former does not prohibit the latter, and (C) respond to plaintiffs’ contrary arguments. A The NSA requires that insurers calculate the QPA based on the “contracted rates recognized” by a health plan “under such plans or coverage” within an insurance market. 42 U.S.C. § 300gg-111(a)(3)(E)(i)(I). In promulgating the July Rule, the agencies considered whether one-off, single-case agreements constitute “contracted rates” within the meaning of § 300gg-111(a)(3)(E)(i)(I). Single-case agreements between providers and insurers are prevalent in the air ambulance industry. Air ambulances assist critically ill patients who need emergency care and have few options. Air ambulance providers often fall outside a patient’s insurance network and often bill insurers for one-off ambulance services. The July Rule excised the rates used in one-off agreements from the QPA calculation: “[S]olely for purposes of the definition of contracted rate, a single case agreement, letter of agreement, or other similar arrangement . . . does not constitute a contract, and the rate paid under such 12 Case: 23-40605 Document: 363-1 Page: 13 Date Filed: 08/11/2026 No. 23-40605 an agreement should not be counted among the plan’s or issuer’s contracted rates.” 86 Fed. Reg. at 36,889. Or, put differently, “[t]he term ‘contracted rate’ refers only to the rate negotiated with providers and facilities that are contracted to participate in any of the networks of the plan or issuer under generally applicable terms of the plan or coverage and excludes rates negotiated with other providers and facilities.” Id. To the agencies, this approach “most closely align[ed] with the statutory intent of ensuring that the QPA reflects market rates under typical contract negotiations.” Id. The panel decision rejected plaintiffs’ challenges to this definition of “contracted rates.” Tex. Med. Ass’n, 120 F.4th at 506. Plaintiffs did not seek en banc rehearing on the question in their joint en banc petition, and the agencies did not mention it in their response. Rather, the air ambulance plaintiffs raised it in their supplemental en banc brief. In their view, single- case agreements are contractual arrangements to pay an agreed rate for a provider’s service, so they fall within the meaning of “contracted rate.” B The NSA does plainly cover single-case agreements such as the bills sent by air ambulances. The statute applies to “contracted rates.” 42 U.S.C. § 300gg-111(a)(3)(E)(i)(I). As used in the context of a contract, a “rate” is “[a] fixed relation of quantity, amount, or degree between two things; a ratio; proportion; also, a charge, payment, or price fixed according to a ratio, scale, or standard; as, a rate of ten cents a yard for cloth; the rate of exchange; the control of railroad rates.” Webster’s Second, supra, at 2065. That is, the word rate connotes a per-unit price for multiple units. It’s possible for a car-buyer to walk into the dealership and ask, “what is the rate for new Ram 3500s?” But the more common way to ask that question—at least for someone who’s buying one and only one pickup truck—is to say, “what is the price for a new Ram 3500?” The word rate does not most 13 Case: 23-40605 Document: 363-1 Page: 14 Date Filed: 08/11/2026 No. 23-40605 naturally fit one-off, single-use agreements such as the bills associated with air ambulances. Further, even if one-off agreements were somehow contracted rates, they are not rates “recognized” “under” an insurer’s plan or coverage. 42 U.S.C. § 300gg-111(a)(3)(E)(i)(I). The whole reason for single-case, ad hoc agreements is that they arise in emergency situations when insurers pay out- of-network providers at exceedingly high rates apart from any generally applicable health plan; if the insurers were paying “under” the health plan, no single-case agreement would be necessary. Thus, the agencies’ exclusion of single-case agreements from the rates contracted to under a health plan does not conflict with the statutory text. This conclusion fits with the context and structure of the NSA. As the district court put it, the QPA serves to approximate the “median rate the insurer would have paid for the service if provided by an in-network provider or facility.” But single-case agreements involve out-of-network providers’ performing emergency services that result in exorbitant, “surprise” charges to unwitting patients. That the No Surprises Act would incorporate such surprise rates into the QPA makes little sense. The point of the QPA is to “reflect[] market rates under typical contract negotiations.” 86 Fed. Reg. at 36,889; see also supra, Part I. Out-of-network charges for emergency care do not factor into this calculus. What’s more, Congress directed insurers to use rates recognized at a specific point in time: January 31, 2019. 42 U.S.C. § 300gg-111(a)(3)(E)(i)(I). That directive is difficult to square with single-use agreements that apply to one and only air ambulance trip. Does the NSA apply only to air ambulance trips that occurred on January 31? Or what if the air ambulance trip occurred on December 1, but the provider sent the bill (read: contract) on January 31? Would everyone agree that air ambulance trips that were neither taken nor 14 Case: 23-40605 Document: 363-1 Page: 15 Date Filed: 08/11/2026 No. 23-40605 billed on January 31, 2019, are excluded? The most logical answer is that “contracted rates” refers to generally applicable rates in provider-insurer contracts that existed on January 31, 2019. C The air ambulance plaintiffs raise several counterarguments. None is availing. First, plaintiffs point to supposedly contradictory interpretations within the agencies’ rulemaking. The agencies elsewhere recognize that a “single case agreement between a health care facility and a plan or issuer . . . constitutes a contractual relationship” for the purposes of defining participating emergency facilities and participating health care facilities under the Act. 45 C.F.R. § 149.30. But the “contractual relationship” provision defines which health care facilities are “participating” for the purposes of the Act. See 42 U.S.C. § 300gg-111(b)(2)(A)(i). Indeed, that whole subsection is concerned with the scope of the NSA’s protections— “Coverage of non-emergency services performed by nonparticipating providers at certain participating facilities.” Id. § 300gg-111(b). Whether a facility has a “contractual relationship” such that it is “participating” for the purposes of the Act says nothing about which “contracted rates” fit into the QPA calculation. See id. § 300gg-111(a)(3)(E)(i)(I). 4 The air ambulance plaintiffs also accuse the agencies of engaging in post hoc rationalizations. Of course, agencies have long been forbidden from _____________________ 4 Likewise, plaintiffs point to an inherent contradiction in including rates for items or services regardless of the number of claims paid at that rate but excluding single-case agreements. We agree—and thus vacate the parts of the July Rule that require insurers to include ghost rates. See Part I, supra. In both contexts—rates for services that providers do not provide, and rates for single-case agreements—neither number represents the negotiated market transaction that the QPA is meant to approximate. 15 Case: 23-40605 Document: 363-1 Page: 16 Date Filed: 08/11/2026 No. 23-40605 promulgating a rule on one basis and then defending it on another when haled into court. See SEC v. Chenery Corp., 318 U.S. 80, 93–95 (1943). But the agencies did not do so here. They justified the exclusion of single-case agreements on the grounds that the term “contracted rate” refers only to rates negotiated with providers “under generally applicable terms” of an insurer’s plan or coverage. 86 Fed. Reg. at 36,889. That is exactly the argument made here, which is that single-case agreements are neither generally applicable nor “under” the terms of a plan. Plaintiffs also argue that the agencies’ interpretation of “under” is wrong because if insurers are not paying providers “under” an insurance plan, then they are violating their fiduciary obligations to all other plan beneficiaries. But a plan may permit single-case agreements in the context of emergency care. That is a different question from whether an insurer’s reimbursement to a provider in that context is a “contracted rate” “under” the plan. See Tex. Med. Ass’n, 120 F.4th at 506 n.11. The air ambulance plaintiffs’ arbitrary-and-capricious arguments likewise fail. While in-network rates for emergency services may be “comparatively rare,” that does not mean high out-of-network rates fall within § 300gg-111(a)(3)(E)(i)(I). The whole point of the QPA is to approximate market rates for in-network services. “[M]any providers of air ambulance services . . . do not participate in insurer networks and have little incentive to do so.” 86 Fed. Reg. at 36,923. In fact, “provider avoidance of insurance network participation combined with aggressive collection practices has been described as a business strategy of some providers of air ambulance services.” Id. Because the air ambulance business model is built on avoiding in-network contracts, we cannot say it was arbitrary or capricious to exclude them from a scheme built on in-network contracts. 16 Case: 23-40605 Document: 363-1 Page: 17 Date Filed: 08/11/2026 No. 23-40605 IV Finally, the question of remedy. The Administrative Procedure Act (“APA”) provides that the “reviewing court shall . . . hold unlawful and set aside agency action . . . not in accordance with law.” 5 U.S.C. § 706. Our court has interpreted this text to make vacatur the APA’s default remedy. Cargill v. Garland, 57 F.4th 447, 472 (5th Cir. 2023) (en banc). “While vacatur does not fall in the standard list of remedies found in most casebooks . . ., vacatur fits the standard definition of a remedy, and the Supreme Court recognizes it as such.” Benjamin B. Johnson, A History of Vacatur, 135 Yale L.J. 761, 771 (2026) (collecting examples). In accordance with our precedent, the district court appropriately vacated the agencies’ actions. In this case, however, the agencies and the insurers insist that vacatur will create a host of practical problems. Not least among them is the considerable time it will take insurers to calculate new QPAs. The agencies also contend that, while the new QPA process is ongoing, American citizens could lose the protection of the NSA’s ban on balance billing. The APA, however, does not embrace a too-big-to-vacate principle. And administrative agencies cannot survive judicial review simply by making mistakes that are so colossal that the sky will fall if a court reviews them. Further, vacatur will not result in all-out chaos. As the district court observed, agencies “can exercise their enforcement discretion to allow insurers to continue using their existing QPAs until new QPAs are calculated consistent with the Act.” That way, patients will not be saddled with the balance billing of pre-NSA times. Indeed, the agencies have been exercising enforcement discretion while their appeal from the district court has been pending, so they are more than capable of preventing immediate chaos. 17 Case: 23-40605 Document: 363-1 Page: 18 Date Filed: 08/11/2026 No. 23-40605 * * * The judgment of the district court is AFFIRMED IN PART, REVERSED IN PART, and the case REMANDED for further proceedings consistent with this opinion. 18 Case: 23-40605 Document: 363-1 Page: 19 Date Filed: 08/11/2026 No. 23-40605 James C. Ho, Circuit Judge, concurring: I concur. I write separately because the Government has asked us to revisit whether the universal vacatur of an agency rule is even lawful—let alone the default rule—under the Administrative Procedure Act. See, e.g., Cargill v. Garland, 57 F.4th 447, 472 (5th Cir. 2023) (plurality opinion) (“vacatur of an agency action is the default rule in this Circuit”); Data Mktg. P’ship, LP v. U.S. Dept. of Labor, 45 F.4th 846, 859 (5th Cir. 2022) (same). I. Vacatur of an agency order is uncontroversial. No one disputes our authority to relieve a party of the burdens of an adverse order. And such relief implicates none of the dangers typically associated with universal relief. Universal vacatur of agency rules, by contrast, provides relief for non- parties as well as parties. And that challenges our basic conception of the judicial power under Article III of the Constitution. “[F]ederal courts do not exercise general oversight of the Executive Branch.” Trump v. CASA, Inc., 606 U.S. 831, 861 (2025). We “do not possess a roving commission to publicly opine on every legal question” or “exercise general legal oversight of the Legislative and Executive Branches, or of private entities.” TransUnion LLC v. Ramirez, 594 U.S. 413, 423–24 (2021). “It is not the role of the judiciary to check the excesses of the other branches, any more than . . . the excesses of any other American citizen.” A.A.R.P. v. Trump, 137 F.4th 391, 392 (5th Cir. 2025) (Ho, J., concurring). Under a proper and limited understanding of the judicial power, it is nothing more than the authority to “determine actual controversies arising between adverse litigants, duly instituted in courts of proper jurisdiction.” Muskrat v. United States, 219 U.S. 346, 361 (1911). “[O]ur job is simply to 19 Case: 23-40605 Document: 363-1 Page: 20 Date Filed: 08/11/2026 No. 23-40605 decide those legal disputes over which Congress has given us jurisdiction.” A.A.R.P., 137 F.4th at 392 (Ho, J., concurring). Universal vacatur challenges this foundational vision of the judicial power. In fact, universal vacatur presents many of the same challenges as the universal injunctions condemned in CASA. See, e.g., Ronald M. Levin, Vacatur, Nationwide Injunctions, and the Evolving APA, 98 Notre Dame L. Rev. 1997, 1999 (2023) (“In functional terms . . . a vacatur can have roughly the same effects as a nationwide injunction.”); United States v. Texas, 599 U.S. 670, 694–95 (2023) (Gorsuch, J., concurring in the judgment) (same). To begin with, universal remedies “take the judicial power beyond its traditionally understood uses” by “permitting district courts to order the government to act or refrain from acting toward nonparties.” Arizo