A Second Circuit Setback, a New Jersey Win, and What Comes Next for Unpaid IDR Awards
Carriers got a significant appellate win last week on the enforcement of No Surprises Act awards. Within days of it, a New Jersey trial court and the state’s Supreme Court each handed providers a meaningful victory. This article covers both, along with the other NSA developments from the past two weeks.
The Second Circuit Rules Against Providers
On September 17, the Second Circuit decided East Coast Advanced Plastic Surgery v. Cigna. ECAPS held more than $3 million in IDR awards that Cigna never paid. It asked a federal court to declare that Cigna owed the money and had violated the NSA. The trial court dismissed the claim, and the Second Circuit affirmed, joining the Fifth Circuit in holding that the NSA contains no private right of action to enforce IDR awards.
A private right of action is easiest to explain with a speeding ticket. If someone drives past your house at 80 in a 25, they broke the law, but you cannot sue them for speeding. Only the police can write that ticket. The court held that the NSA works the same way: carriers must pay awards within 30 days, but only the government can enforce that rule. In the court’s words, Congress intended that payment of IDR awards “be enforced through administrative action rather than private litigation.”
The reasoning rested on two points. First, the NSA borrows the Federal Arbitration Act’s rules for vacating an award but not its rule for confirming one, and the court read that omission as deliberate on Congress’ part. Second, Congress assigned enforcement to the Departments of Labor, Treasury and HHS and to the states, which the court took as a sign that private lawsuits were not intended.
Where the Ruling Applies, and What It Left Alone
The Second Circuit covers New York, Connecticut and Vermont, and every federal judge in those states must now follow ECAPS. It does not bind federal courts elsewhere, including New Jersey, and it does not bind state courts in any state, although carriers will cite it everywhere. Two circuits have now sided with carriers and none with providers, so Supreme Court review is unlikely for now.
Fortunately for providers, the decision is narrower than it first appears. The court agreed that the NSA uses “rights-creating language” and gives providers a right to payment. It declined to adopt the Fifth Circuit’s broader view that the NSA bars suits to confirm awards. It also said nothing about state law claims.
The Court Says Go to the Agencies, and the Agency Closes the File
ECAPS argued that actual agency enforcement is minimal. The court responded that the question is whether Congress authorized enforcement, “not how actively the agency exercises its authority.” Emails recently filed in a Connecticut federal case show how that plays out. An air ambulance provider filed complaints over 29 unpaid awards.
The Department of Labor reported making “multiple outreach efforts” to the carrier, received no response, and wrote: “Because our ability to move forward is limited by the lack of response and information from the insurer, we must close our review at this time.” DOL added that the provider remained free to pursue “other available options or legal remedies.”
So, the court sends providers to the agency, and the agency sends them back to the courts. The statute allows penalties of up to $100 per day, payable to the government rather than the doctor. However, I am not aware of a single one being imposed nationwide to date.
There are paths that remain open for providers.
Summary Confirmation
In Agag v. Cigna, a case our firm is handling, Judge Underhill of the District of Connecticut agreed that the NSA gives providers no right to sue for damages. He still confirmed unpaid IDR awards and entered judgment for the full amounts. His reasoning was that a private right of action is needed only to litigate the merits, and the IDR entity has already decided the merits.
Confirmation is a “purely ministerial” act, much like registering another court’s judgment. ECAPS did not address this theory, and it expressly left open whether the NSA bars confirmation suits. Cigna has appealed, and it will argue that ECAPS defeats this theory too. That question remains open.
State Law Claims
On September 11, 2026, in Havriliak v. Nippon Life, a Bergen County judge denied a carrier’s motion to dismiss in a case argued by G&G associate, Ronald Herman, Esq. A motion to dismiss is the carrier’s attempt to end a case at the starting line. Surviving one is not a final win, but it means the court accepted that the legal theory is valid. Nippon had ignored the IDR process entirely, lost an award of roughly $20,000, paid about $1,000, and then argued that only HHS can enforce the NSA.
We did not ask the court to enforce the award. We brought ordinary state law claims, including quantum meruit, unjust enrichment and account stated, and offered the IDR award as evidence of what the services were worth.
Judge Beukas allowed all five causes of action to proceed, ruling that “a healthcare provider is not barred from using an NSA IDR award as evidence of the fair market value of services rendered in a state common law action.” He called the situation “a disturbing set of facts for a doctor” bound by a federal procedure “for which there appears to be no ultimate enforcement mechanism.”
About agency enforcement, he asked: “how does that get the doctor paid at the end of the day?”
NJ Supreme Court Refuses to Consolidate IDR Lawsuits
Horizon asked the New Jersey Supreme Court to designate the state’s IDR award lawsuits as “Multicounty Litigation”, which would have placed every case before a single judge. We opposed it. On September 16, 2026, the Court denied the application, finding that the cases “lack uniformity with different actors, facts, and defenses.”
This helps providers in several ways. Cases stay on the fast track in their home counties. A single unfavorable ruling cannot decide every case at once. Each win becomes persuasive authority in the next courtroom, and carriers must defend every case on its own schedule. Or they could simply choose to pay the awards.
CMS: A New IDR Entity and a New Portal
CMS has certified a 17th IDR entity, Physio Solutions, LLC (DBA medlitix). It is not yet accepting disputes. CMS has also opened registration for the IDR Gateway, which will replace the current single-use web forms with a secure, centralized platform for managing disputes.
Organizations and individuals that process disputes, represent parties or submit web forms must sign up, while a party that relies on a third party to process its disputes does not need to register but must make sure that organization does. Only U.S.-based users are permitted, which matters for billing companies with offshore staff.
CMS plans to begin moving dispute initiation into the Gateway in November, and the web forms will no longer be available outside the Gateway after January 15, 2027.
The Political Angle
On September 15, 2026, the Senate HELP Committee held closed-door stakeholder roundtables on NSA reform with employers, physicians, insurers and unions. No specific changes were agreed to. There was reported common ground on screening out ineligible disputes and getting awards paid faster, and the participants also discussed tying awards more closely to the QPA and limiting IDR to emergency care.
One provider attendee described the session as “pointed but respectful.” From what I am hearing, the No Surprises Act Enforcement Act, which would add real penalties for late payment, has genuine support but is unlikely to pass cleanly.
Carriers are engaged in a propaganda campaign and are attempting to pair the passage of the Enforcement Act with changes to the underlying law such as tighter eligibility rules or limits on reimbursement.
Click here to get on our list to receive the most relevant updates for anyone involved in the NSA—court decisions, CMS changes, congressional action, and the like.
Questions about how these developments affect your practice? Contact James Greenspan at JGreenspan@GottliebandGreenspan.com.
This article is for general informational purposes and is not legal advice.
