The Ohio Court of Appeals recently ruled against Phi Health, LLC, in its attempt to enforce independent dispute resolution (IDR) awards against Custom Design Benefits, LLC, and Bob Sumeral Tire Company, LLC. The court's decision, filed on July 8, 2026, clarifies the limitations of the No Surprises Act and the enforcement of IDR awards. This ruling is significant for healthcare providers and insurers navigating out-of-network billing disputes.
In this case, Phi Health, an air ambulance service, sought to collect payments for services rendered to a patient covered by an insurance policy administered by Custom Design. After an IDR process determined the payment amounts owed to Phi Health, the company filed a lawsuit when the payments were not made. The court found that Phi Health lacked the legal standing to enforce the IDR awards under the No Surprises Act, the Federal Arbitration Act, and Ohio's Arbitration Act.
The dispute began when Phi Health transported a patient in 2013 and billed Custom Design for the services. After the IDR process ruled in favor of Phi Health, the company attempted to confirm the arbitration award in court. However, Custom Design and Bob Sumeral filed a motion to dismiss the case, arguing that Phi Health had no right to enforce the IDR awards.
The trial court agreed with Custom Design and dismissed the complaint, leading Phi Health to appeal the decision. The Ohio Court of Appeals reviewed the case and upheld the trial court's ruling, stating that the No Surprises Act does not grant a private right of action to enforce IDR awards. The court noted that the act aims to protect patients from excessive medical bills rather than providing a mechanism for providers to sue for payment.
Judge Bock, writing for the court, stated, "We hold that the No Surprises Act does not authorize private lawsuits to enforce IDR awards." The court emphasized that the IDR awards are binding but not enforceable through private litigation, as the act does not create an implied right of action.
The ruling has far-reaching implications for healthcare providers like Phi Health, who may find themselves unable to collect fees through litigation after IDR determinations. The court's decision also reinforces the need for providers to understand the limitations of the No Surprises Act and the available enforcement mechanisms.
This case highlights the ongoing challenges faced by out-of-network providers in collecting payments from insurers. The ruling may deter similar lawsuits from providers seeking to enforce IDR awards, as it clarifies that such awards are not subject to judicial enforcement.
Looking ahead, this ruling may set a precedent for future cases involving the No Surprises Act and IDR awards. Providers and insurers will need to navigate the complexities of the law carefully, as the court's decision underscores the importance of understanding the statutory framework governing out-of-network billing disputes.
While Phi Health's options for appeal are limited, the case may prompt further legal challenges as other providers seek clarity on their rights under the No Surprises Act. As the legal landscape evolves, stakeholders in the healthcare industry will need to stay informed about potential changes and developments in this area of law.