On June 20, 2025, the United States District Court for the Southern District of New York issued an Opinion and Order finding, among other things, that the Federal No Surprises Act (NSA) does not automatically prevent health care providers from suing insurance companies when the insurer fails to pay for their services.
The lawsuit was brought in New York State Supreme Court by emergency physician William A. Kennedy III, M.D. and his practice against various insurers affiliated with UnitedHealthcare (United), with which they are out-of-network. Dr. Kennedy alleges that United wrongly placed a “flag” on him and his practice, causing the denial of all of his claims for the care he rendered to United’s members. In his Complaint, Dr. Kennedy, who is on-call with various New York hospitals, contends that he was required by federal and state law to provide emergency medical treatment to his patients and that United was unjustly enriched when it refused to pay him for those services.
United removed the case to federal court, and Dr. Kennedy asked the judge to return the case to state court. In opposition, United argued that the NSA effectively cut off all lawsuits by out-of-network providers against insurance companies for claims for services rendered after January 1, 2022, because it created an “exclusive remedy” for them to seek health plan benefits. Federal District Court Judge Paul Engelmayer rejected United’s argument, and agreed with Dr. Kennedy, that while the No Surprises Act “prevents emergency service providers from holding a patient liable for the balance of a bill,” United had “not identified any legal authority” demonstrating that “the NSA bars medical providers from bringing state-law claims against the patient’s insurer.” Judge Engelmayer granted Dr. Kennedy’s motion and returned the case to state court.
The case is Kennedy v. UnitedHealth Group, Inc., No. 25 Civ. 432, 2025 WL 1725147 (S.D.N.Y. June 20, 2025). The Plaintiffs, including Dr. Kennedy and his practice, are represented by Garfunkel Wild.
The NSA has placed significant burdens on out-of-network health care providers and is still the subject of a great deal of uncertainty resulting, in part, from numerous ongoing court challenges.
Should you have any questions regarding the above, or would like guidance on addressing the challenges out-of-network providers face, please contact the authors, the Garfunkel Wild attorney with whom you regularly work, or contact us at [email protected].
