The Trump administration wants the Supreme Court to decide whether a single lawsuit can wipe a federal rule off the books for the entire country, or only for the people who actually sued. The fight centers on a surprise-billing dispute brought by Texas medical providers, but the administration says the stakes reach into nearly every corner of federal policy, from immigration to health care to voting rules.
On October 14, the administration asked the justices to take up the case, formally called Department of Health and Human Services v. Texas Medical Association, according to Georgetown's O'Neill Institute. The petition, docketed as No. 26-491, was filed the same day, per Bloomberg Law. As Reuters reports, the administration is not challenging the merits of the underlying court decision — it is challenging how far that decision's remedy should stretch.
A Surprise-Billing Rule Becomes a Test Case
The case traces back to a law Donald Trump signed during his first term limiting unexpected medical bills from out-of-network hospitals and providers, according to Reuters. Federal rules implementing that law set out how to calculate the qualifying payment amount, or QPA, used in surprise-billing disputes — rules Texas medical providers argued violated the Administrative Procedure Act and artificially lowered reimbursement rates, per Reuters.
In August, the Fifth Circuit Court of Appeals, sitting en banc, sided with the providers and voided parts of the regulation nationwide. The court's August 11 opinion found that the rule's treatment of so-called ghost rates was contrary to law, and that bonus and incentive payments must be included in QPA calculations, according to the Fifth Circuit's opinion. The dispute centers on a 2021 rule establishing that QPA methodology, the O'Neill Institute notes.
Reuters reports that the administration is not disputing that part of the ruling. What it is contesting is the Fifth Circuit's decision to void the rule for everyone, rather than just for the Texas providers who brought the case.
What the Administration Is Arguing
In its Supreme Court filing, the Justice Department argued the court should return lower courts to their proper role under the Administrative Procedure Act, according to Reuters. The administration contends relief under the law should be limited to the plaintiffs in each case rather than applied universally, the same report states.
The Administrative Procedure Act, enacted in 1946, sets procedural and substantive standards for federal rulemaking, per the O'Neill Institute. Legal scholars say the stakes of how broadly it can be wielded are significant. Aditya Bamzai, a University of Virginia expert in administrative law, said a ruling for the administration could let the government keep enforcing a rule broadly against everyone except the plaintiffs during litigation, potentially for years, according to Reuters. Bamzai also said such a ruling would give the executive branch more flexibility, Reuters reports.
Not everyone in the legal academy sees it the same way. Ronald Levin, a law professor at Washington University in St. Louis, said that when an agency rule is found unlawful, wiping it off the books can be the only sensible solution, according to Reuters. Levin also said some cases compellingly require judges to have the tool to invalidate rules universally, and warned that a decision favoring the administration would delay the removal of unlawful regulations, Reuters reports.
States and Past Administrations Have Fought Over This Before
Texas, Florida and other states have urged the Fifth Circuit not to weaken the Administrative Procedure Act's effectiveness, arguing the law is a critical tool to curb federal overreach and protect state sovereignty, according to Reuters. That argument has shifted depending on who controls the White House. The government challenged universal vacatur in a 2023 case that the Supreme Court resolved on standing grounds; separately, the Biden Justice Department asked the Court in 2024 to restrict nationwide injunctions.
The current fight builds on last year's ruling in Trump v. CASA, in which the Supreme Court restricted federal judges' ability to block Trump administration actions nationwide through universal injunctions. But the justices were careful to leave the APA question open. As the ruling put it, according to Stanford Law School, “Nothing we say today resolves the distinct question whether the Administrative Procedure Act authorizes federal courts to vacate federal agency action.” That gap is exactly what the new petition asks the Supreme Court to fill.
Why the Administration Cares Beyond Health Care
The administration's interest extends well past surprise medical bills. It has said a ruling in its favor could have ramifications for lawsuits over federal rules governing the Affordable Care Act, Medicare and Medicaid, according to Bloomberg Law. Since returning to office in January 2025, the Trump administration has faced hundreds of lawsuits challenging its policies, Reuters reports, including suits over immigration restrictions, mass deportation, the end of diversity initiatives, transgender rights and other measures.
Plaintiffs have used the Administrative Procedure Act to challenge the termination of humanitarian status for hundreds of thousands of migrants, cuts to research grants tied to racial minorities or LGBT people, and a mass voter verification system for citizenship checks, according to Reuters. A narrower reading of APA remedies would make it harder for a single successful lawsuit to block any of those policies on a nationwide basis.
The administration's push for narrower judicial remedies follows a separate, high-profile Supreme Court ruling last year, when the justices ruled 6-3 in Trump v. CASA to restrict federal judges' ability to block Trump administration actions nationwide through universal injunctions, according to Reuters. Reuters reports the Supreme Court is expected to consider whether to take up the new case early in 2027.
