No Surprises Act dispute process drives $22.4 billion in added medical costs over four years

The No Surprises Act's arbitration process has generated $22.4 billion in added costs since 2022, driven by rising dispute volume, provider win rates near 85% and award amounts that far exceed in-network benchmarks. Cost pressures intensified significantly in 2025.

Rising dispute volume is driving costs higher

Researchers writing in Health Affairs Forefront in August estimated that the Independent Dispute Resolution (IDR) process established under the No Surprises Act (NSA) has generated $22.4 billion in additional medical costs over the last four years.

The researchers estimate that 76% of payments made to out-of-network providers under the NSA are accepted by providers, while 18% are negotiated at amounts somewhat higher than the qualified payment amount (QPA). Providers file for IDR arbitration for approximately 6% of services. The volume of IDR disputes continues to rise; there were 2.6 million disputes submitted to IDR in 2025. More than three-quarters of these disputes were filed by RadPartners, the largest radiology group in the country (30%); HaloMD, a third-party organization that files disputes on behalf of providers (27%); and TeamHealth, a multispecialty provider group (20%).

Provider success rates remain high

Arbitrators found in favor of providers in about 85% of IDR arbitrations. The median payment was 445% of the QPA, although the top 10% of judgments paid providers more than 17 times the QPA, reflecting a heavily skewed distribution of outlier awards.

Regulatory and legal developments may increase pressure

A recent Fifth Circuit Court of Appeals decision could push costs even higher: the court struck down the Department of Health and Human Services’ methodology for calculating the QPA, ruling that insurers may no longer include unused ghost rates in the calculation and must factor in provider bonus/incentive payments. This could increase award amounts, although it may also reduce the number of cases that proceed to arbitration.

Newly finalized regulations in June reduced the IDR administrative fee from $115 to $15 per party per dispute. The Departments project a 30% increase in the total number of administrative fees paid going forward to account for increased utilization.

Some health plans have also found the IDR process profitable by charging employer plans a shared savings fee for reducing provider charges to the QPA.

What employers should do now

• Review carrier contracts to understand all IDR-related fees and financial arrangements, recognizing that exposure can vary materially by carrier, provider mix, geography, contract provisions and dispute volume
• Ask for reporting on IDR disputes, initial and final payments, fees, outcomes and concentrations by specialty, market or provider organization
• Audit shared savings arrangements to ensure that they reflect final arbitration outcomes
• Review how carriers and TPAs decide whether to settle, negotiate or proceed to arbitration and incorporate appropriate transparency, reporting and governance provisions into renewal and contracting discussions
• Negotiate caps on shared savings payments, especially when they do not reflect active negotiation or value added by the carrier

The NSA has largely succeeded in removing patients from disputes over charges between out-of-network providers and carriers. However, legislative and regulatory fixes are likely necessary to be sure that they rein in both the administrative and claims costs of these arbitrations.

Certain state IDR frameworks may offer more favorable outcomes than the federal process in specific situations. Applicability to self-funded plans, state-specific requirements, carrier operational capabilities, ERISA considerations and scalability should be evaluated case by case rather than treated as a broadly applicable recommendation.

IDR exposure is becoming a material employer risk

The IDR process has protected patients from surprise bills, but its growing volume, high provider win rates and outsized awards are adding significant and rapidly increasing costs to employer-sponsored health plans. Treat IDR exposure as a material financial and governance issue by seeking greater transparency from carriers and TPAs, scrutinizing fees and incentives and strengthening reporting, audit and contracting provisions. Legislative and regulatory action will also be important to preserve patient protections while helping contain unnecessary claims and administrative costs.