Since its passage in 2020, the No Surprises Act has been a win for patients, protecting them from unexpected out-of-network medical bills. However, a growing body of evidence suggests that the law’s independent dispute resolution (IDR) process—the mechanism meant to settle payment disagreements between providers and insurers—is generating billions of dollars in additional costs that may eventually trickle down to consumers.
The Cost of Dispute Resolution
According to a recent Health Affairs analysis, the IDR process created an estimated $5 billion in costs between 2022 and 2024. Instead of streamlining billing conflicts, the system has been overwhelmed by disputes—far exceeding federal expectations. Regulators initially projected 17,000 annual cases, but nearly 190,000 disputes were filed in the first nine months alone.
By May 2025, the backlog had swelled to almost half a million disputes, with providers filing the majority of cases. Notably, private equity-backed groups such as Radiology Partners and Team Health account for nearly 60% of resolved claims.
Why It Matters for Consumers
While the No Surprises Act has succeeded in shielding patients from direct billing shocks, the hidden costs of the dispute resolution process are significant:
- Higher administrative fees
- Increased provider payments through arbitration awards
- Potential ripple effects on insurance premiums
In fact, in late 2024, provider wins in arbitration led to awards more than four times higher than standard in-network payment amounts. Insurers argue this trend inflates costs and undermines the intent of the law, while providers maintain that insurers’ offers are unreasonably low.
What’s Next?
Researchers caution that unless policymakers take action, rising IDR costs could drive up premiums for consumers. Suggested solutions include:
- Filtering out ineligible disputes through the IDR portal
- Increasing transparency in negotiations before arbitration
- Placing stricter oversight on high-volume provider groups, especially those backed by private equity
Already, insurers are filing lawsuits alleging abuse of the IDR system, while providers continue to push for arbitration rules that favor higher payments. With both sides at odds, the challenge for regulators is finding a balance that keeps patients protected without allowing dispute resolution costs to spiral.
The No Surprises Act remains a crucial safeguard for patients, but its arbitration system is proving more costly than anticipated. Without reforms, these growing expenses may eventually land back on consumers in the form of higher health insurance premiums.
At No Surprise Bill, we specialize in guiding providers and payers through the complexities of the Independent Dispute Resolution (IDR) process under the No Surprises Act. With disputes rising nationwide, having an experienced partner can save time, reduce costly errors, and ensure compliance. Our dedicated team helps you navigate negotiations, streamline filings, and resolve claims efficiently. Visit us to learn how we can support your organization.