The No Surprises Act (NSA) accomplished something meaningful: It largely provides substantial protections to patients from certain surprise medical bills by capping their liability for out-of-network care at in-network cost-sharing.
But removing the patient from the payment dispute did not eliminate the disputed amount; it merely transferred the burden of resolving it to health plans and providers involved through the independent dispute resolution (IDR) process. Now, new data shows that IDR has increased claim payments and administrative expenses in excess of $22 billion, costs that will ultimately fall on the people the law protects through increased employee contributions, higher point-of-purchase cost sharing (e.g., deductibles, copays, coinsurance), or reductions in other benefits or wages.
A Backstop Has Become a Reimbursement Channel
IDR was created as a method to determine payment where there was a disagreement left after unsuccessful open negotiation. IDR usage has far exceeded expectations. According to a recent congressional report, over 4.7 million IDR requests were filed between 2023 and 2025. Providers submitted almost 100% of the IDR filings and won approximately 86% of the arbitrations.
These numbers indicate that IDR is no longer an infrequent safeguard. Instead, IDR has become a regular and routine method of determining out-of-network reimbursement, used almost exclusively by one side of the transaction.
While earlier delays exacerbated dispute, the processing times have improved significantly since mid-year. As of year-end 2025, more than 92% of all IDR cases filed since the inception of the program had been resolved. Additionally, the median time for an IDR determination decreased to 25 days in the fourth quarter. Therefore, while earlier concerns focused primarily on backlogs, the current focus is now on how the IDR process increases spending, and in turn, the cost of coverage.
The $22.4 Billion Estimate Has Three Parts
A recent study using federal public-use data estimated that IDR resulted in approximately $22.4 billion in costs from 2022-2025, inclusive of air ambulance disputes. The largest portion was $15.6 billion, representing payment determinations that exceeded the qualifying payment amount (QPA), which is typically a plan or issuer's average contractual rate for similar services within the same geographic area. The estimate also included $4.2 billion in internal administrative costs incurred by disputing parties and $2.7 billion in federal administrative costs and fees related to IDR.
Context is necessary to understand this number. It is a research estimate based on review of publicly available data, largely focusing on the QPA as the in-network benchmark. Providers may argue that such measures do not accurately reflect market-based rates and that different benchmarks would yield different calculations. However, a different benchmark calculation would not erase the documented volume of disputes, associated fees, and significant administrative efforts involved with the millions of IDR cases.
Self-Funding Creates Direct Employer Exposure
For a self-funded employer, an arbitration award creates a direct plan expense rather than a cost initially absorbed by an insurer. The employer bears the claim risk even when employee contributions help finance coverage.
Therefore, higher claim payments resulting from IDR awards increase plan expenditures, and the dispute resolution fees create a further expense. The extent to which a self-funded employer is protected from these risks via stop-loss coverage depends upon the policy terms, attachment points, and treatment of additional amounts awarded through IDR.
In contrast, employers that elect to fully insure their group health plans face less direct exposure. Typically, insurers consider claims experience and administrative expense when setting future premiums.
Although the full effect of IDR has not been measured, early evidence suggests that the arbitration awards and related fees are already increasing the cost of coverage, whether insured or self-insured. One public employee plan credited over $200 million in excess claim payments to IDR and identified them as a primary contributor to nearly a 10% premium increase in 2025. Separately, a union plan stated they added 1.75 percentage points to premiums to offset IDR awards and fees.
Although consumer cost sharing is rarely responsible for covering arbitration awards for protected services, longer-term effects may arise through various mechanisms such as higher employee contributions, greater point-of-purchase cost-sharing requirements, narrower networks, or reductions in future wage increases or reduced spending on other benefits.
Arbitration May Influence Network Prices
Another, "silent" issue is whether the IDR process may ultimately influence negotiated contract prices among in-network providers. A recent federal budget analysis explained that if out-of-network payment levels continue to be excessively high, it may prompt in-network providers to either opt out of network contracts or demand higher rates when renewing their network agreements. One study by the Government Accountability Office showed that the percentage of in-network professional (physician) claims for emergency medicine declined from 96% in 2019 to 94% in 2023.
Since in-network claims constitute the majority of healthcare expenditures, even a modest change to contracted prices may result in a significant increase in the cost of coverage.
Existing evidence of how arbitration affects network pricing remains mixed, in part because claims data hasn't been able to keep pace with the rapid growth of IDR. Due to the delays between arbitration activity and corresponding claims data, assigning a specific premium effect is premature. Even so, it would be shortsighted to assume that the millions of IDR disputes with awards frequently exceeding the QPA, will have no implications for future contract negotiations.
Cost Containment Must Continue Through Resolution
Reduced initial claim payments do not equate to actual savings if the claim remains subject to negotiation or arbitration. Therefore, to determine its true cost, plans must track final payments, dispute resolution fees, and administrative resources devoted.
That means consistent eligibility review, supportable payment rationale, and outcome analysis per service category, geographic region, and filing pattern. Claims, financial, and legal teams must be able to coordinate when a routine payment escalates into a significant dispute. When improper billing or collection activity reaches a plan member, informed advocacy remains essential to preserve the protections intended by the law.
The goal is to ensure that the mechanism operating behind the prohibition against surprise billing applies consistent eligibility standards, produces transparent determinations, and remains financially sustainable.
The next measure of the law's success will likely include whether it can affordably protect patients without allowing the processes used to resolve payment disagreements to make coverage less affordable for everyone.
