By Jack Hoadley and Kennah Watts
Passage of the No Surprises Act (NSA) in 2020 mirrored a consensus amongst stakeholders that customers must be shielded from sure shock medical payments. The regulation focused eventualities the place customers acquired emergency providers in an in-network or out-of-network (OON) facility, and a few providers, comparable to radiology or anesthesiology, from OON suppliers at in-network amenities. In these eventualities, the NSA prohibits suppliers stability billing sufferers for quantities exceeding what the affected person’s insurer paid, and limits customers’ prices to in-network quantities, even from OON suppliers. Analysis exhibits that the NSA eradicated most stability payments and introduced down customers’ cost-sharing funds.
As a result of the NSA required suppliers in these eventualities to just accept the payer’s charge as fee in full, it was additionally obligatory to make sure the fee was acceptable. Nevertheless, there was no consensus on figuring out how a lot the OON supplier ought to be paid within the occasion of a disagreement between payer and supplier. Some state legal guidelines and early committee variations of the federal regulation used a fee method, typically primarily based on the insurer’s normal in-network price. Going through supplier opposition, some states turned to an unbiased dispute decision (IDR) method (New York was one of many first in 2014). Key options included baseball-style arbitration––the place the arbiter selects both the supplier’s or the insurer’s quantity with no different possibility––and a “loser pays” method for IDR charges. The federal NSA in the end took this method.
We are actually within the fourth yr of federal IDR operations. Public use recordsdata (PUFs) with full information on IDR outcomes, together with supplemental tables, have been launched for 2023 and 2024. Restricted information have been additionally launched for 2022. Up to now, suppliers have introduced much more disputes into IDR than anticipated and have received the overwhelming majority. When suppliers win, they sometimes obtain charges which might be three to 4 occasions the everyday in-network price, as mirrored by the qualifying fee quantity (QPA). We have now beforehand highlighted traits for 2023 and the first half of 2024. Along with pattern updates, this text estimates complete prices incurred by the IDR system since its initiation, and explains how IDR traits––excessive quantity, excessive supplier participation, and excessive provide quantities––have led to billions in prices.
The IDR Course of Has Incurred $5 Billion In Whole Prices
The excessive quantity of IDR disputes is producing important spending from administrative prices and better funds for providers. This greater spending will doubtless be mirrored in greater general well being prices and shopper premiums sooner or later. By estimating administrative and fee prices, and we discover the IDR course of has generated no less than $5 billion in complete prices by the top of 2024 (Exhibit 1).
Exhibit 1. Whole Estimated Prices* of the IDR System, 2022 to 2024
Supply: Authors’ evaluation of Federal IDR Supplemental Tables and Public Use Information (2023-2024)
* Consists of prices of air ambulance disputes.
Administrative Prices
IDR administrative prices embrace two charges to the events for every dispute: an administrative charge and an IDR entity charge. The executive charge, initially set by CMS steerage at $50, was raised in 2024 to $115. Supplemental desk information reveal that for the reason that begin of the IDR course of, the system has collected $218 million in administrative charges (plus $10 million for air ambulance disputes) (Exhibit 1). These charges go to the federal businesses to help system administration.
IDR entities – unbiased organizations that arbitrate disputes – set charges inside CMS’s predetermined higher and decrease fee vary: $200 to $840 for single disputes and $268 to $1,173 for batched disputes. In 2023 and 2024, the events paid $636 million in IDR entity charges (plus $20 million for air ambulance disputes) (Exhibit 1). The dropping celebration pays the IDR entity, and the charge covers the entity’s prices. Mixed, a complete of $885 million (together with air ambulance disputes) in charges has been collected to finance the system (Exhibit 1).
Past charges, plans and suppliers incur prices to handle IDR disputes. Within the impression evaluation within the authentic IDR interim last rule, the federal businesses estimated plans’ and suppliers’ inside prices to submit numerous IDR supplies can be $857 per dispute. Multiplying that by the entire disputes over 2 years yields $1.9 billion in inside administrative prices. Mixed with the required charges, this yields a complete of $2.8 billion. This sum doesn’t absolutely account for administrative prices that stakeholders incur for managing their IDR participation, nor prices incurred by or paid to third-party middlemen organizations that help in submitting or responding to disputes.
Prices From Fee Determinations
Along with administrative prices, IDR typically leads to fee determinations that exceed the unique funds to suppliers. Stakeholders could disagree on whether or not greater funds are honest, however these quantities replicate funds past these incurred if in-network charges have been sustained.
Fee-related prices will not be solely attributable to the IDR course of, as some portion of those prices existed previous to the NSA, however have been paid by customers. Nevertheless, provided that stability billing protections are in place, these IDR-specific fee awards and added prices may not be incurred with completely different IDR guidelines, outcomes, or means to find out acceptable fee.
To estimate complete further funds, we in contrast the QPA (a proxy for the preliminary plan fee and in-network charges) with the prevailing provide (the fee willpower by the IDR entity). Due to lacking information within the PUFs, we estimated the extra fee quantity by assuming that the common quantity for instances with lacking or suppressed information (about one-fifth of all instances) is similar as instances with full information.
For 2023 and 2024, we estimated further funds of $2.24 billion (Exhibit 1). In practically all instances, this represents further funds made by plans to suppliers. We assumed that presently unpaid resolved instances can be paid.
Combining required charge funds, administrative prices, and extra funds for providers, the IDR course of has generated no less than $5 billion—about $2 to $2.5 billion yearly—in complete prices by the top of 2024 (Exhibit 1). Over the past two years, these prices have been pushed by a excessive quantity of disputes and excessive supplier use of IDR––primarily by personal fairness backed teams––which we broaden on under.
The Quantity Of IDR Disputes Continues To Surpass Company Estimates
Within the laws establishing the IDR system, the federal businesses estimated that the IDR course of would yearly resolve 17,333 disputes, with an extra 4,899 disputes from air ambulance suppliers. This estimate mirrored expectations that the majority disputes can be resolved amicably by a compulsory 30-day negotiation interval earlier than IDR.
The fact is way completely different: From mid-2022 to Might 2025, 3,324,051 disputes have been filed (together with air ambulance disputes) (Exhibit 2). Within the 9 months after the system opened in 2022, about 190,000 disputes have been filed—greater than ten occasions the quantity anticipated for the primary full yr alone. Air ambulance firms filed about 10,000 disputes on this interval—double the unique estimate. (Whereas the businesses haven’t launched 2025 PUFs, CMS launched bi-monthly reviews on dispute quantity. We embrace these information in Exhibit 2.)
Exhibit 2. Whole Quantity* of IDR Disputes (by thousands and thousands), April 2022 to Might 2025
Supply: Creator’s evaluation of Federal IDR Supplemental Information (2022-2024) and Bi-Month-to-month Report (2025)
* Consists of air ambulance disputes
Over that very same interval, 2,831,804 disputes have been closed—together with these deemed ineligible and people closed for different causes (e.g., withdrawn, settled by the events, information entry errors) (consists of air ambulance) (Exhibit 2). As of Might 2025, 85 p.c of all disputes filed to this point had been closed. The closure price has elevated quickly from 29 p.c on the finish of 2022 and 41 p.c on the finish of 2023. However as of Might 2025, a backlog of practically 500,000 disputes remained.
Of the closed disputes, 2,152,045 fee determinations have been issued by IDR entities (consists of air ambulance) (Exhibit 2). This rely underestimates the entire variety of line-item claims which have acquired an IDR choice as a result of many claims have been filed in batch. In This autumn 2024, 30 p.c of emergency and non-emergency disputes have been filed as batched instances. From 2023-2024, the common batched dispute included 5 related line-item claims (median of three). However some batched disputes are a lot bigger; the biggest dispute included 453 particular person line-item claims. In complete, 2,505,764 separate line-item claims had fee determinations in 2023-2024.
Determinations Take Three Occasions Longer Than The Statutory Deadline
The amount of IDR disputes has made it practically unimaginable for IDR entities to fulfill the 30-day statutory deadline for fee determinations. Within the final quarter of 2024, the median days to willpower for line-item claims was 81 days, down from a earlier peak of 96 days. In This autumn 2024, about 34 p.c of single disputes and 22 p.c of batched disputes had a fee willpower throughout the required 30 days. Common days to willpower additionally fluctuate considerably amongst IDR entities. Though quantity is probably going the principle motive for delays, delays have been exacerbated by pauses when hostile court docket choices pressured the businesses to assessment procedures.
Disputes Stay Dominated By A Few Supplier Organizations
Our evaluation of the PUFs––information recordsdata launched by the federal businesses that embrace data on resolved IDR disputes–– reveals that in 2023 and 2024, 43 p.c of resolved line-item claims have been filed by two personal equity-backed supplier organizations: Radiology Companions and associates (28 p.c) and Workforce Well being (15 p.c). The highest 5 supplier organizations have been chargeable for 59 p.c of line-item claims. Alongside the continued dominance of those supplier teams, middlemen organizations have grown in significance. In 2023, HaloMD accounted for 1 p.c of line-item claims, and by the top of 2024, HaloMD was the fourth most lively participant, with 6 p.c of line-item claims.
Suppliers Proceed To Prevail With Rising Supply Quantities
Suppliers have received the overwhelming majority of disputes. In 2024, suppliers received 85 p.c of the line-item claims determined that yr, up from 81 p.c in 2023 (Exhibit 3).
Exhibit 3. Share of IDR Disputes Received by Suppliers by Quarter, 2023 to 2024
Supply: Authors’ evaluation of Federal IDR Public Use Information (2023-2024)
Moreover, suppliers have received substantial provide quantities. In This autumn 2024, for line-items the place the supplier prevailed, the median fee willpower was 459 p.c of QPA. Meaning the supplier requested, and received, a fee that was over 4 occasions the in-network quantity.
The median fee willpower quantity has elevated over time. The median quantities in 2023 and 2024, for line-item disputes received by suppliers, have been 327 p.c and 445 p.c of the QPA, respectively (Exhibit 4). Typically, the profitable quantities are even greater. For instance, in disputes filed by HaloMD, the median quantity was 934 p.c of the QPA.
Exhibit 4. IDR Course of Median Prevailing Supply Quantity as P.c of QPA, 2023 to 2024
Supply: Authors’ evaluation of Federal IDR Public Use Information (2023-2024)
Prevailing quantities are considerably decrease when the IDR entity selects the plan’s provide. When plans win, the median prevailing provide was 110 p.c of the QPA in 2024, up from 100% of the QPA in 2023 (Exhibit 4). Plans have elevated their provides modestly within the disputes they win, however they proceed to request funds near in-network charges.
Geographic Distribution Is Skewed By Dominant Supplier Organizations
From 2023-2024, 63 p.c of all of the determined line-item claims got here from simply 4 states: Arizona, Florida, Tennessee, and Texas. Over one-third of all claims (37 p.c) got here from Texas alone. These 4 states signify simply 17 p.c of the U.S. inhabitants. In contrast, giant inhabitants states—California, Illinois, and Pennsylvania—every represented simply 1 p.c of all line-items.
This geographic skew seems pushed by quantity from the highest supplier organizations. From Q1 2023 to Q2 2024, roughly half of line-items in Texas and Arizona got here from Radiology Companions suppliers. Equally, Workforce Well being accounted for greater than a 3rd of Florida’s complete line-item claims.
Excessive Prices Elevate Coverage Challenges And Questions
The IDR system has added no less than $5 billion to general well being system prices since its inception––roughly $2 to $2.5 billion per yr. If further stakeholder administrative prices may very well be measured and included, prices are doubtless far more. And as dispute quantity grows, so will prices. Presently, price development impacts IDR-specific claims, however over time, future community contract negotiations might replicate the upper quantities awarded by IDR. The unique price projections by the Congressional Price range Workplace assumed that awards can be extra modest and create downward strain on negotiations. IDR outcomes to this point could also be reversing that expectation. Nonetheless, the longer term relies on whether or not excessive awarded charges are sufficiently widespread to affect negotiations.
These traits immediate the query of whether or not steps must be taken to scale back IDR use and the dimensions of the awards and what coverage levers can be found.
One part of the excessive dispute quantity is the prevalence of ineligible disputes, constituting about 20 p.c of all closed disputes. As a result of IDR entities obtain no charge for disputes deemed ineligible, some exterior technique of assessing eligibility could also be wanted. The federal businesses have instructed some modifications by a pending proposed rule. Adjustments to the IDR portal might assist display screen out ineligible instances, however the federal businesses might have a separate course of to handle eligibility.
As famous, Congress anticipated {that a} extra important quantity of instances can be settled exterior the IDR course of by casual negotiations. Whereas the speed of such settlements can’t be measured below the present system, the proposed rule might enable nearer monitoring of open negotiations.
For instances that obtain a fee willpower from IDR entities, the excessive supplier win price and the magnitude of the prevailing charges proceed to defy expectations. Extra transparency and consistency amongst IDR entities would possibly assist observers higher perceive the outcomes. Moreover, the federal businesses might present impartial information on fee quantities to the IDR entities to supply a method of anchoring fee determinations to market information.
The function of personal fairness within the course of deserves larger scrutiny. As famous above, many disputes are initiated by supplier organizations and intermediary organizations with private-equity backing. Their aggressive techniques have been challenged in current court docket instances by insurers. Plans can also want to supply stronger responses to provider-initiated disputes.
The NSA efficiently protects customers from greater out-of-pocket prices related to shock payments and OON price sharing. However with out motion to rethink the IDR course of, the excessive prices will add to general well being system prices and can in the end by paid by customers.
Jack Hoadley and Kennah Watts “The Substantial Prices Of The No Surprises Act Arbitration Course of” August 25, 2025, https://www.healthaffairs.org/content material/forefront/substantial-costs-no-surprises-act-arbitration-process. Copyright © 2025 Well being Affairs by Venture HOPE – The Folks-to-Folks Well being Basis, Inc.