The No Surprises Act was designed to protect Americans from unexpected medical bills. Five years later, the patient may be better protected — but the system created to settle the remaining disputes is producing a different problem.
In some cases, arbitration awards appear far removed from the prices paid elsewhere in the market, turning a law built around patient protection into a high-stakes payment fight between insurers and providers.
Take a lumbar laminectomy. It is a routine spine procedure, used to treat herniated discs and arthritis, and across the U.S. insurers and providers have long settled on a median price of about $1,400. Not glamorous, not contentious, just one of those procedures the system has priced and moved on from.
Now look at what happens when an out-of-network surgeon takes the same operation into arbitration. The median award climbs to roughly $34,000 — twenty-four times the going rate. Some awards have cleared $100,000.
That gap is not a rounding error. It is the story.
The mechanism, and how it slipped
The No Surprises Act, passed in 2020, solved the problem everyone could understand: patients should not receive a five-figure bill from an out-of-network anesthesiologist they never selected and often never even met.
But removing the patient from the middle did not remove the conflict. It simply moved the dispute back where it belonged: between insurers and providers.
To resolve those disagreements, Congress created a “baseball-style” arbitration system known as Independent Dispute Resolution, or IDR.
In theory, those numbers should hover near the Qualifying Payment Amount, the benchmark tied to in-network rates. In practice, they do not. Providers are winning more than 80% of disputes, and they are often winning with numbers that bear little resemblance to what the same work costs inside a network.
The volume tells you the rest. Between mid-2022 and May 2025, more than 3.3 million disputes were filed. In the system’s first nine months alone, about 190,000 came in — over ten times what federal regulators had projected for a full year.
The infrastructure was built for a trickle. It got a flood.
This is not just a spine problem
The laminectomy is the headline, but it is not an outlier. Once providers figured out that arbitration could outperform contract negotiation, the practice spread to specialties where surprise bills used to be rare.
A neurosurgery group near Philadelphia turned down Highmark’s $2,660 offer for a diagnostic procedure measuring blood flow to the brain and walked away from arbitration with $333,000.
Gynecologists have collected fees up to 600 times the typical rate for inserting an IUD.
Imaging shows the same drift on a wider scale. Before the law, arbitrated imaging prices ran about 200% above Medicare rates. By 2024, they were 767% higher.
The arbitration tail is starting to wag the pricing dog.
And the players driving the volume are not, mostly, small independent practices wronged by aggressive insurers.
In 2023 and 2024, just two private equity-backed organizations — Radiology Partners and Team Health — accounted for 43% of all resolved line-item disputes. These are companies with the legal scale, the data, and the staff to file at industrial volume.
The IDR system was not designed for that. They are using it anyway.
Five billion dollars, and a clock that does not keep time
Someone is paying for all of this, and it is not the patient — at least not directly.
Georgetown researchers estimate the IDR system has generated roughly $5 billion in costs between 2022 and 2024: $2.24 billion in additional payments from plans to providers, $1.9 billion in internal costs absorbed by payers and providers, and $656 million in arbitrator fees.
That bill flows through premiums, and from there into the paycheck of every American with employer-sponsored insurance.
The process itself is also breaking down under its own weight. The law gives arbitrators 30 days to render a decision. In the last quarter of 2024, the median time to resolve a line-item dispute was 81 days.
Only 34% of single disputes — and 22% of batched ones — came in on time.
The Congressional Budget Office expected IDR outcomes to land near in-network rates, dragging prices down a little or at least holding them flat. That projection has not aged well.
Brookings researchers now see “little chance” the law will meaningfully lower prices or premiums, and call it a “realistic possibility” that the No Surprises Act will actually push in-network prices and premiums up.
A law sold partly on cost containment may end up doing the opposite.
What this means for everyone watching from outside the U.S.
For health systems, payers and regulators in other markets, the American experiment is worth studying precisely because the intent was so reasonable.
Protecting patients from balance billing is the kind of reform that polls in the high 90s. The design failure was elsewhere: a dispute mechanism that assumed good-faith use by a manageable number of providers, with no real ceiling, no real friction, and no real check on volume.
The lesson is uncomfortable but clear.
When you build a fast lane out of a contested pricing system, somebody will eventually figure out how to live in it.
If a reform does not anticipate the most sophisticated, well-resourced players gaming the rules at scale, it is not really a reform — it is an invitation.
The patient got off the hook. The system picked up the tab.
Source: statnews.com
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