No Surprises Act arbitration has been a bonanza for a few provider groups

In a span of 2.5 years through 2024, providers reaped more than $2.2 billion from the No Surprises Act’s arbitration process, relative to the applicable in-network payment rates for the disputed care episodes.

The awards received through the NSA’s independent dispute resolution (IDR) process largely arise from “disputes that are primarily initiated and won by private-equity-backed providers,” said Kennah Watts, research fellow at the Center on Health Insurance Reforms at Georgetown University.

Driven by that handful of groups, the volume of IDR disputes “continues to surpass agency estimates by millions,” Watts said during a webinar presented by Health Affairs.

Although the involvement of private equity (PE) frequently raises questions in healthcare, some smaller providers might struggle to effectively engage with the IDR process if not for that support, panelists noted during a discussion as part of the webinar.

Notable numbers

More than 3.3 million disputes were filed in the three years following the IDR portal’s launch in April 2022, Watts said.

In HHS’s initial projections, the department anticipated processing 22,000 disputes annually. Rather than relying on the portal so extensively, providers and insurers were expected to make better use of a mandatory 30-day negotiation period for settling out-of-network payment amounts in scenarios when the NSA prohibits balance-billing patients.

Across the two years for which CMS has made data available, providers initiated at least 85% of disputes and won 82% of cases. Five PE groups accounted for almost 60% of the filed disputes.

For 2024, the average amount awarded when providers won cases was nearly 450% of the qualifying payment amount (QPA), the benchmark used to reflect the median in-network payment rate for a service. One PE group averaged 770% of the QPA in its awarded amounts.

When health plans prevailed in the baseball-style arbitration, the average resulting payment rate was 110% of the QPA.

The IDR system has adopted to the large case backlog, Watts noted, closing 85% of all filed disputes as of May 2025. That’s up from 29% in year one.

Regarding the impact of the ongoing partial government shutdown, CMS sent notice Oct. 3 that the IDR process would remain in operation, with standard timelines applying.

“However, please note that a prolonged lapse in appropriation may cause delays in the review and processing of IDR complaints and response times to inquiries,” CMS wrote.

Going to court

Settled litigation has been one factor tilting the IDR statistics in favor of providers, Katie Keith, JD, associate research professor at the Center on Health Insurance Reforms and director of Georgetown’s Health Policy and the Law Initiative, said during the Health Affairs webinar.

Multiple lawsuits brought by providers, including several efforts led by the Texas Medical Association (TMA), have resulted in rulings mandating that arbitrators give weight to factors other than the QPA in rendering IDR decisions and requiring the government to vacate the original methodology for how insurers calculate QPAs.

The latter case was reviewed in September by the full Fifth Circuit Court of Appeals, with a decision pending. Until further notice, HHS says insurers technically should calculate QPAs using 2023 methodology that was issued after the lower court’s decision, but health plans will not face enforcement actions for now if they continue to use the original 2021 methodology.

The 2023 guidance is favored by providers because it’s more likely to produce a higher QPA.

Legal questions expand

More recently, Keith said, litigation has seen providers, especially air ambulance companies, “going to court to try the enforce the IDR awards that they want” by bringing suit against arbitrators or insurers. But decisions thus far at the appellate level have denied providers standing to sue arbitrators over such issues.

Meanwhile, insurers such as Elevance and Aetna have sued some of the provider groups that tend to be the busiest in the IDR portal. The insurers are focusing on the volume of seemingly ineligible claims that not only bog down the process but, according to the lawsuits, frequently receive a judgment even though arbitrators should dismiss such claims.

The insurers’ intent seems to be to trigger one of the narrow statutory scenarios in which a federal arbitrator’s ruling can be undone.

“They’re really alleging a broad scheme of widespread fraud,” Keith said. “It feels like a real escalation.”

Persistent concerns

One recurring complaint of providers is the difficulty of obtaining arbitrated payments. In 2024, a physician association reported that 24% of IDR payments awarded to members either were not paid within the required time frame of 30 business days or were not paid in full.

The current Congress has introduced bipartisan, bicameral legislation in which a key provision is steeper penalties for insurers that fail to issue a timely and accurate payment after an IDR decision. The outlook for moving the legislation in the short term is uncertain.

Providers also have alleged that insurance companies do not relay QPA information expeditiously, thereby stymieing providers’ ability to assess whether to take a case to IDR. However, Keith said courts have put the impetus on government agencies to decide that issue.

For providers, obstacles to a smooth IDR experience can be as basic as identifying the other party in the dispute.

“They might just have the name of the TPA [third-party administrator], and they don’t know if that’s a TPA that’s working with company A or company B,” Lindsay Murtagh, formerly a regulatory director with CMS’s Center for Consumer Information and Insurance Oversight, said during the webinar.

A 2023 proposed rule was drafted, in part, to enhance the flow of such disclosures between the parties prior to IDR. The proposals have not progressed toward being finalized under either the Biden or Trump administration, but they remain on the books for future consideration.