Five years ago, President Trump delivered a historic victory for American patients when he signed the No Surprises Act (NSA) into law. The promise of this legislation was simple: Families would be protected from financial ruin caused by virtually unavoidable surprise medical bills.

For patients’ immediate bills, the law has been a resounding success. They are no longer subject to eye-popping surprise bills arriving in the mail.

But behind the scenes, one part of the NSA is being exploited and driving more costs to the system, as STAT’s Tara Bannow reported this week. The independent dispute resolution (IDR) process — originally intended as a limited, last resort mechanism — is failing to lower costs as promised. The Trump administration has a unique opportunity to put an end to the gaming by a few bad actors, so the NSA can work as intended.

Although employer and consumer groups advocated for a benchmark payment rate to resolve surprise billing disputes between providers and insurers, Congress ultimately sided with providers and legislated an arbitration mandate. An IDR system was established, intended for the rare situations when negotiations failed.

Instead, it has become a profit engine for a small subset of out-of-network provider groups, wasting vast amounts of money that should be going to patient care.

When passed, the NSA included the IDR process to resolve payment amount disagreements between out-of-network providers and insurers. Similar to baseball arbitration, the process requires both providers and health plans to make their best offer for what insurer should pay for the health care claim. A third-party IDR entity chosen by the federal government evaluates the information supporting both offers and selects one. The decision establishes the final payment amount and binds both parties. 


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Unfortunately, while the process seems simple enough on paper, the reality is anything but. Instead, the IDR system results in payments well above the market rate and is overused by a subset of out-of-network provider groups, wasting money that should go to patient care.

The scale of this abuse is staggering. In the first half of 2024, 610,000 cases were filed. The costs of those cases continue to rise as IDR-related expenses, including administrative fees and inflated payment awards, reached $5 billion between 2022 and 2024.

Most out-of-network providers are satisfied with the insurers payments; just a few parties initiate the vast majority of disputes. The top three provider groups initiated approximately 44% of all IDR cases in the first six months of 2024, and providers prevailed between 83% and 88% of the time. The payouts to providers were eye-popping, with insurers paying over four times the standard in‑network rate. These costs add up, flying in the face of congressional estimates that the NSA would reduce health care costs. Employers and patients are paying for those higher costs in their premiums.

Other providers are trying to jump in on this windfall, driving up the cost even more by filing ineligible claims. In 2024, nearly 40% of disputes submitted to IDR were identified as ineligible under the NSA because, among other reasons, the providers were in-network or the patients were insured by Medicaid or Medicare. Yet only 17% were ultimately declared ineligible by the arbitrators. The determination by IDREs to allow more than half of the ineligible cases to advance through arbitration left employers and health plans on the hook for costs that never should have been allowed in the first place.

There will always be bad actors who try to take advantage of new laws. But luckily the NSA included important data collection provisions that allow us to identify the abuse. The IDR process has become a mechanism for opportunistic provider companies to game the system. Like Monopoly, these providers always pass “Go” and always collect.

The system will continue to drive up costs for everyone if Congress and the regulators allow it to happen. Inflated awards work to keep providers out-of-network by knowing they’re very likely to hit the arbitration jackpot and win an overly generous award. And the arbitration companies that earn money every time a provider wants to challenge an out-of-network payment have no incentive to throw out an ineligible case. If the provider wins, they’ll come back with even more cases, perpetuating the expensive cycle of dispute-reward.

President Trump can put an end to the trickery that’s having a real-world impact on our wallets. And while patients aren’t seeing those surprise bills today, they will pay the costs of IDR tomorrow. Every inflated arbitration award leads to higher premiums, deductibles, and cost-sharing for workers and their families in future years.

Recently, Sens. Bill Cassidy (R-La.) and Maggie Hassan (D-N.H.) — key architects of the NSA — sent a letter supporting the Trump administration’s efforts to fix the implementation of the law. Stronger enforcement to get rid of ineligible claims, hold arbitrators accountable by making them explain why they are ignoring market rates, and penalize those gaming the system.


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A recent letter from more than 60 affected stakeholders in the employer, labor, and consumer advocacy communities called on regulators to clarify arbiter guidance, increase transparency to better evaluate the fairness of arbitrator decisions, and establish meaningful oversight and accountability for IDR entities.

The NSA protects patients, but the broken IDR process threatens both that protection and the cost savings the President Trump secured when he first signed it into law. Employers — and ultimately their workers — cannot pay the bills that the arbitrators are awarding. The Trump administration and Congress must protect the legacy of the NSA, ensuring the system works for patients, not those who abuse the IDR process.

James Gelfand is president and CEO of the ERISA Industry Committee (ERIC), where he oversees federal and state health and retirement benefit policies that impact ERIC member companies’ ability to operate under federal ERISA preemption. Patricia Kelmar is senior director, health care campaigns at PIRG, where she directs its health care campaign work and provides support to state offices for state-based health initiatives.