“A law meant to end surprise medical billing has led to large paydays for some surgical assistants, who can earn far more than the doctors they help,” The New York Times finds in a report titled “$22,000 Per Hour: Assistants Use a Legislative Loophole to Outearn Surgeon.“
America’s Health Insurance Plans (AHIP) is saying “Outrageous provider-driven abuse of the No Surprises Act is adding billions in wasteful spending and raising healthcare costs for everyone. Policy action is needed to address flawed incentives in the IDR process and protect consumers from unconscionable price gouging by out-of-network providers and IDR middlemen,” said Chris Bond, AHIP spokesperson.
The federal No Surprises Act was signed into law on December 27, 2020, to protect patients from surprise billing – unexpected charges from doctors, hospitals, or other health care providers who are not part of a patient’s health plan’s network. The law limits the amount that patients are required to pay in those situations and creates an independent dispute resolution (IDR) process for resolving disputes between commercial insurers and health care providers about payments for such out-of-network care.
In January 2021, the Congressional Budget Office estimated that the law would reduce the in- and out-of-network prices that insurers pay to providers who had high rates of surprise billing before the law was enacted. CBO expected that those lower prices would, in turn, reduce the premiums that insurers charge for commercial plans by roughly 1 percent, thus decreasing federal deficits by $17 billion from 2021 to 2030 (CBO 2021). Contemporaneous analyses supported those projections, although experts noted at the time that outcomes would vary depending on how the law was implemented (Duffy et al. 2020; Adler et al. 2021; Chhabra, Brown, and Ryan 2021; Fiedler, Adler, and Ippolito 2021).
According to a new post on the CBO website by Jessica Hale, Tamara Hayford and Daria Pelech this month, emerging evidence suggests that the law might not have the effects that CBO anticipated. Although prices for some services that had high rates of surprise billing before the law’s enactment have declined (after adjusting them for inflation), several published reports indicate that providers are winning more than 8 in 10 independent dispute resolution (IDR) cases and are being awarded payments that are much higher than expected, particularly in certain geographic areas.
Evidence based on outcomes from arbitration suggests that the law could cause premiums to increase if outcomes from arbitration enhance providers’ ability to secure higher prices by credibly threatening to stay out of network. The number of IDR cases has far exceeded projections, and awarded payments are often much higher than anticipated. Amounts from arbitration settlements may be much larger than the typical prices for health care services in part because of the number of lawsuits challenging the law – at least 50 cases as of 2026 (O’Neill Institute 2026).
Health care providers have largely prevailed in those lawsuits, and federal agencies have been directed to rewrite rules for arbitration so that additional considerations listed in the law – including providers’ experience, the severity of a patient’s condition, and good faith efforts to join networks – are considered on an equal basis with the QPA (Keith 2025). Those changes and the uncertainty they bring may be contributing to higher arbitration awards, raising the prospect that, over time, the law could increase health care prices and premiums (Baron 2023).
Reports also suggest that IDR claims are disproportionately concentrated in certain segments of the health care system. In 2023 and 2024, the five organizations with the most claims accounted for nearly 60 percent of all filings (Hoadley and Watts 2025). Many cases came from large groups backed by private equity and other investors or revenue-cycle management firms (Hoadley et al. 2026, Fiedler and Adler 2024). Claims are also concentrated in certain states; through 2024, nearly two-thirds of them were filed in four states—Arizona, Florida, Tennessee, and Texas—that collectively represent less than 20 percent of the U.S. population (Hoadley and Watts 2025). Although heavy use of the IDR system is currently concentrated among specific firms and localities, the financial gains for those firms may incentivize broader use of the system over time.
The administrative costs associated with the IDR system have also exceeded CBO’s projections. Recent estimates suggest that insurers and providers spent nearly $900 million in fees associated with the arbitration process through 2024 (Hoadley and Watts 2025). Those fees are greater than anticipated because the volume of IDR cases exceeded CBO’s projections and because the fees were increased by CMS during that period to cover the unexpected volume. (The administrative fees assessed for each party submitting a claim were reduced in a recently published rule; see CMS 2026.)
Insurers’ and providers’ administrative costs may also be greater than expected because of the costs of submitting information to the IDR system, although the magnitude of such costs is more uncertain. Significant increases in insurers’ administrative costs can increase premiums for commercial health insurance and, in turn, federal subsidies for health insurance.
Although evidence suggests that prices for services affected by the No Surprises Act may have initially decreased, arbitration outcomes could lead to higher prices over time. If providers can systematically secure large payments through the IDR process, they have an incentive to remain out of network or demand higher in-network rates. Although surveys of insurers suggest that less than 0.05 percent of all claims go to arbitration (AHIP 2024), those claims could have an outsized effect on bargaining and, over time, cause negotiated prices to increase. An increase in prices would increase premiums for commercial health insurance and, in turn, lead to larger federal deficits.