Calls Grow for Reforms to No Surprises Act Dispute System
Legal experts urge reforms to the No Surprises Act's dispute resolution system.
Why it matters: Misuse of the system affects insurers' costs and negotiating power, impacting legal advisors in healthcare contract disputes.
- 3.4 million IDR disputes filed by mid-2025, vastly exceeding CMS's 55,000 projection.
- Median dispute awards are 4.5 times higher than expected in-network rates.
- IDR process has cost approximately $5 billion from 2022 to 2024.
- In 2024, 40% of disputes were ineligible, but only 17% were barred.
The No Surprises Act, established to shield patients from unexpected out-of-network bills, has faced criticism for the handling of its Independent Dispute Resolution (IDR) system. Legal experts are advocating for reforms, citing misuse since the system's 2022 inauguration, where it processed 3.4 million disputes—dramatically higher than the Centers for Medicare & Medicaid Services' (CMS) initial estimate of 55,000.
These predominantly provider-driven disputes have resulted in median awards 4.5 times greater than expected in-network rates, contributing to a staggering $5 billion in handling costs over three years.
Additionally, 40% of 2024's disputes were deemed ineligible, yet a lack of enforcement meant just 17% of these were actually prevented from proceeding, prompting calls for stricter federal oversight.
The disproportionate number of disputes initiated by a few provider groups, with the top three entities accounting for 44% of early 2024 cases, raises concern regarding financial impacts on insurers, employers, and families. The potential for inflated insurance premiums is significant, making the dispute system a key area for legal advisors engaged in healthcare negotiations.
Over 60 organizations are advocating for stricter eligibility criteria and greater accountability of arbitrators to align system outcomes with the No Surprises Act's goal of reducing unexpected financial burdens.
By the numbers:
- 3.4 million — Total IDR disputes by mid-2025, exceeding projections by millions.
- 4.5 times — Median awards higher than expected in-network rates.
- $5 billion — Cost of IDR process from 2022 to 2024.
Yes, but: CMS projected only 55,000 disputes, but actual figures highlight systemic challenges.