No Surprises Act arbitration adds $22.4B, may raise premiums

The No Surprises Act's arbitration process has cost $22.4 billion since 2022, with 2025 alone hitting $16.6 billion — triple the prior year — as medical providers won 85 percent of disputes, a Georgetown University analysis found.

"The system has failed to meet that cost-containing goal," said Jack Hoadley, research professor at Georgetown's Center on Health Insurance Reforms and co-author of the analysis. "Enormous arbitration costs inevitably add to the insurance premiums paid by consumers."

The analysis, published Aug. 26 in Health Affairs Forefront, found medical providers brought 2.6 million disputes in 2025, up 77 percent from 2024 — far exceeding the federal government's initial estimate of about 22,000 disputes per year. Awards in 2025 jumped 264 percent from the prior year, with providers receiving payments more than four times the qualifying payment amount, defined as the median contracted in-network rate.

The cost overrun contradicts the Congressional Budget Office's projection that the arbitration system would save money and lower premiums. New York state's budget document cited arbitration as a "primary contributor" to a nearly 10 percent premium increase for its 2027 state health plan, while UnitedHealthcare officials said arbitration added 2 to 6 percent in premium expenses for privately insured customers.

Congress passed the No Surprises Act in 2020 to shield patients from surprise medical bills — a common scenario where patients sought care at in-network hospitals only to be billed by out-of-network doctors, specialists, or other providers. The law removed patients from billing disputes entirely; they still pay copays, coinsurance, and deductibles required by their plans, but they should no longer be directly charged the bill's balance.

Doctors dissatisfied with an insurer's payment offer can seek arbitration under a baseball-style process — the arbitrator must award either the insurer's proposed amount or the provider's requested amount, with no splitting the difference. Since arbitration began in 2022, providers have won the vast majority of cases.

Three Firms Capture 75% of Arbitration Awards

The Georgetown analysis found more than three-fourths of awards involved three physician and middleman organizations: Radiology Partners, HaloMD, and TeamHealth. HaloMD, which files disputes on behalf of providers, is the largest middleman involved, winning 90 percent of cases and boasting $2 billion in award determinations for provider clients.

In a statement, HaloMD's Chief External Affairs Officer Patrick Velliky said the company "facilitate(s) access to sustainable reimbursement" for more than 27,000 doctors and clinicians nationwide. Radiology Partners countered that the analysis "misses the mark by failing to address the underlying factors driving physicians to request arbitration in the first place," citing insurers' "lowball offers to out-of-network providers."

Premium Increases Already Visible in State Plans

While the Georgetown analysis notes there is little direct evidence examining how arbitration affects premiums, insurers have sounded alarms in advocacy materials, court filings, and earnings calls. The New York state budget document said arbitration added more than $200 million in claim payments to the health insurance plan for state employees and families. The United Service Workers union plan raised premiums another 1.75 percentage points to offset arbitration awards and fees.

Most Americans receive health insurance through the workplace, and recent surveys suggest those costs soared this year at the highest levels since 2010. A survey released earlier this month reported more than 4 in 10 adults cited the cost of health insurance as the biggest problem needing fixing in the U.S. health care system.

The trajectory suggests the arbitration system's costs will continue to compound. With providers winning 85 percent of cases and receiving awards more than four times the median in-network rate, the incentive structure encourages more disputes — not fewer. Employers and insurers will likely pass these costs through to workers through higher premiums and deductibles at the next open enrollment cycle. Figures cited reflect the Georgetown analysis published Aug. 26; readers should verify against the latest official announcements.

This article is for informational reference only and does not constitute professional advice.