Bill from a No Surprises Act author would end arbitration over out-of-network physician pay

Physicians who treat patients out of network at in-network facilities would lose access to federal arbitration for services furnished on or after Jan. 1, 2028, under a bill Rep. Frank Pallone Jr. (D-New Jersey) announced Oct. 8. Insurers would instead pay a set rate tied to their median in-network contract rates.

The Lower Premiums, Faster Payments Act would require plans to pay that rate within 30 days after the physician or facility sends the bill. Pallone is ranking member of the House Energy and Commerce Committee and helped write the No Surprises Act in 2020.

The law took patients out of out-of-network billing disputes and created the independent dispute resolution (IDR) process to settle what insurers owe.

“A few bad actors — largely backed by private equity — are gaming the system, creating backlogs, delaying payments, and driving up premiums,” Pallone said in a statement announcing the bill.

His office said 10 provider groups submitted about 67% of the 2.5 million disputes filed in 2025. The 15 arbitration firms handling disputes collected $1.3 billion in fees that year, up from $885 million from 2022 through 2024. They awarded providers nearly $15 billion in 2025.

What the bill would change

Under the bill text, the qualifying payment amount (QPA) would become the out-of-network rate. The 2028 QPA would be each plan’s median contracted rate as of Jan. 31, 2019, for the same or similar service, in the same specialty and geographic region. That median would be increased by the consumer price index for all urban consumers through 2027 and then each year after that.

The formula would count the total payment, including patient cost sharing and the average expected value of bonuses, risk-sharing payments and other incentive payments. It would leave out contracted rates for physicians who did not actually furnish the service during the 2019 plan year.

Those two provisions track the Aug. 11 ruling by the full U.S. Court of Appeals for the Fifth Circuit, according to an analysis by the law firm Holland & Knight. The court struck down regulations that let plans count so-called “ghost rates” and leave out incentive payments.

Holland & Knight said both changes would tend to raise the median. The bill would also bar judicial review of the QPA methodology. It would give federal regulators 180 days to rewrite the calculation rules, by interim final rule if they choose. Starting in 2028, regulators would have to audit claims data from at least 25 plans a year and publish the findings.

Who uses arbitration

Emergency medicine accounted for 41% of dispute filings from 2023 to 2025, and radiology for 29%, according to a Georgetown University study that put IDR’s total cost at $22.4 billion over four years. Three organizations filed more than three-fourths of the dispute lines resolved in 2025: Radiology Partners, HaloMD and TeamHealth.

The law covers certain out-of-network care tied to emergency visits and facility-based settings, so most primary care physicians never touch the process.

“Primary care practices that are practicing outside of facilities should never be eligible for this process,” Jack Hoadley, Ph.D., a research professor emeritus at Georgetown’s Center on Health Insurance Reforms, said during an August media call on the study.

Hoadley said on the same call that the costs would show up in premiums. “The time may, in fact, be ripe to revisit the [No Surprises Act] to realize the law’s original cost containment goals without jeopardizing the consumer protections that are really the main reason this law got passed in the first place,” he said.

Anthony Wright, executive director of the consumer group Families USA, endorsed the bill in Pallone’s announcement.

He said it “would take commonsense steps to replace the arbitration system with a market-based benchmark that ensures providers receive fair but not inflationary payments that raise costs for everyone.”

Physician groups push back

The American Society of Anesthesiologists (ASA), American College of Emergency Physicians (ACEP) and American College of Radiology (ACR) came out against the bill the day it was announced.

They cited federal data showing insurers failed to participate and lost by default on 24.5% of IDR line items in 2025. Insurers offered $1 or less on 8.2% of line items. Excluding defaults, nearly 40% of insurer offers came in at or below the QPA.

“Giving health insurance companies even greater control over physician payments is not the solution to concerns about the IDR process – particularly when health insurers’ own practices are contributing to the problems Congress should be addressing,” said ASA President Patrick Giam, M.D.

“Smaller and independent practices are often shut out of the IDR process altogether, and continue to face mounting pressures of consolidation as insurers attempt to drive them out of network,” said ACEP President Ryan Stanton, M.D.

The groups called the bill premature. Federal agencies have not finished carrying out the IDR operations rule finalized this year, which cut the fee to file a dispute from $115 to $15. They also have not brought QPA calculations in line with the Fifth Circuit ruling.

Physicians win most disputes that reach an arbitrator. Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association (MGMA), told Physicians Practice in June that the larger problem is collecting afterward.

“If the payers are just hiding behind these more egregious cases, I don’t think they’re really addressing the main issue, which is that providers still prevail the vast majority of the time,” Gilberg said. “They could do more to step up in the IDR process and propose payments on their end that are closer to what an in-network payment is for their in-network providers.”

On Sept. 17, the 2nd U.S. Circuit Court of Appeals refused to revive a practice’s bid to collect more than $3 million in unpaid awards from Cigna. The court ruled that the law leaves enforcement to regulators.

What happens next

As ranking member of the minority party on the committee, Pallone has limited power to move the bill, Holland & Knight wrote. He would be in line to chair Energy and Commerce if Democrats win the House in the Nov. 3 midterms.

Other lawmakers would keep arbitration and enforce it instead. The No Surprises Act Enforcement Act (H.R. 4710/S. 2420) comes from Rep. Greg Murphy, M.D. (R-North Carolina), and Sen. Roger Marshall, M.D. (R-Kansas).

It would penalize plans that fail to pay within 30 days of an arbitration decision. The penalty would be three times the difference between the plan’s initial payment and the awarded rate, plus interest. MGMA and dozens of physician organizations have urged Congress to pass it.

The Senate Health, Education, Labor and Pensions Committee has held roundtables on IDR. One included Chair Bill Cassidy, M.D. (R-Louisiana), with Sens. Marshall, Josh Hawley (R-Missouri) and Maggie Hassan (D-New Hampshire).

Members focused on screening ineligible disputes before they reach arbitration and enforcing timely payment of awards, according to Holland & Knight.

Federal funding expires Dec. 11, and a year-end spending package could carry a narrower fix. MGMA is pressing to use that package for several physician payment priorities.

“We’re not seeing a lot of bills pass individually anymore, so this is our opportunity,” Madison Hynes, M.P.P., an associate director of government affairs at MGMA, said at the association’s annual conference in September.