No Surprises Act payment dispute process booms to $22.4 billion cost in 4 years: study

The federal process for resolving surprise medical bill disputes under the No Surprises Act (NSA) has cost the U.S. health care system $22.4 billion in just four years, a new Georgetown University study found.

NSA established an independent dispute resolution (IDR) process that allows physicians and other clinicians a way to get paid for treating patients. At first glance, some good news is that physicians are winning the majority of contests with insurers — 85% — in the IDR process. It also appears the NSA is achieving legislators’ goal of protecting patients from surprise medical bills.

But most of the money is going to larger, often private equity-backed provider groups in specialties such as radiology, emergency medicine, surgery and neurology, which account for the vast majority of the disputes and payouts. Little, if any, of the $22.4 billion touched primary care. Many smaller independent practices are not using the system at all, and it looks like the process could start driving up in health insurance premiums for patients.

On Aug. 26, Health Affairs Forefront published “Spending On IDR Process Pushes No Surprises Act Costs To More Than $22.4 Billion Over Just Four Years.” The study was conducted at the Center on Health Insurance Reforms at Georgetown University’s McCourt School of Public Policy. Authors Jack Hoadley, Ph.D., and Kennah Watts, M.S.P.H., spoke about the findings in an online conference call with media.

What’s it going to cost us?

When Congress approved the NSA, lawmakers intended to ensure the patient protections did not add to the overall cost of the U.S. health care system, said Hoadley, a research professor emeritus at the center.

“In fact, there was projection by the Congressional Budget Office that it would actually lower costs and could actually help bring premiums down,” he said. “But to date, the system has failed to meet that cost containment goal. The enormous IDR costs inevitably will add to the insurance premiums paid by consumers, and we've already seen some employers and insurers attributing a portion of their premium increases to IDR costs.

“The time may, in fact, be ripe to revisit the NSA 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.

Costs outpacing expectations

NSA took effect in 2022. Since then, the study found $15.6 billion in payment amounts awarded above the negotiated in-network benchmark rate from 2023 to 2025, along with $4.2 billion in internal administrative costs for insurers and providers and $2.7 billion in fees to run the system. In 2025 alone, IDR costs reached $16.6 billion, nearly 3.5 times the 2024 total, as dispute volume climbed 77% and payment awards rose 264% year over year.

The reason for the increase is twofold, Watts said. The overall volume of disputes is increasing, as are the award amounts of the disputes.

“What's really important here is that the rate of increase in award amounts is far outpacing the rate of increase in the volume of disputes, and so this is really indicating to us that the outlier cases with very high award amounts are only growing and growing, and those providers are winning at higher and higher award amounts,” said Watts, a research fellow at the center’s McCourt School of Public Policy.

Who is filing the disputes?

Three organizations, Radiology Partners (30%), HaloMD (27%) and TeamHealth (20%), accounted for more than three-fourths of resolved dispute lines in 2025, the study found. Radiology Partners and TeamHealth are physician groups backed by private equity, while HaloMD is a middleman firm that files disputes on behalf of providers.

Emergency medicine (41%) and radiology (29%) together accounted for the majority of dispute filings from 2023 to 2025, but the highest payouts went to lower-volume specialties. Neurology and neuromuscular procedures made up just 5% of filings yet generated $2.02 billion in awards, with a median award 24 times the negotiated in-network rate. Surgery disputes, including breast reduction cases with median awards more than 80 times Medicare rates, totaled $3.8 billion.

Why aren't small practices using it?

"Many smaller local practices are not using the IDR process, whether under their own name or through middlemen, even though these providers may also be concerned about allegedly insufficient payments by payers," the authors wrote in the study.

Asked about that gap, Hoadley said navigating IDR requires resources most small practices lack, including familiarity with the system and the federal portal used to file cases. Middleman firms and revenue cycle management companies that already help small practices with billing and coding could, in theory, extend similar help with IDR, he said, though it is unclear how often that happens. Some middleman organizations may instead focus their attention on their larger partner organizations, he added.

Does primary care factor in?

Because the No Surprises Act applies only to certain out-of-network care tied to emergency visits and other facility-based settings, primary care specialties are largely locked out of the system, Hoadley said.

Family medicine, pediatrics and some internal medicine specialties could occasionally qualify if practicing within a hospital or outpatient facility, he said, but those physicians are typically treated as in-network providers rather than the out-of-network specialists the law targets. Anesthesiologists, radiologists, pathologists and surgeons make up most of the non-emergency disputes instead.

"Primary care practices that are practicing outside of facilities should never be eligible for this process," Hoadley said.

What does this mean for patients?

Even as award amounts climb, the law's direct consumer protections remain intact. A patient's cost-sharing is based on the initial payment amount, not on a higher amount a provider may eventually win in arbitration, Hoadley said.

But the researchers said the costs are increasingly showing up in what employers and insurers charge for coverage. New York's Department of Civil Service has reported more than $200 million in additional claims tied to IDR, which it named as a primary contributor to a nearly 10% premium increase for the state employee health plan. A United Healthcare official said the process is driving a 2% to 6% incremental increase in total premium expenses for its commercial business.

"The enormous IDR costs inevitably will add to the insurance premiums paid by consumers," Hoadley said.

Where does the law go from here?

The Congressional Budget Office (CBO) originally projected the No Surprises Act would lower premiums by up to 1% and reduce federal spending by $17 billion over a decade. The researchers said that has not happened, and the CBO put out a request this summer for further research into the law's effects on premiums, provider networks and consolidation.

In the analysis, one of the key criteria is the qualifying payment amount (QPA), defined as the median contracted in-network rate for care. To reform NSA, another option could be for Congress could give the QPA more explicit weight in arbitration decisions, something regulators tried but courts blocked. In discussion, Hoadley noted physicians, payers and arbitrators have argued over the accuracy of QPA as a measure in the IDR process.

Other options on the table include replacing IDR with a payment standard, an approach considered but not adopted in the original NSA debate. Congress could also target the incentives driving dispute volume directly, such as penalizing parties that file large numbers of ineligible disputes or fail to pay awards promptly.