The Congressional Budget Office is calling for more research into the effects of the No Surprises Act amid growing concerns that the law meant to shield consumers from unexpected out-of-network medical bills may actually be raising healthcare spending.
In 2021, the CBO estimated that No Surprises would lower insurers’ reimbursement to providers, subsequently decreasing monthly premiums for consumers and the nation’s overall healthcare spending.
Since then, the law has been successful in reducing surprise billing, and some studies suggest it may have lowered prices for some services.
But “emerging evidence suggests that the law might not have the effects that CBO anticipated,” U.S. budget researchers wrote on Monday.
Recent research is ringing warning bells, including findings that hospitals, medical groups and other providers win more than eight in 10 of all disputes over out-of-network bills and are awarded payouts significantly higher than in-network rates, the CBO said.
The agency asked for updated research on No Surprises’ impact on medical prices, providers’ network participation, arbiters’ decision-making processes and healthcare markets writ large.
Insurer groups immediately seized on the CBO’s call to action to argue that the process set up by No Surprises to resolve out-of-network billing disputes between payers and providers needs reform.
“Provider-driven abuse of the No Surprises Act is adding billions in wasteful spending and raising healthcare costs for everyone,” Chris Bond, a spokesperson for AHIP, said in a statement. “Policy action is needed to address flawed incentives in the [Independent Dispute Resolution] process and protect consumers from unconscionable price gouging by some PE-backed providers and IDR middlemen.”
Red flags with IDR
Finger-pointing between providers and insurers over surprise bills is nothing new. But the passage of No Surprises in 2020, and the beginning of IDR in 2022, served as a dramatic accelerant — especially as data solidified showing lopsided benefits for providers from the law.
No Surprises was meant to reduce the leverage providers had to demand higher rates from insurers by taking away their ability to go after patients for out-of-network bills. The idea was that, by preventing providers from raking in exorbitant out-of-network reimbursement, doctors would be incentivized to join insurers’ networks.
But in situations where providers remained out-of-network, No Surprises created IDR to determine how much reimbursement they should be paid for that care.
In IDR, both the provider and insurer offer what they believe is a fair price for a service rendered, and an independent arbiter certified by the government chooses one of the two amounts.
The system immediately became a problem — one that providers are benefiting from, critics say. Government data suggests that doctors and medical groups are raking in the dough from IDR, filing snowballing disputes, winning an exceptional share of awards and garnering massive payouts.
When No Surprises passed, the government expected about 17,000 cases would enter arbitration each year. But providers brought 1.2 million disputes in the first half of 2025 alone, many originating with a small group of private equity-backed companies.
Providers consistently triumph over insurers, win 88% of surprise billing disputes, according to the most recent federal data. And doctors are often awarded three or four times above comparable in-network rates when they win.
Providers argue the data isn’t proof of anything nefarious, but instead shows how little insurers pay them in network. Still, the situation has concerning spillover effects on healthcare spending more broadly, and could lead to higher prices over time, researchers have said. It’s a warning the CBO is taking seriously.
“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,” the agency wrote, noting that though fewer than 0.05% of claims go to arbitration, they could have an outsized effect on bargagining and drive up negotiated prices in the long term.
“An increase in prices would increase premiums for commercial health insurance and, in turn, lead to larger federal deficits,” the CBO said.
Congress has shown little interest in taking another whack at surprise billing, despite a broader focus on improving healthcare access and affordability on both sides of the aisle. However, renewed attentiveness from the CBO, which advises lawmakers on policy, suggests the issue hasn’t entirely been put to bed on the Hill.
It’s a welcome development for insurers, which have found little recourse to date in stopping alleged bad actors in IDR.
“A law that was intended to be a deficit reducer is doing the opposite, and the trend lines are clearly pointing the wrong way,” the Coalition Against Surprise Medical Billing, an advocacy group backed by insurers and employers, said. “The Trump administration and Congress need to stop the abuse and misuse of the No Surprises Act with commonsense guardrails that ultimately protect consumers and lower their healthcare costs.”
Health officials did recently finalize regulations meant to improve IDR, including by preventing ineligible disputes from entering the system. Still, payers argued the rule didn’t go far enough to address provider gaming.
