Dive Brief:
- The federal process for insurers and providers to settle disputes over out-of-network bills appears to be dramatically adding to U.S. healthcare spending, fueling calls for reform.
- That mechanism, set up by the No Surprises Act, has generated more than $22.4 billion in extra costs over just four years, according to new estimates from Georgetown University. That’s a significant acceleration from researcher’s past estimates of $5 billion in extra costs over the dispute resolution process’ first two years.
- But dispute volumes and total awards have continued to increase since — a worrying finding, given costs could push premiums up. The researchers urged policymakers to revisit the NSA.
Dive Insight:
The Georgetown University report published Wednesday gives more ammunition to opponents of the billing resolution system set up by the NSA, called independent dispute resolution, or IDR.
IDR kicked off in 2022, about two years after the law was passed. It got off to a rocky start — providers filed a flurry of lawsuits alleging that IDR unfairly benefited insurers, regulators were forced to stop the process multiple times, and arbiters expecting a trickle of disputes were hit with an avalanche.
Despite bumps in the road, the system appears to be protecting consumers from unexpected medical bills. But health policy experts are growing increasingly concerned that IDR could be contributing to higher medical costs overall.
Instead of nudging out-of-network providers to ink contracts with insurers, the NSA appears to actually be rewarding them for remaining out of network. Federal data shows that providers file and win the vast majority of IDR claims, and frequently take home payouts well above in-network rates.
The $22.4 billion in total costs estimated by the Georgetown researchers includes $15.6 billion in awards that exceeded comparable in-network rates, along with $4.2 billion in internal administrative costs and $2.7 billion in fees that parties pay to enter IDR.
In 2025 alone, total IDR costs were $16.6 billion, an amount nearly 3.5 times higher than in 2024, according to the report.
The escalating costs are driven by the sheer volume of disputes, which jumped 77% from 2024 to 2025, along with growing payment amounts, which rose 264% over the same time frame — more than triple the volume growth.
The gap between volume and payment growth is due to providers filing, and winning, more disputes with unusually high dollar amounts, researchers said.
In 2025, providers won about 85% of cases, and were awarded a median payout more than four times higher than the qualifying payment amount, or QPA, a metric representing in-network rates for a given service in a particular geographic area.
But there was a notable increase in outlier awards, many of which were secured by surgeons, assistant surgeons and neurologists — specialists who weren’t the original target of surprise billing protections in the NSA. The law’s main focus was on providers more likely to be out of network with insurers, such as anesthesiologists and radiologists.
But from 2023 to 2025, median awards for neurology and plastic surgery more than doubled. In 2025, median awards for these specialties ranged from 24 times to 30 times the QPA, according to the report.
For certain services like breast reductions, median awards in 2025 were more than 80 times higher than what Medicare would have paid, the Georgetown researchers found.
Providers argue that metrics like the QPA or Medicare rates are not fair representations of what they should be paid for a service, and that IDR awards are closer to the actual costs of providing care.
But either way, spiking outlier payments equate to billions of dollars in extra spending. For example, from 2023 to 2025, awards for surgery services reached $3.8 billion, even though surgery claims only made up 5% of IDR disputes, according to the report.
“The evidence presented here suggests that providers have a clear incentive to keep filing disputes and to ask for higher and higher amounts,” study authors Jack Hoadley, a professor with Georgetown’s Center on Health Insurance Reforms, and Kennah Watts, a research fellow at CHIR, wrote. “To date, there is no evidence that there is any ceiling on the amount requested by providers that are deemed by IDR entities to be the superior offer.”
That spurs concerns that arbiters, meant to serve as a neutral referee between insurers and providers, are financially motivated to align with providers. Arbiters are paid by dispute, and receive no reimbursement if a dispute is deemed ineligible. As a result, they’re incentivized to find disputes eligible, and rule in favor of providers so they keep filing them.
Hoadley and Watts dug into the relationship between IDR entities’ rulings and award amounts, and found that arbiters that more frequently favor providers divvy out significantly larger payouts. Moreover, arbiters with the highest provider win rates and award amounts are given the most cases.
That might indicate that providers requesting higher payments select arbiters that more frequently decide in their favor, the researchers said.
Congressional scorekeepers used to think that the NSA would reduce spending. But the Georgetown report is the latest finding that dispute volumes and the magnitude of IDR awards have well exceeded expectations. And the resulting costs they’re creating already appear to be trickling down in the form of higher premiums, according to recent state filings and earnings calls from insurers.
For example, UnitedHealthcare reported in July that IDR was driving up its commercial business’ premium expenses by 2% to 6%. Employers broadly say that IDR is inflating medical trend by around 2%, according to the Business Group on Health, a nonprofit representing employers in health benefits issues.
The Coalition Against Surprise Medical Billing, an advocacy group backed by insurers and employers, seized on the Georgetown report to argue that IDR needs to be fixed.
“Employers and employees are already paying the cost of IDR misuse. It’s time for Congress and the Trump administration to rein in the bad actors and set real guardrails on the provider-driven waste, fraud and abuse with IDR,” the CASMB said in a statement Wednesday.
The Trump administration did finalize a rule this spring meant to make dispute resolution more streamlined and centralized. However, some policies could incentivize providers to file even more disputes, and the rule doesn’t address IDR’s financial incentives. Payers, overall, weren’t pleased.
