Get the facts: How is the No Surprises Act driving up healthcare costs?

• The No Surprises Act protects Americans from surprise medical bills, but it’s also driving up healthcare costs, and in turn, the premiums people pay for health insurance.
• The No Surprises Act established an arbitration system to resolve billing disputes between insurers and out-of-network providers.
• Out-of-network providers who take advantage of the No Surprises Act’s arbitration process are being handsomely rewarded with massive amounts of money, to the tune of nearly $15 billion in 2025 — more than three times higher than the amount they were awarded in 2024.¹ 
• In July 2026, the Centers for Medicare & Medicaid Services publicly acknowledged that the arbitration system is “being gamed to get higher prices” and that CMS was “actively working to clean it up.”²

Before the No Surprises Act was passed in 2020, thousands of Americans received surprise bills after going to the ER or having a surgery, even though they chose a hospital that participated in their insurers’ provider network. These bills typically came from out-of-network ER physicians, anesthesiologists and radiologists — the types of providers that patients don’t have any say in choosing. For example, a patient could choose an in-network surgeon and opt to have their surgery at an in-network hospital, only to receive anesthesia from an out-of-network anesthesiologist — and a big bill from that doctor weeks later. 

Thanks to the No Surprises Act, it’s now illegal for out-of-network providers to send those bills. Since they can no longer profit from sending surprise bills to their patients, some of those provider groups have found a new way to maximize their profits.

• The No Surprises Act established an arbitration system to resolve billing disputes between insurers and out-of-network providers.
• If the insurer and provider are unable to reach an agreement on what the payment should be, either party can pursue arbitration. 
• Through arbitration, the insurer and provider submit bids to an independent arbitrator, with the insurer often choosing a bid that aligns with the median rate it pays providers that participate in its network.
   

When the law was established, the federal government projected that about 17,000 disputes would move through the arbitration process each year.³ But that proved to be a drastic underestimate. In just the first five months of 2026, 1.4 million disputes were filed.¹ And just five provider groups have pursued 60% of the cases that have moved through arbitration.⁴

• The entities chosen to serve as the arbitrators were intended to be independent and neutral third parties, but the outcomes of the arbitrated disputes in 2025 and 2026 suggest these entities are strongly biased in favor of providers. The best evidence: the arbitrators selected the providers’ bid for the payment amount in 85% of cases.²
• And some of those awards were for outlandishly high amounts. Here’s an example:
   

o A UnitedHealthcare member needed brain surgery to remove a tumor. The member chose an in-network neurosurgeon to ensure their care would be covered by their health plan. 

o The neurosurgeon asked an assistant surgeon to work alongside him during the surgery, and that assistant surgeon was not in the member’s network.

o UnitedHealthcare paid the neurosurgeon the in-network rate for the surgery, which was $4,485. The out-of-network assistant surgeon, however, billed a staggering $16,500 — nearly 49 times what Medicare would pay if the patient had been a senior enrolled in Medicare.

o UnitedHealthcare paid the out-of-network assistant surgeon $897, which is nearly three times higher than what Medicare would have paid.

o The assistant surgeon wasn’t happy with that payment, so they took the case to arbitration. But during the arbitration process, the assistant surgeon asked for $55,000 — 163 times the Medicare rate and 6,300% of the median in-network rate.

o The arbitrator sided with the assistant surgeon.

o Ultimately this meant the assistant surgeon — a physician assistant or nurse practitioner — was paid 12 times more than the neurosurgeon.

The end result: Out-of-network providers who take advantage of the No Surprises Act’s arbitration process are being handsomely rewarded with massive amounts of money, to the tune of nearly $15 billion in 2025. In 2024, that figure was just $4 billion, meaning in one year, the amount paid to out-of-network providers tripled.¹ This suggests that some provider groups are now viewing the IDR process as a money-making venture, at the expense of every employer that provides health benefits to its employees and every American who signs up for a health plan.

Sadly, this also means that a law that was designed in part to lower healthcare costs is having the exact opposite effect.

There is, however, a bright spot here: It appears the federal government intends to take action. In July 2026, the Centers for Medicare & Medicaid Services publicly acknowledged that the arbitration system is “being gamed to get higher prices” and that CMS was “actively working to clean it up.”¹

As the federal government explores ways to improve the No Surprises Act so it better achieves its intended purpose of bringing down the cost of healthcare in our country, it’s important that you understand what steps you should take if you get an unexpected bill from a provider. This article provides more information on how to handle a bill from an out-of-network provider, including how to know if the No Surprises Act will protect you from having to pay it.

Read more Get the facts articles.