The No Surprises Act Protected Patients. Now Congress May Have to Fix What Happened Behind the Scenes.

When Congress passed the No Surprises Act, the goal made sense. Patients should not be able to do everything right, go to an in-network hospital, show their insurance card, receive care, and then find out weeks later that one of the physicians involved in their treatment was out of network and is now sending them a massive bill.

That needed to change, and in that respect, the law has been a meaningful step forward. Patients have greater protection from surprise medical bills, and that is something worth preserving.

But like a lot of healthcare legislation, solving one problem does not necessarily mean the cost disappeared. In this case, the fight over the bill did not go away. It moved somewhere else.

That is the part I think employers need to understand.

Under the No Surprises Act, when a health plan and an out-of-network provider cannot agree on what to pay for certain services, the dispute can move into the federal Independent Dispute Resolution process, or IDR. Each side submits an amount, and an arbitrator decides which one wins.

On paper, that probably sounded pretty reasonable. In practice, it has become a massive part of the reimbursement system.

Congressional Research Service data shows that more than 1.46 million federal IDR disputes were initiated in 2024 alone, more than double the number from the year before. Providers initiated more than 99% of those disputes. More recent analysis covering 2023 through 2025 shows roughly 4.7 million disputes entering the system, with providers winning a very high percentage of decided cases.

Those numbers should get the attention of every employer sponsoring a health plan.

The patient may no longer be stuck in the middle of the billing dispute, but somebody still has to pay the claim. For self-funded employers in particular, no insurance company is magically absorbing that cost. The employer is ultimately funding the plan.

That is why this is becoming more than a technical fight between providers and insurance companies.

Congress appears to be taking a closer look at how the system is operating, and I think that is appropriate. The Congressional Research Service has been providing lawmakers with more information about the IDR process, while committees in Washington have been discussing implementation problems, dispute volume, payment enforcement, and the incentives created by the current rules.

The issue is not whether providers are bad or insurance companies are bad. Healthcare debates become useless pretty quickly when everything gets reduced to picking a villain.

The better question is whether the rules are creating the behavior Congress actually intended.

If an out-of-network provider believes they can routinely receive a higher payment through arbitration than they could through a reasonable network contract, we should not be surprised when that changes their incentive to participate in the network.

That is where this becomes an employer cost issue.

If the arbitration process begins setting a higher de facto price for certain services, those prices do not stay isolated inside a government dispute process. They can eventually influence network negotiations, claims costs, premiums, stop-loss pricing, employee contributions, and the overall cost of the health plan.

That should concern employers.

One frustrating thing about healthcare is how often we act as though money appears from somewhere else. It doesn't.

When hospitals get paid more, somebody pays more.

When drug costs increase, somebody pays more.

When administrative complexity grows, somebody pays for that too.

And when an arbitration system results in higher reimbursements, that cost ultimately finds its way back to the organizations financing the healthcare system.

A huge portion of that financing comes from employers and their employees.

That is why I do not think the right answer is to tear apart the No Surprises Act. The patient protections are important, and we should keep them.

What Congress should do is take a much harder look at the payment mechanism operating behind those protections.

Why has the volume of disputes grown so dramatically?

Why are providers initiating virtually all of them?

Are claims entering the process that never should have qualified in the first place?

How concentrated is the activity among certain provider organizations, physician staffing companies, private-equity-backed groups, or organizations specifically built around the IDR process?

Are the awards being made through arbitration reasonably connected to the market price of care?

And most importantly, what is this system ultimately costing employers?

That last question deserves a lot more attention than it gets.

Employers finance an enormous percentage of healthcare in this country, yet they are often treated like spectators when healthcare policy is debated. They should not be.

A self-funded employer is not simply buying an insurance policy. That employer is paying the claims. It is paying the hospital. It is paying the pharmacy costs. It is paying the TPA. It is paying the PBM. It is paying the stop-loss carrier. And ultimately, it is paying for whatever financial incentives the healthcare system creates.

Those costs eventually show up on the employer's P&L.

That is why I believe employers need a much stronger voice in conversations like this one.

For too long, many companies have approached healthcare costs as something that simply happens to them.

The renewal comes in. Medical trend went up. Claims were higher. The carrier needs another increase. Employees pay more, and employers pay more.

Then everyone repeats the same conversation twelve months later.

I think that era has to end.

Employers need to understand what is driving their healthcare spending, how providers are being paid, how their networks work, what their contracts actually say, and where money is moving inside the healthcare supply chain.

The No Surprises Act is a perfect example of why.

Congress solved a very real problem for patients. That is a good thing.

But now we need to make sure the solution did not create another problem somewhere deeper inside the system.

If Congress reenters the fight over the No Surprises Act, I hope lawmakers focus on both sides of the equation. Protect the employee from the surprise bill, but also make sure the process designed to resolve that bill is not quietly driving healthcare costs higher for the employer and employee who ultimately fund the plan.

Protecting someone from a $10,000 surprise bill is absolutely progress.

But if we simply moved that $10,000 somewhere else in the system and made it harder to see, we have not really solved the underlying problem.

We have just changed who gets the bill.