Spending On IDR Course of Pushes No Surprises Act Prices To Extra Than $22.4 Billion Over Simply 4 Years

By Jack Hoadley and Kennah Watts

Greater than 5 years in the past, lawmakers enacted the bipartisan No Surprises Act (NSA), a regulation supposed to guard privately insured sufferers from sure shock medical payments and to assist cut back system-wide well being care prices. Since implementation, the NSA has efficiently achieved certainly one of two main targets by defending shoppers from steadiness payments for lined companies––as indicated by low criticism volumes, reductions in out-of-pocket spending, and different qualitative proof.

Nonetheless, the NSA’s second aim, to scale back premiums, has been severely undermined by stakeholder conduct and outcomes related to the unbiased dispute decision (IDR) course of. By numerous guardrails and a three-step means of preliminary fee, open negotiation, after which final-offer arbitration (supposed to serve a final resort and anchor round in-network charges), the IDR course of was designed to encourage truthful fee and to resolve disputes between payers on one facet of the dispute and out-of-network suppliers and services (collectively known as suppliers) on the opposite. (In final-offer arbitration, also called baseball fashion arbitration, every occasion proposes a fee quantity and the arbitrator selects one of many proposed quantities, with no capacity to “cut up the distinction” by awarding an quantity between the 2 proposals.)

As mentioned under, public use file (PUF) information present that the IDR system has resulted in whole prices of $22.4 billion from 2022 to 2025. This contains $15.6 billion in fee quantities awarded by IDR entities that exceed in-network charges; $4.2 billion in inside administrative prices; and $2.7 billion in IDR administrative and entity charges. This estimate dramatically exceeds our earlier estimate of $5 billion in whole prices for 2022 by means of 2024. In 2025 alone, whole IDR prices had been $16.6 billion, an quantity practically 3.5 instances larger than for 2024 alone.

These escalating prices are pushed by the sheer quantity of disputes (which rose by 77 p.c from 2024 to 2025) and better fee quantities (which rose by 264 p.c from 2024 to 2025). Much like our prior evaluation, the IDR course of is dominated by a handful of supplier organizations, a lot of that are backed by non-public fairness or produce other conflicted revenue pursuits. Suppliers additionally proceed to overwhelmingly prevail within the IDR course of, profitable about 85 p.c of all IDR disputes in 2025 with a median award of greater than 4 instances the qualifying fee quantity (QPA), which is outlined because the median contracted in-network fee for care.

This text summarizes the latest PUF information, offers an replace to our earlier estimate of the whole prices attributable to IDR, and discusses issues for policymakers who might need to revisit the NSA to make sure that the regulation meets its price containment targets with out jeopardizing client protections.

Over 4 Years, The IDR System Has Incurred $22 Billion In Whole Prices

Over the primary 4 years (2022 to 2025), whole prices attributable to the IDR system totaled $22.4 billion (together with air ambulance disputes) (Exhibit 1). This estimate dramatically exceeds our earlier estimate of $5 billion for 2022 by means of 2024. In 2025 (the latest information accessible), whole IDR prices had been $16.6 billion, an quantity practically 3.5 instances larger than 2024 alone.

Exhibit 1. Whole estimated prices of the IDR course of, 2022 to 2025*

Supply: Authors’ evaluation of Federal IDR Supplemental Tables and Public Use Information (2023-2025)

*Consists of air ambulance disputes.

Our estimate of the $22.4 billion in prices attributable to IDR is designed to replicate prices that might not be incurred if suppliers accepted the preliminary plan funds. Within the final two quarters of 2025, the median preliminary fee quantities had been about 90 p.c of the QPA. In keeping with information from the well being plan trade, about 76 p.c of preliminary funds by plans are accepted by suppliers and by no means proceed to IDR. There may additionally be some claims the place open negotiations result in an quantity above the preliminary fee quantity (estimated by the plan survey as 18 p.c). Thus, 6 p.c of NSA-eligible claims are estimated to go to IDR, (though PUF information can’t confirm this), representing a small, however expensive proportion of claims.

Elements of IDR System Prices

We constructed our price estimate from three foremost parts: the fee dedication quantities that exceed in-network charges (as measured by the QPA), the interior administrative bills incurred by the taking part events, and the charges that events pay when utilizing the IDR system. Our strategy is detailed right here.

Fee Quantities

The most important part of whole prices comes from the fee quantities decided by the IDR entities to be owed to the supplier, to the extent that these quantities exceed the QPA. We calculate this by subtracting the whole greenback quantity of all fee dedication awards from the whole greenback quantity of the QPA for the disputed companies. From 2023 to 2025, this equated to $15.6 billion (information unavailable for 2022). Each the preliminary fee quantity paid by the plan to the out-of-network supplier and the quantity the plan affords in IDR hew intently to the QPA, so we assert that quantities awarded above the QPA are attributable to the usage of IDR.

Some stakeholders, particularly supplier organizations, have criticized the QPA as an underestimate of the particular in-network fee or an underestimate of the market worth for out-of-network companies. To replicate this argument, we additionally estimated whole prices for 2025 at two totally different multiples of the QPA. If fee determinations quantities had been 150 p.c or 200 p.c of the QPA, our price estimate of $16.5 billion in whole prices for 2025 could be decreased by about $1.1 billion and by about $2.3 billion, respectively.

The overall awards alone, with out subtracting QPA, equate to $19.3 billion.

Inner Administrative Prices To The Events

The events engaged in IDR disputes additionally incur inside administrative prices. There isn’t any direct supply for measuring these prices, so we calculated them utilizing estimates by the Departments of Well being and Human Providers, Labor, and the Treasury (Departments) in an impression evaluation accompanying the interim remaining rule that arrange the IDR system. The Departments estimated that plans’ and suppliers’ inside prices to submit numerous IDR supplies could be $857 per dispute. Multiplying that by the whole disputes initiated from 2022 to 2025 yields $4.2 billion in inside administrative prices.

You will need to word that this quantity solely accounts for the mechanical facets of submitting and monitoring IDR disputes, as estimated by the Departments. This estimate does not embrace the executive prices that stakeholders incur for managing their IDR participation, prices incurred by or paid to third-party middlemen organizations to file disputes, or prices related to the a whole lot, if not 1000’s, of lawsuits (a number of of that are highlighted right here) which have been filed over the IDR course of for the reason that system was initiated. This evaluation additionally doesn’t replicate any prices a third-party administrator or insurer might cost to employers to have interaction within the IDR course of on their behalf.

Charges For The IDR Course of

Two forms of charges had been established by the NSA for working the IDR system. First, administrative charges are charged to all events for every dispute and are utilized by the federal authorities to manage the system. From 2022 to 2025, these charges totaled $742 million. For disputes initiated after June 3, 2026, the price quantity is $15, decreased from $115 within the current IDR operations rule. Second, the dropping occasion in a dispute pays an IDR entity price. These price quantities are set yearly by every IDR entity and maintained by the IDR entity to fund its operations. In 2026, the price ranges from $425 to $800 for single disputes and as excessive as $1,125 for batched disputes of as much as 25 objects. Whole IDR entity charges paid from 2023 to 2025 had been $1.9 billion (information not accessible for 2022).

Information Limitations

Moreover, we don’t try and estimate any prices added or saved by differential plan funds in comparison with these made earlier than passage of the NSA. As such, this isn’t an estimate of the general price impression of the NSA, which might replicate any potential impression on community fee negotiations and different broader results. We additionally can’t account for any potential monetary good points or different incentives that insurers or third-party directors may need as a result of, as an example, shared financial savings schemes.

IDR Prices Are Primarily Pushed By Dispute Quantity And Fee Awards

Each dispute quantity and the standard measurement of the awards made by IDR entities have skilled huge year-to-year will increase, and they’re the most important forces driving the quickly rising price of the IDR system. Whereas dispute quantity was up 77 p.c from 2024 to 2025, whole awards rose by 264 p.c, greater than triple the quantity progress. The hole between these charges, in addition to the speedy progress within the giant awards within the ninetieth percentile of disputes, factors to the affect of extra disputes with unusually high-dollar awards. Many of those disputes are filed by surgeons, assistant surgeons, and neurologists—none of whom had been the first targets of shock billing protections.

The proof introduced right here means that suppliers have a transparent incentive to maintain submitting disputes and to ask for larger and better quantities. Thus far, there isn’t any proof that there’s any ceiling on the quantity requested by suppliers which can be deemed by IDR entities to be the superior provide.

IDR Quantity Continues To Climb And Exceed Company Estimates

As famous above, the quantity of disputes has been steadily rising. In 2025, suppliers initiated 2.6 million new disputes, up 77 p.c from 2024. This quantity is astronomical compared to the Departments’ unique estimate of roughly 22,000 disputes a 12 months (together with air ambulance disputes). The dispute quantity has shortly risen in the latest eight quarters, together with a bounce within the first six months of 2026 to 1.75 million disputes, 50 p.c above the identical interval of 2025 (as documented in current bi-monthly reviews).

As now we have reported beforehand, disputes are disproportionately filed by a subset of suppliers. The most important filers of disputes are giant doctor organizations, a lot of that are backed by non-public fairness, and intermediary organizations that file disputes for suppliers. In 2025, over three-fourths of resolved dispute traces—which is how PUF information are introduced and account for companies filed in batches—got here from the next three organizations:

• Radiology Companions (30 p.c), a big nationwide radiology observe group with private-equity backing;
• HaloMD (27 p.c), a intermediary group that recordsdata disputes on behalf of suppliers; and
• TeamHealth (20 p.c), a multispecialty supplier group with private-equity backing (Exhibit 2).

Exhibit 2. Variety of resolved dispute traces* by submitting group, 2023 to 2025

Supply: Authors’ evaluation of Federal IDR Public Use Information (2023-2025)

*The PUF presents information when it comes to dispute line-items, to account for companies filed in batch. To replicate the whole variety of companies filed by supplier organizations, we current this quantity when it comes to dispute traces, relatively than disputes.

Not all disputes are filed instantly by supplier organizations. As famous above, over one-quarter of dispute traces in 2025 had been filed by HaloMD. Organizations akin to HaloMD market their capacity to maximise IDR awards, and HaloMD boasted of profitable $2 billion in award determinations for supplier purchasers, together with a 90-percent win fee and a median award greater than eight instances the QPA. This group has been accused in lawsuits—unsuccessfully up to now—of gaming the IDR system. Current reporting by STAT additionally signifies that HaloMD workers are allegedly instructed to maneuver shortly by means of IDR submissions with out verification of required steps.

Though HaloMD is the biggest such intermediary group submitting IDR disputes, there are others, akin to Zotec Companions. It’s troublesome, nonetheless, to determine the dimensions of involvement by middlemen organizations as a result of disputes could be filed below their purchasers’ names, making it unimaginable to determine these entities within the PUFs. As greatest we are able to inform from the info, many smaller native practices usually are not utilizing the IDR course of, whether or not below their very own identify or by means of middlemen, regardless that these suppliers may additionally be involved about allegedly inadequate funds by payers.

Equally, sure supplier specialties provoke the overwhelming majority of IDR disputes. From 2023 to 2025, emergency drugs and radiology accounted for almost all of dispute traces: 41 p.c and 29 p.c of all dispute traces, respectively. Whereas their share of whole claims has remained regular over time, their whole quantity of disputes has elevated considerably (Exhibit 3). The ever-increasing variety of disputes amongst these specialties is indicative of higher IDR uptake normally, which could possibly be pushed by extra suppliers transferring out-of-network, suppliers utilizing IDR as a extra routine means for fee, or some mixture of each incentives. In 2025, there was additionally a considerable uptick within the share of disputes filed by services—akin to hospitals, unbiased emergency departments, and air ambulance firms—relatively than particular person physicians or doctor organizations. The proportion of claims filed by services rose from 12 p.c within the first quarter of 2023 to 24 p.c within the fourth quarter of 2025.

Exhibit 3. Variety of resolved dispute traces by supplier specialty, 2023 to 2025

Supply: Authors’ evaluation of Federal IDR Public Use Information (2023-2025)

Suppliers Proceed To Prevail Overwhelmingly In IDR

In 2025, suppliers prevailed in roughly 85 p.c of all disputes, just like earlier years however down barely from 88 p.c within the second quarter of 2025 (the height win fee up to now). Of the 5 supplier teams with essentially the most disputes, 4 had a win fee above 90 p.c: Radiology Companions (96 p.c), Crew Well being (95 p.c), SCP Well being (92 p.c), and AGS Well being (91 p.c).

As we’ve beforehand written, IDR entities are paid on a per-dispute foundation––and usually are not paid for ineligible disputes––and thus have a monetary incentive to deem disputes eligible and rule in favor of suppliers to drive additional quantity. Previous to the latest PUF launch, the IDR entities weren’t recognized in resolved disputes. Nonetheless, the PUFs for the third and fourth quarters of 2025 explicitly determine IDR entities, alongside different dispute-level info. The info present that IDR entities fluctuate considerably in supplier win charges and award quantities.

Moreover, IDR entities that extra typically rule in favor of suppliers are correlated with larger award quantities. This will point out that suppliers requesting larger fee quantities have a tendency to pick IDR entities that almost all incessantly rule of their favor (Exhibit 4). For instance, within the fourth quarter of 2025, Island Peer Evaluate Group (iPRO) dominated in favor of suppliers in 99.4 p.c of arbitrated disputes. In these disputes, iPRO granted a median award of 601 p.c of QPA, nicely above the median for all disputes. Conversely, Medical Evaluators of Texas dominated in favor of suppliers in solely half (54.5 p.c) of their arbitrated disputes, with a a lot decrease median award of 159 p.c of QPA, the bottom amongst all IDR entities (Exhibit 4).

Exhibit 4. Supplier win fee, median award, and quantity* by IDR entity, This autumn 2025

Supply: Authors’ evaluation of Federal IDR Public Use Information (Q2 2025)

*Notice that the dimensions of the circle is proportional to the IDR entity’s quantity of dispute traces arbitrated.

The info additionally present that the IDR entities with the best win and award ranges are assigned the biggest quantity of instances (Exhibit 4). This will replicate the foundations that permit suppliers the preliminary selection of IDR entity, offering early proof that the volume-profit incentives mentioned above is perhaps at play: IDR entities that rule for suppliers extra typically, significantly when giant quantities are requested, usually tend to be chosen by suppliers and thus possible—below a system that pays per eligible dispute—to be extra worthwhile than their less-frequently chosen opponents.

The rationale behind IDR entities’ determinations stays unclear. Some IDR entities declare that awards above QPA usually are not “proof of arbitrator bias or course of failure” and as an alternative “replicate procedural defaults, incomplete submissions, or failures to supply info essential for evaluate.” However, with out transparency into the dispute submission course of or IDR entities’ fee dedication course of, outsiders can solely speculate as to why these variations come up.

Supplier Award Quantities Have Steadily Elevated And Elevate Price Considerations

As indicated above, supplier awards have grown much more quickly than the quantity of disputes. When suppliers prevailed in 2025, they gained a median award of 445 p.c of QPA. Whereas this award quantity is in keeping with the median award for 2024 (447 p.c of QPA), there was a considerable improve in outlier disputes. In 2025, the ninetieth percentile of awards had been 1,771 p.c of QPA, a bounce from 1,226 p.c of QPA in 2024. Which means a subset of suppliers requested for particularly excessive quantities within the prime 10 p.c of disputes, a minimum of 17 instances the QPA. As with earlier years, when plans prevailed, their wins continued to carry at QPA, with a median prevailing plan award of 105 p.c of QPA in 2025.

For a number of of the specialties with essentially the most disputes, suppliers’ median prevailing quantity was considerably larger in 2025 in comparison with 2024. For instance, in 2025, emergency companies had a median award of 315 p.c of QPA, up greater than 30 share factors from 2024 (280 p.c QPA). For specialties with the best award quantities, these annual will increase had been extra dramatic: From 2023 to 2025, the median awards for neurology and cosmetic surgery greater than doubled; in 2025, median awards for these specialties ranged from 24 to 30 instances QPA (Exhibit 5). For some companies, akin to breast reductions, these median awards as of 2025 had been greater than 80 instances Medicare charges and represented $62.7 million in whole awards.

Exhibit 5. Median prevailing supplier award as p.c of QPA by specialty, 2023 to 2025

Supply: Authors’ evaluation of Federal IDR Public Use Information (2023-2025)

*Cosmetic surgery is a subset of surgical procedure.

These wins signify billions of {dollars} in awards. From 2023 to 2025, the whole awards for surgical procedure companies equated to $3.8 billion (Exhibit 6). That is particularly notable given the small share of disputes (5 p.c) attributable to surgical procedure. Equally, neurology and neuromuscular companies accounted for five p.c of disputes however totaled $2.02 billion in awards. In contrast, radiology had extra disputes (roughly 23 p.c), however the awards totaled $1.03 billion. Although the quantity of surgical procedure and neurology disputes was comparatively small, the greenback quantities attributable to those disputes continued to drive total IDR prices. The same level is made in a current evaluation by the Niskanen Heart. (Quantity on this paragraph displays dispute traces within the QPA tab of the PUF).

Exhibit 6. Whole awards by specialty, 2023 to 2025

Supply: Authors’ evaluation of Federal IDR Public Use Information (Q2 2025)

Regardless of Excessive Quantity, The IDR Backlog Has Decreased And Ineligibility Charges Stay Constant

Lengthy waits to get disputes resolved have been supply of frustration and a consider including to system prices from this system’s begin. However, even with ever-increasing dispute quantity, it seems the Departments and the IDR entities have realized to course of disputes extra shortly. In 2025, IDR entities resolved about 2.7 million disputes, double the quantity closed in 2024. Moreover, as of the tip of 2025, 98 p.c of all IDR disputes submitted have both been resolved or had been lower than 30 enterprise days previous, which is the statutory deadline. The overwhelming majority of disputes (92 p.c) initiated for the reason that system started in 2022 have been resolved. That is largely as a result of IDR entities are resolving disputes extra shortly: Within the fourth quarter of 2025, the median time to dedication was 25 days, down from the height of 96 days within the third quarter of 2024.

The share of ineligible disputes has remained constant: Payers challenged eligibility in 41 p.c of disputes in 2025, and IDR entities dominated 18 p.c of disputes ineligible. The presence of so many ineligible disputes is one more issue including to system prices with out outcomes that assist any of the individuals. (Payers are burdened by having to evaluate and reply to disputes which can be in the end deemed ineligible, though they’re after all higher off with a dispute dominated ineligible than had that dispute been allowed to maneuver by means of the method.) Within the supplemental background on the latest PUF launch for 2025, the Departments reported the most typical causes for ineligibility had been as a result of violations of the 90-calendar-day cooling-off interval or disputes falling below state jurisdiction. No detailed information are publicly accessible on the explanations for dispute ineligibility.

Runaway IDR Prices Start To Have an effect on Premiums

These marked and fast-growing tendencies recommend that the NSA is including to, relatively than lowering, well being care prices. Whereas the NSA protects shoppers who obtain out-of-network care from shock medical payments, ever-increasing IDR prices will possible result in price will increase for shoppers in different methods. Within the quick time period, larger plan spending on IDR might lead plans to offset spending with larger premiums. In the long run, if suppliers proceed to acquire excessive IDR awards, employers and plans might take different steps to attempt to cut back well being care prices, together with additional elevating premiums, rising affected person price sharing, narrowing supplier networks, and limiting wage will increase.

On the similar time, suppliers might attempt to leverage IDR success in acquiring larger funds in certainly one of two methods. Some suppliers might choose to remain out of community and use IDR to get larger out-of-network funds. Different suppliers might leverage the risk to depart the community and use IDR to get larger negotiated charges for in-network companies. Each methods have the potential to push plan spending and premiums upward.

Whereas there may be little complete proof on how the IDR course of is affecting plan premiums, employers and insurers have begun elevating this concern in advocacy supplies, amicus briefs, and earnings calls. As an illustration, the New York Division of Civil Service reported that it has incurred greater than $200 million in extra declare funds from IDR for the state worker well being plan, which the company described as “a main contributor to the practically 10 p.c improve in premium charges [in 2025].” The United Service Staff union plan reported that it raised premiums by a further 1.75 share factors to offset IDR awards and costs. And a United Healthcare official famous that “the IDR course of is driving a 2 to six p.c incremental improve in whole premium bills” for his or her industrial enterprise.

These premium hikes allegedly stem each from excessive award quantities in addition to inside administrative prices, akin to these famous above. Actually, one mid-size well being plan reported having “nicely over 400 folks simply working IDR disputes. That’s vital. These salaries, the price of that every one must be paid someplace, and it comes out in premiums.” Whereas it’s unclear to what extent these prices are incurred by the insurer or handed on to the employer, it appears extremely possible that the prices are already being felt by plan members.

Wanting Ahead

The NSA’s IDR course of was anticipated to result in balanced outcomes. The requirement for open negotiations earlier than IDR could be initiated, the loser-pays requirement for IDR entity charges, and the usage of final-offer (baseball-style) arbitration had been all included as incentives for compromise. Given this assumption of balanced outcomes anchored round in-network charges (as represented by the QPA), the Congressional Funds Workplace (CBO) anticipated IDR to put downward stress on each in- and out-of-network fee charges. Consequently, CBO estimated as much as 1 p.c reductions in premiums and federal financial savings of $17 billion over ten years.

However the tendencies in IDR dispute quantity, the magnitude of IDR awards, and the ensuing IDR prices far exceed anybody’s expectations from when the NSA turned regulation. All stakeholders—suppliers, plans, and the IDR entities—have advanced incentives with regard to how they use the system. There’s little proof of compromise or shift of affords towards the middle in over three years of arbitration, and a number of observers have identified the failure of final-offer arbitration within the IDR course of. Ever escalating prices have led to renewed consideration from events starting from the CBO to the Trump administration to the editorial board of The Wall Road Journal.

As CBO not too long ago acknowledged, “Rising proof means that the regulation may not have the results [initially] anticipated.” To tell evaluation of the NSA’s real-world results, extra analysis is required to know IDR outcomes, IDR entity decision-making processes and determinations, and the regulation’s longer-term results on community participation, costs, and possession construction. It additionally stays to be seen whether or not and the way the adjustments made below the Trump administration’s not too long ago finalized IDR operations rule will have an effect on the incentives mentioned above, particularly with respect to dispute eligibility and quantity.

At the same time as this analysis continues, the time could also be ripe to revisit the NSA to appreciate the regulation’s unique cost-containment targets with out jeopardizing client protections. Policymakers might, as an example, exchange IDR with a fee customary to control what plans should pay out-of-network suppliers in NSA-eligible disputes. A fee customary was thought-about, though in the end not adopted, within the debate main as much as the NSA; this strategy scored higher financial savings and premium reductions from CBO.

Another choice could be for Congress to alter how IDR entities steadiness the varied elements thought-about in arbitration or to switch the elements altogether. Congress might, as an example, make even clearer that the QPA needs to be the first or first issue that IDR entities take into account throughout arbitration; restrict the usage of prior contracted charges to a sure time frame; cap the quantity that may be obtained by means of IDR; or permit exterior information sources (e.g., transparency in protection information) to be thought-about throughout arbitration. Congress might additionally modify the methodology for calculating the QPA, which has been criticized by suppliers as inaccurate and an underestimate of the true market fee for care, or exchange the QPA with a completely totally different measure of the industrial in-network fee.

Congress might additionally make operational adjustments to the IDR course of to attempt to mitigate the considerations raised above. As an illustration, Congress might impose penalties on stakeholders that file a lot of ineligible disputes or that fail to pay IDR awards in a well timed method. The latter coverage was included in a invoice launched by Consultant Gregory Murphy (R-NC). Congress might additionally require extra oversight or auditing of IDR decision-making and different processes.

Whereas now we have recognized a spread of choices to construct on and enhance the NSA, policymakers might need to prioritize insurance policies that extra instantly cut back the excessive prices of the IDR system by reforming the incentives which have resulted in excessive quantity and excessive fee determinations. These incentives and the ensuing prices are undermining the NSA’s aim of price containment and can possible contribute to larger prices for shoppers and employers within the midst of a well being care affordability disaster.

Authors’ Notice

The work described on this article was funded by Arnold Ventures. The authors thank Zeynep Çelik and Katie Keith for his or her contributions to this paper.

Jack Hoadley and Kennah Watts “Spending On IDR Course of Pushes No Surprises Act Prices To Extra Than $22.4 Billion Over Simply 4 Years” August 26, 2026, https://www.healthaffairs.org/content material/forefront/spending-idr-process-pushes-no-surprises-act-costs-more-than-22-4-billion-over-just. Copyright © 2026 Well being Affairs by Undertaking HOPE – The Folks-to-Folks Well being Basis, Inc.