Federal data released last week shows the No Surprises Act arbitration program is not working as intended, with disputes and costs climbing to record levels.
The Centers for Medicare and Medicaid Services released payment data for the second half of 2025, revealing a system that has grown far beyond initial expectations. More than 2.5 million disputes were initiated last year, a massive increase compared to the government’s original forecast of 17,000 cases annually. Nearly 2.2 million decisions were rendered, with providers winning the vast majority of those cases.
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While the law was designed to shield patients from unexpected bills, the data suggests it has created a new mechanism for price inflation. The median winning offer for providers has climbed to four times the statutory in-network benchmark, a figure that jumped to five times the benchmark in the final quarter of 2025. Specialties like neurology and surgery are driving these high awards, with neurology procedures reaching nearly 30 times the benchmark in the second quarter of 2025.
Arbitrators are basing their decisions on the history of past payments rather than the current in-network rates Congress intended as a floor. Providers typically base their offers on previous out-of-network rates or contracts with other insurers, ignoring the one statutory benchmark. This approach allows providers to pitch offers that are significantly higher than what patients would pay for the same service in-network, effectively gaming the system.
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Lawmakers respond with limited changes
Congress and the administration have attempted to address the issue, but critics argue the changes are insufficient. A final rule published by the Trump administration in May lowered the administrative fee per party from $115 to $15, aiming to reduce costs. However, experts note that this change could actually encourage more submissions, incentivizing further abuse of the IDR process.
Critics say the rule does not address the root cause: exorbitant payment decisions. The only bill currently moving through Congress, the No Surprises Act Enforcement Act, focuses on enforcement and deadlines but does not touch the high award amounts that drive up costs. Without reforms that center the in-network benchmark, the No Surprises Act risks becoming a price-inflation machine rather than a consumer protection.
