Surprise Billing Protections and Their Impact on Payer Disputes

The No Surprises Act met Congress's goal on the patient side, and in doing so built a dispute machine that now runs far past the size anyone planned for. Signed into law in 2020 and effective in 2022, the statute kept patients out of the middle of billing fights between providers and insurers by sending payment disagreements over out-of-network care into a federal independent dispute resolution process, known as IDR. Since 2022, a substantial share of Americans have avoided the surprise out-of-network bills the law was written to stop, and on that core promise, the statute has held. What it did not anticipate was how many providers and payers would use the dispute process itself, and how fast that volume would grow once the incentives became clear.

How IDR Volume Overwhelmed the System's Capacity

The growth in disputes has not leveled off at any point since the law took effect; it has compounded. Disputes filed in the first half of 2025 alone more than doubled the volume from the same period in 2024, and the second half of 2025 added another surge on top of that, continuing the upward climb rather than settling into it. The money has followed the same curve: IDR administrative fees collected in just the first half of 2025 came close to matching the total fees collected across all of 2022 through 2024 combined, and total IDR payouts more than tripled year over year.

Arbiters have not stood still in the face of this. In the first half of 2025, IDR entities actually closed more disputes than were filed during that window, narrowing the gap even as new cases kept arriving, though a substantial backlog still sat unresolved as of late June 2025. By the end of 2025, nearly every dispute filed since the process launched in 2022 had either been resolved or was recent enough that its pendency was expected, a genuine sign that the administrative machinery was catching up to its own caseload. The share of determinations issued within the statutory timeframe rose by roughly two-thirds between the first and second halves of 2025, a meaningful gain in a system that had been missing its own deadlines at scale.

Those gains have not erased the friction built into the process itself. Nearly half of all IDR submissions in the second half of 2025 were contested on eligibility grounds alone, filed by a party that did not initiate the dispute but challenged whether it belonged in IDR at all, a share that ticked up slightly from the first half of the year. That means a dispute now has close to even odds of stalling on a procedural question before anyone even reaches the question of price. The system is processing more cases, faster, than it was a year earlier, while also absorbing a volume of disputes that nobody, including the people who built it, expected it to carry.

Who is driving IDR volume and why that matters for independent practices

The surge in disputes is concentrated in a small number of large, often private equity-backed entities whose dispute filings dwarf everyone else's, and whose conduct is now shaping how payers treat every out-of-network claim that crosses their desk, regardless of who filed it. The top 10 initiating parties accounted for a clear majority of all disputes filed in the second half of 2025, and just three of them, HaloMD, Team Health, and SCP Health, made up more than a third of the total on their own. HaloMD's growth has been especially fast: the firm initiated 22% of all disputes filed in the second quarter of 2025 alone, a share built on a business model centered on arbitration itself rather than on direct patient care. On the payer side, the targets are just as concentrated. More than half of all disputes were filed against only three insurers, UnitedHealthcare, Blue Cross Blue Shield of Texas, and Aetna.

Providers keep winning these disputes, and winning big. In the second half of 2025, providers remained the prevailing party in the large majority of cases, and in most of those payment decisions, the winning offer exceeded the qualifying payment amount, the benchmark drawn from the median of an insurer's contracted rates for a service as of January 31, 2019, adjusted for inflation. A CMS spokesperson put the underlying dynamic directly, acknowledging that "the system is being gamed to get higher prices" and that the agency is working to address it. One case makes the scale of that gaming concrete: a plastic surgeon's practice collected a sum many times the procedure's advertised market rate for a single breast reduction, by filing two separate arbitration claims for the same surgery, one for the primary surgeon and one for the assistant, before two different arbitrators.

High win rates paired with high awards build their own incentive loop, and some of the firms driving dispute volume treat the law's open negotiation period less as a genuine attempt at agreement and more as a formality to clear on the way to arbitration. The consequence lands hardest on practices that had no part in creating it. Payers under financial pressure from a small set of large, high-volume filers respond by tightening prior authorization criteria, increasing eligibility challenges, and sharpening denial scrutiny across the board, and that tightening falls on large PE-backed groups and small independent practices alike, even though the independent practices never filed an IDR dispute in their lives. The GAO's data on emergency medicine billing shows how unevenly the gains from this system are spread even within the provider community itself: facility-billed emergency medicine payments rose from 2019 to 2023, while physician-billed emergency medicine payments for the same period fell. The arbitration system is producing winners, but the winners are not evenly distributed across the people providing care, and the practices with the least capacity to file disputes are the ones absorbing the response to disputes they didn't file.

How Payers Are Responding to IDR Pressure on Out-of-Network Claims

Insurers absorbing the cost of this surge are not standing still either, and the defenses they are building upstream are what independent practices actually run into when they submit an out-of-network claim. Health economists have pointed to a Wall Street Journal analysis finding that inflated IDR payouts run more than six times what providers would have been paid for the same service in-network, a gap large enough that it could push premiums higher and raise overall healthcare spending across the system. Payers facing that kind of exposure are not absorbing it quietly. Much of the added cost is being passed along to consumers and employers through premium increases, which makes the IDR surge a cost problem that extends well past the two parties actually filing disputes.

The sharpest tool payers have found is eligibility review. A Claritev analysis of 2025 claims data found that more than 47% of total claim submissions were deemed ineligible, a figure that points to eligibility screening as the single highest-yield lever payers have for cutting IDR volume and cost before a dispute ever reaches an arbiter. Insurance groups have made the case directly, arguing that a substantial share of the disputes submitted in 2024 never should have entered IDR in the first place, and that arbiters tend to accept marginal cases because they are only paid once a case proceeds to a determination. Litigation has offered payers a second line of defense, with less success. Major insurers have sued high-volume IDR filers directly, but four such cases were recently dismissed by judges who found that the courts have no authority to overturn a determination made by a certified No Surprises arbiter. With the courts largely closed off as a remedy, payers have leaned harder on the tools available before a claim ever reaches arbitration: expanding prior authorization requirements as a pre-claim screen, raising the bar on eligibility at the point a dispute is filed, and prolonging resolution timelines through aggressive challenges on claims that do make it into IDR. None of this is irrational on the payer's part. The data genuinely shows a small number of high-volume filers extracting outsized awards, and payers responding to that with tighter screening are responding to something real. The screening does not distinguish between the entity that filed 22% of all disputes in a single quarter and the independent practice that has never filed one at all. Both face the same prior authorization hurdle, the same eligibility scrutiny, and the same denial pressure on an out-of-network claim.

The 2026 Federal Prior Authorization Rule

The federal response to this friction arrived through a separate regulatory track. Under the rule, payers must decide standard prior authorization requests within 7 calendar days, replacing the open-ended review timelines that practices had been navigating without a firm deadline. Payers are also required to give specific reasons for a denial rather than issuing a generic rejection, a change aimed directly at the kind of opaque prior authorization denial that independent practices have had the least capacity to appeal or contest.

The rule's technical backbone is not yet fully built. CMS required payers to implement four FHIR APIs, including Patient Access, as the electronic infrastructure meant to carry these faster decisions and specific denial reasons to providers automatically. Where that infrastructure is incomplete or inconsistently implemented across payers, practices are left working the new 7-day deadline and the new specific-reason requirement through the same manual channels, phone calls, faxes, and portals, that slowed the old process down in the first place. The rule changes what payers owe practices on paper. Whether that obligation reaches an independent practice's daily workflow depends on how quickly each payer finishes building the systems the rule assumes are already there.