Credit: makibestphoto.com/Adobe Stock
Analysts at the Congressional Budget Office are asking outside researchers to help them understand why so many health care claim disputes are flowing through the No Surprises Act independent dispute resolution system and why the payments awarded to doctors, clinics and hospitals have been so high.
The CBO analysts put out the plea for help in a notice posted Monday.
The No Surprises Act system is supposed to protect insured patients who use air ambulance services, emergency services at out-of-network hospitals, and out-of-network health care providers at in-network hospitals from big bills for out-of-network care. The patients are supposed to pay bills based on their plans' rules for in-network care, and the plans and providers are supposed to work the billing out amongst themselves and take any hard-to-handle disputes to "independent dispute resolution entities," or health claim fight arbitrators.
The CBO analysts note that, back in 2021, they predicted that the No Surprises Act IDR system would get only 22,000 disputes and punish providers who surprised insured patients with big bills based on out-of-network care prices.
Instead, the IDR system handled 3.4 million disputes between 2022 and mid-2025, the IDR arbitrators ruled in favor of the providers more than 80% of the time, and the arbitrators have awarded payments that have usually been much higher than insurers' typical in-network payment rates for the same services, according to the CBO analysts.
Early results suggest that average prices for services subject to the No Surprises Act rules have been falling, but "arbitration outcomes could lead to higher prices over time," the CBO analysts write. "If providers can systematically secure large payments through the IDR process, they have an incentive to remain out of network or demand higher in-network rates. An increase in prices would increase premiums for commercial health insurance and, in turn, lead to larger federal deficits.
The CBO analysts are asking researchers to send them "quantitative or qualitative research on the arbitrators' decision-making process and any incentives they face."
The analysts are also asking for research that can help them distinguish the effects of the No Surprises Act on health care prices from the effects of other factors; more recent data on health care providers' prices, provider network participation rates and ownership structures; and more information about what's happening to smaller health care provider organizations.
What it means: CBO analysts agree with employers and benefits advisors that the No Surprises Act IDR system has worked in unexpected ways.
Providers and plans have fought in court over whether the No Surprises Act IDR system can be called an arbitration process, and another takeaway from the CBO call for research is that CBO analysts feel free to call the IDR system an arbitration process and the IDR entities arbitrators.
The Congressional Budget Office: The CBO is a non-partisan arm of Congress that helps lawmakers and their aides understand current federal revenue and spending and analyze how legislative proposals could affect future federal revenue and spending.
The backdrop: Employers and benefits advisors have been asking policymakers to do something about the "surprise bills" insured patients often face for decades.
Congress responded by including the No Surprises Act in legislation that was signed into law in December 2020.
The Centers for Medicare & Medicaid Services, the agency that runs the No Surprises Act IDR system, recently published interim final regulations that could require plans and providers to provide more data and meet tighter deadlines when they take claim payment disputes to the IDR system.
Some system watchers are hoping the new rules will ease some "payer" concerns about the system.
Health insurers' perspective: America's Health Insurance Plans, a group for health insurers, welcomed the CBO analysts' acknowledgment that the No Surprises Act IDR system could increase U.S. health care costs.
"Provider-driven abuse of the No Surprises Act is adding billions in wasteful spending and raising health care costs for everyone," Chris Bond, an AHIP representative, said. "Policy action is needed to address flawed incentives in the IDR process and protect consumers from unconscionable price gouging."
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.