Understanding the No Surprises Act and Its Impact on Insurance Costs

The federal intervention to address billing conflicts between healthcare providers and insurers, implemented under the No Surprises Act, has effectively protected consumers from surprise medical bills. However, the arbitration process used to resolve these disputes has not curbed overall healthcare costs, potentially leading to higher insurance premiums. The No Surprises Act, enacted in 2020, aimed to resolve billing discrepancies by employing arbitration to settle payment disputes between insurers and providers. This law responded to widespread consumer grievances regarding exorbitant bills from out-of-network providers, particularly in emergencies or air ambulance situations. Despite its intention to control costs, the process has resulted in over $22 billion in payments to medical providers since 2022, with $16.6 billion occurring in 2025 alone, according to Georgetown University's analysis in Health Affairs Forefront.

Arbitration Process Outcomes

The arbitration outcomes have strongly favored medical providers. In 2025, they won 85% of the disputes, with awards frequently surpassing four times the median in-network rate. This high success rate has encouraged more providers to seek arbitration, with 2.6 million disputes raised in 2025, a 77% increase from the prior year. Georgetown's study pointed to substantial awards and administrative expenses as key factors driving arbitration-related costs.

Providers' Perspective

Providers argue that the arbitration process enables them to secure adequate reimbursement amid insurer lowball offers. HaloMD, representing providers in these cases, reported $2 billion in arbitration awards with a 90% success rate. Radiology Partners, another prominent player, criticized the process for failing to address underlying payment inequities between providers and insurers.

Insurance Premium Implications

The escalation in arbitration awards is anticipated to impact insurance premiums adversely. Though limited empirical evidence exists, several insurers have highlighted increased arbitration awards as a cost concern. A New York state budget document identified arbitration as a contributor to over $200 million in extra claims, leading to premium increases for state employees. Similarly, the United Service Workers union plan and United Healthcare have cited arbitration costs as factors in rising premiums.

Main Entities Involved

Looking Ahead

As the arbitration process continues under the No Surprises Act, the insurance industry must closely monitor its impact on costs and premiums. Insurance professionals should consider reassessing their strategy in handling out-of-network billing to mitigate potential premium hikes effectively. The ongoing debate between fair provider compensation and cost containment highlights a critical tension in balancing healthcare affordability and responsibility.