Mounting calls for surprise billing fix divide Congress

Driving the news: The surprise billing law's dysfunction is affecting more than just providers and payers.

• A recent NBER working paper found that the law discouraged providers from participating in insurer networks in certain specialties and states, and "suggestive evidence" shows that insurers more likely to face arbitration disputes saw larger premium increases.
• The paper concludes this reveals "an unintended consequence of the NSA: The law's direct consumer protections may be accompanied by narrower networks and higher premiums."
• A Wells Fargo analyst note points out that the pace of arbitration filings seems to have "accelerated somewhat sharply" in June and July, causing them to increase estimated monthly costs associated with the process in 2026.

A coalition of 67 patient advocacy and employer groups and unions recently called on Congress to fix the No Surprises Act and ensure that premiums aren't driven up by "abuse of the arbitration process."

• Large insurers and benefit consultants are saying that the large volume of claims and high payouts that arbitrators award to providers will contribute to higher premiums next year.

The big picture: The No Surprises Act was passed in late 2020 with the intent of protecting patients from large, unexpected medical bills stemming from out-of-network care.

• These bills generally were for emergency care or care from an out-of-network provider working in an in-network hospital. Providers could "balance bill" patients for whatever their insurer wouldn't pay.
• Congress insulated patients by setting up an arbitration process for providers and insurers who couldn't agree on a payment amount.
• The number of disputed cases has far exceeded what was predicted, with providers winning roughly 85% of the time and frequently being awarded payouts multiple times the size of what they receive for in-network care.

The other side: Providers see the issue differently, arguing that insurers and their allies are feeding a fictional narrative of what's going on with the arbitration process.

• They say insurers' offers are often way too low, resulting in the disproportionately high provider win rate.
• A huge problem in their eyes is that insurers aren't paying up in a timely manner when they lose a case.

Americans for Fair Health Care, a group representing more than 70,000 providers, said insurers are committing a litany of abuses, including "depriving patients of access to in-network care by terminating provider contracts, slashing reimbursement, imposing patient cost sharing [and] denying NSA-covered services."

• "There's a reason providers are winning far more often than insurers. It's because, as courts have ruled, insurers are engaging in a consistent practice of making lowball offers," said Eric Berger, the executive director of the group.

State of play: There are early signs that Congress is divided over what's working and what needs to be fixed.

• The original surprise billing debate divided members not by party, but by which health industry a lawmaker was sympathetic to.
• So far, the most prominent proposed change to the law would help providers' position and increase penalties for insurers that violate the No Surprises Act.

Details: Insurers and third-party analyses argue that the process has gone so far off the rails, it's not only causing premiums to rise but also encouraging providers to opt out of contracting with insurers.

• Arbitration "has replaced uncertain collections from patients with a federally administered payment mechanism that can generate near-guaranteed awards far above typical in-network rates," the Paragon Health Institute writes in a new analysis.

• "For certain provider types, this shift makes remaining out of network much more financially attractive than it was before the NSA."

Zoom in: The arbitration process itself is riddled with bad incentives and is ripe for an overhaul, insurers and some third-party experts argue.

• Last year, 69% of the claims that were submitted for arbitration were either out of scope of the No Surprises Act or didn't go through the correct procedure to be eligible for arbitration, according to a new analysis from Elevance Health's Public Policy Institute using data from affiliated plans.
• However, arbitrators only dismissed 36% of those cases. Elevance said it challenges all out-of-scope and ineligible cases. The analysis will be published next week.
• The institute recommends ending the arbitrator's role in deciding whether claims are eligible and paying them for dismissed disputes as well as those that go through the process, among other changes.

Berger said Elevance's numbers are "FAR out of the industry norm," pointing to Centers for Medicare and Medicaid Services data showing that around 17% of disputes closed in 2025 were found ineligible.

• "It is also deeply ironic to critique providers for ineligible submissions when insurers have routinely withheld the very information needed to determine eligibility in the first place," he added.

Paragon also pitched addressing the incentives of the arbitrators, pointing out the inflationary incentives present for everyone involved.

• "Providers have strong incentives to pursue arbitration and seek large awards, [arbitrators] benefit from resolving more disputes, and insurers may be unable to improve their outcomes without increasing costs elsewhere in their networks," the Paragon report argues.

The bottom line: If there's anything everyone agrees on, it's that the millions of disputes going through arbitration are only a small fraction of the overall pool of potentially eligible cases.

• That means without intervention, the volume of disputes is likely to keep rising.