Employers Seek Intervention on Surprise Billing
Employers, insurers, and patient advocacy groups are calling for federal agencies to intervene in the surprise medical billing arbitration process, which they describe as dysfunctional. The ongoing litigation and regulatory uncertainty are creating friction in billing workflows for both providers and payers. This environment presents an opportunity for RCM vendors that can help clients navigate regulatory volatility.
- The Independent Dispute Resolution (IDR) process, established by the 2020 No Surprises Act, has seen a much higher volume than anticipated, with providers initiating 1.5 million billing disputes in the last two quarters of 2024 alone—more than 70 times the projected annual caseload. - Healthcare providers have prevailed in the vast majority of arbitration cases, winning approximately 85-88% of resolved disputes. These wins often result in significantly higher payments, with median awards reaching over four times the median in-network rates for the same services. - A small number of provider organizations, many backed by private equity, are responsible for a disproportionate share of the disputes. In the first half of 2025, the top 10 initiating parties accounted for nearly 70% of all disputes filed. - The high volume of cases has created a significant backlog, with resolution times doubling from 61 to 122 days by the end of 2024. This has led to long delays for providers in receiving final adjudicated payments. - Total costs associated with the IDR process, including administrative fees and payments to arbitrators, surpassed $1 billion by the end of 2024. This has led to concerns that the process, intended to save money, may be passed on to employers and consumers through higher insurance premiums. - A significant number of disputes submitted to the IDR portal are ultimately found to be ineligible for the process. A survey by insurance groups found that while plans identified 39% of disputes as ineligible, arbiters only flagged 17% as improper, meaning many ineligible cases still resulted in payment determinations. - Federal courts have consistently ruled that the No Surprises Act does not provide a direct path for healthcare providers to sue in court to enforce favorable payment determinations from the IDR process. This leaves administrative action by departments like Health and Human Services as the primary enforcement mechanism.
