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News
The No Surprises Act was meant to protect patients from unexpected bills — but its arbitration process is becoming a financial nightmare for employers. A new ERIC report finds IDR payouts have surpassed $15 billion, with self-funded employers bearing the brunt of costs they can't predict, audit, or control. Georgetown researchers put total IDR-related costs at $22.4 billion through 2025, and the numbers keep climbing.
The No Surprises Act (NSA) was designed to shield patients from surprise medical bills, but its Independent Dispute Resolution (IDR) arbitration mechanism is generating massive, unintended costs — and self-funded employers are footing much of the bill. A new report from the ERISA Industry Committee (ERIC) warns that IDR payouts are becoming "untenable," with one employer seeing payments nearly double from $3.5 million in 2025 to a projected $12 million for full-year 2026. Another employer estimated IDR alone could account for 5–6% of total healthcare spending this year.
The problem is compounded by a lack of transparency: employers say they can't reliably determine what IDR is costing them, which providers are driving claims, or whether their negotiators are engaging effectively. Arbitration decisions are described as "functionally random." Georgetown University researchers put total IDR-related costs at $22.4 billion through 2025 — nearly 3.5x higher than in 2024 — driven by a 77% surge in dispute volumes and a 264% jump in payment amounts. Providers win roughly 85% of cases, often securing payouts far above in-network rates.
By the Numbers:
Why it matters: Skyrocketing IDR costs are already trickling down to consumers through higher premiums, with UnitedHealthcare citing a 2–6% premium impact. Policymakers are under growing pressure to reform the NSA before its arbitration system undermines the very cost-containment goals the law was built to achieve.
