Congress moves to scrap No Surprises Act arbitration after $22B cost blowout

The No Surprises Act was designed to protect patients from unexpected medical bills — and by most accounts, it has. But the arbitration system built to settle payment disputes between providers and insurers? That's a different story. Rep. Frank Pallone (D-N.J.), one of the law's original authors, introduced the "Lower Premiums, Faster Payments Act" last week, which would eliminate the Independent Dispute Resolution (IDR) process entirely after 2027.

Under the new bill, insurers would pay providers flat out-of-network rates based on median in-network payments as of January 2019, adjusted annually for inflation. Pallone argues the current system has been exploited by "a few bad actors — largely backed by private equity — gaming the system, creating backlogs, delaying payments, and driving up premiums." Provider groups, including the American College of Radiology and American College of Emergency Physicians, pushed back, saying the bill gives insurers too much leverage over physician pay.

By the Numbers:

• $22.4B — total extra healthcare costs attributed to the IDR process through end of 2025
• >75% of resolved disputes in 2025 came from just three private equity-backed organizations
• For some services like breast reductions, providers were paid 80x what Medicare would have reimbursed

Why it matters: The IDR system's escalating costs pose a real threat to insurance premiums for everyday Americans. This bill signals serious congressional momentum to overhaul a process that, despite good intentions, has become a major financial battleground — with patients potentially footing the bill.