Independent Dispute Resolution Abuse Threatens No Surprise Act’s Success and Drives Up System Costs

The No Surprises Act (NSA) is shielding Americans from nearly 20 million surprise medical bills each year, but the federal arbitration system intended to resolve payment disputes is being overwhelmed and undermined by large volumes of ineligible claims submitted by some providers, according to a new national survey.

According to the joint AHIP and Blue Cross Blue Shield Association (BCBSA) analysis, the survey aimed to assess how the NSA’s Independent Dispute Resolution (IDR) system is functioning in practice by examining 2024 claims activity across commercial insurers. The methods involved collecting data from 25 health plans covering 154 million enrollees (71% of the commercial market) to quantify the number of NSA-eligible claims, dispute outcomes, and characteristics of submissions routed to IDR arbitration.

The results show that in 2024, the NSA prevented approximately 19.7 million surprise bills, and 76% of eligible claims were paid quickly without disputes. However, the IDR system is experiencing stress due to misuse. Of the 1.23 million disputes submitted to federal IDR, health plans identified 39% as ineligible for arbitration, more than double the 17% deemed ineligible by IDR entities (IDREs). Many of these disputes involved claims payable by Medicare or Medicaid, disputes already resolved and resubmitted, claims from in-network providers, or services regulated by state surprise billing laws. Notably, 45% of non-emergency service disputes were found ineligible by plans.

Because IDREs receive fee refunds only when disputes proceed, the report warns of a misaligned financial incentive that encourages moving forward even when cases do not meet the NSA’s eligibility criteria. The study found that fewer than half of ineligible disputes were flagged appropriately, and 15% of ineligible cases still resulted in binding payment determinations, often at amounts well above market rates.

Despite the operational challenges, insurers said they paid nearly three-quarters of arbitration awards within 30 days, with 41% paid in under 15 days. When delays occurred, they generally stemmed from provider submission errors or missing information.

The survey authors caution that unchecked IDR misuse drives unnecessary administrative costs, threatens premium stability, and risks destabilizing provider networks. They call for clearer eligibility rules, stronger regulatory oversight, improved data submission standards, and reform of the IDRE payment structure to reduce waste, fraud, and abuse. Without intervention, they warn, rising volumes of ineligible disputes will continue to erode the NSA’s intended balance of protecting patients while ensuring fair and affordable payment processes.

Reference

AHIP/BCBSA. New AHIP/BCBSA Survey Finds Providers are Flooding IDR System with Ineligible Disputes. Published October 2025. Accessed November 14, 2025. https://ahiporg-production.s3.amazonaws.com/documents/202510_AHIP_IB_No_Surprises_Act_Survey51.pdf