The No Surprises Act (NSA) was established to protect patients from many unexpected medical bills associated with out-of-network care. While the law has helped shield consumers from surprise bills, it has also introduced new cost considerations for employer-sponsored health plans.
Under the law, certain payment disputes between providers and health plans may be resolved through a formal process called Independent Dispute Resolution (IDR). Understanding how this process works can help employers ask informed questions about how these disputes are managed and how they may affect plan performance and spending.
Why Was the No Surprises Act (NSA) Established ?
Before the NSA, patients could receive surprise medical bills when they unknowingly received care from out-of-network providers or had little control over who provided their care.
Common examples include:
- Emergency room visits involving out-of-network providers
- Care from an out-of-network provider at an in-network hospital
- Air ambulance services provided by out-of-network providers
These situations often resulted in patients being billed for the difference between what a provider charged and the amount paid by their health plan, a practice known as balance billing. According to KFF, surprise bills were common before the law’s implementation, affecting approximately one in five emergency visits and a meaningful share of in-network hospitalizations.
These situations still occur today. The difference is that the NSA generally protects patients from many of the surprise bills that previously resulted from them.
What Is Independent Dispute Resolution (IDR)?
When providers and health plans disagree on payment for an out-of-network service, they first enter an open negotiation period. If they cannot reach an agreement, the dispute may proceed to IDR, an arbitration process established by the NSA.
During IDR, both parties submit proposed payment amounts and supporting information to an independent arbitrator, who must choose either the provider’s proposed payment amount or the health plan’s proposed payment amount. The arbitrator may consider several factors when evaluating the dispute, including the Qualifying Payment Amount (QPA), a benchmark based on a health plan’s median contracted rate for a service in a geographic area.
What Has Been the IDR Experience So Far?
Since the federal IDR process was implemented, dispute volumes have far exceeded initial expectations. The federal government initially projected about 22,000 disputes per year. In 2025, 2.56 million disputes were initiated, roughly 115 times that projection.1
At the same time, providers have prevailed in the majority of IDR determinations. Analysis of federal IDR data from CMS found that providers won approximately 88% of IDR determinations in the 2025 reporting year. In addition, a Health Affairs analysis found that the median payment awarded when providers prevailed was 445% of the Qualifying Payment Amount (QPA), a benchmark used in the IDR process.
These trends highlight why employers should pay attention to how NSA-related disputes are managed. Growing dispute volumes, combined with higher reimbursement awards, can create additional cost pressures for employer-sponsored health plans.
How Can Independent Dispute Resolution (IDR) Affect Employer Healthcare Costs?
As dispute volumes grow, the impact of IDR extends beyond individual disputes and can influence overall health plan costs and administration.
Potential impacts include:
- Higher claim costs: When providers prevail in IDR, reimbursement amounts may increase, contributing to higher health plan spending.
- Administrative complexity: Negotiations, documentation, and arbitration create additional workload and expense.
- Long-term cost pressure: Growing dispute volumes and arbitration outcomes can influence reimbursement expectations and healthcare costs across the market.
Researchers estimate that the federal IDR process has generated billions of dollars in additional costs since its implementation, underscoring the importance of understanding how these disputes are managed and their potential impact on health plan spending.
Questions Employers Should Ask Their Health Plan Partners
Employers don’t need to become experts in NSA compliance or IDR arbitration. However, they should understand how the organizations that manage their health plan approach these disputes and their potential impact on costs. Key questions to ask include:
- How are NSA-eligible claims identified and managed?
- What percentage of disputes progress to IDR?
- How are reimbursement decisions supported and documented?
- What impact do NSA-related claims have on overall plan spending?
The answers can provide valuable insight into how effectively a health plan is managing both compliance requirements and healthcare costs.
Learn More
Explore our approach to out-of-network claims or download our NSA & IDR Overview Flyer.
