STAT’s Tara Bannow recently published an investigation into Nutex Health, a hospital operator whose financial turnaround from near bankruptcy has been fueled by abusing the No Surprises Act’s arbitration process. Her reporting builds on the growing body of evidence from STAT, the New York Times, Bloomberg, and others documenting how certain providers are exploiting the Independent Dispute Resolution (IDR) process as a dedicated profit-engine.
The latest CMS data leaves no room for argument: nearly $15 billion in IDR payouts went to providers in 2025 alone, a 275% increase from 2024. This data comes on the heels of a rare warning from the nonpartisan Congressional Budget Office (CBO): the intended cost savings for employers and employees under the No Surprises Act are in jeopardy because the law’s dispute backstop, the Independent Dispute Resolution (IDR) process, has been turned into a revenue engine by certain private equity-backed providers and IDR middlemen.
Highlights from STAT are included below (emphasis added). To read the full article, click here.
Nutex operates unlike any other emergency room or hospital in that it regularly turns patients away. Yet, it takes advantage of the No Surprises Act and the IDR process which was designed to safeguard patients in emergency cases.
- “Robert Behounek walked into the Albuquerque emergency room last fall with telltale signs of a heart attack… The receptionist at [Nutex owned] Albuquerque ER & Hospital asked for his health insurance card, but he didn’t have insurance. She told Behounek that his visit could cost upward of $1,600. ‘I said, ‘I don’t have that. Can you just bill me afterward? I’m worried I’m having a heart attack,’ Behounek recalled. ‘She just said, ‘There’s nothing we can do for you. We can’t see you here unless you pay the cost first.’ I said, ‘But you guys are an ER,’ and she said,‘We’re not that kind of ER.’”
- “[Nutex] charges emergency department prices while avoiding the responsibilities that usually come with being an ER; namely, taking all comers. It’s just one way Nutex has enriched itself and its investors through exploiting loopholes in laws meant to protect patients. In recent years, that’s meant funneling most of its bills through a surprise billing ban’s arbitration process, even though it’s meant to be a last resort. It’s been a gold mine, quadrupling its revenue.”
- “At the end of 2024, Nutex reported meeting its goal of sending up to 70% of bills to arbitration. That’s despite the fact that Congress designed the program to be used only after attempts to negotiate with insurers had failed.”
The federal arbitration process has been a “stunning success” for certain providers, despite stunning costs to the rest of the healthcare system.
- “The federal arbitration process set up under the No Surprises Act has been a stunning success for providers. Not only are they winning in over 80% of cases, they’re securing payments that are three to nine times in-network rates.”
- “Because of that, it cost at least $5 billion between 2022 and 2024 alone, potentially wiping out the savings Congress expected it to generate.”
Even Nutex Health’s investors think its “eye-popping” financial reversal – driven largely through IDR – has been too good to be true.
- “For Nutex, this arbitration process has generated eye-popping returns. In less than a year, the company more than tripled its revenue and profit soared nearly twelvefold.”
- “The numbers are so dramatic, in fact, that some investors view the money-making strategy as a house of cards. Several are suing Nutex over what they say is an unsustainable reliance on arbitration wins and a precarious alignment with HaloMD, a middleman whose tactics are the subject of multiple lawsuits.”
- “By the end of 2025, Nutex’s finances were unrecognizable. Revenue had nearly quadrupled from its 2022 trough, from $219 million to $875 million. The company reported $444 million in gross profit in 2025, a margin of 51%.”
Patients and regulators are taking notice of Nutex’s arbitration demands.
- “In Idaho, the state’s Blue Cross plan says Nutex often seeks payments in arbitration that are 10 times Medicare rates. In one instance, the company charged nearly $3,000 to treat a runny nose, when the median commercial rate is $376. The state’s insurance department told STAT it’s investigating Nutex’s use of arbitration.”
For more on the costly impact of IDR, click here.
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