House Energy and Commerce Ranking Member Rep. Frank Pallone, Jr. (D-N.J.), one of the authors of the No Surprises Act, recently introduced the Lower Premiums, Faster Payments Act (H.R. 10788) to replace the law’s independent dispute resolution (IDR) process. While the No Surprises Act has largely protected patients from surprise medical bills, Pallone explained, “a few bad actors — largely backed by private equity — are gaming the system, creating backlogs, delaying payments, and driving up premiums.”
Ranking Member Pallone also joined Energy and Commerce Committee Chairman Rep. Brett Guthrie (R-Ky.) on a new bipartisan letter asking the Congressional Budget Office for an updated cost assessment of the arbitration process. The request comes as employers and union health funds that say they’re already absorbing arbitration’s excessive costs.
Union Members Are Seeing IDR Costs in Their Premiums
In letters sent to the House Ways and Means Committee and Senate HELP Committee, the AFL-CIO warned that IDR costs are “already being passed to workers in the form of higher premiums.” Data from union-negotiated health plans show how:
- Boilermakers National Health and Welfare Fund: IDR entities (IDREs) sided with providers in 77% of the fund’s cases, awarding 150% to 750% of the median network rate. In one back surgery, the in-network surgeon billed $15,790 for the entire procedure. The out-of-network co-surgeon received $144,000 for two procedure codes on the same case through IDR.
- 1199SEIU Funds: IDR awards have totaled $52 million above regular out-of-network rates since 2022, with some out-of-network providers claiming to be in-network to pursue IDR awards.
- 32BJ Health Fund: IDR determinations have totaled about $37 million on claims originally paid at about $8 million, and, as of July 2026, the fund has paid $711,000 in administrative and IDRE fees.
Cost Burden on Employers Forces Costly Trade-Offs
For self-funded employers, which pay claims directly, IDR has become an untenable cost. A recent white paper from The ERISA Industry Committee (ERIC), based on interviews with large plan sponsors, found:
- One plan projects IDR payouts will consume up to 6% of its total 2026 healthcare spending, after awards in the first half of 2026 ran more than four and a half times the original billed value of the underlying claims;
- Another plan expects its IDR costs to rise from $3.5 million in 2025 to $12 million in 2026, “driven almost entirely by a single emergency room operator”; and
- One plan, which found that its opening offers had almost no bearing on outcomes, described arbitration decisions as “functionally random.”
Melissa Bartlett, ERIC’s senior vice president for health policy, said the process has created a “massive unforeseen crisis in employer-sponsored coverage.”
As the National Association of Manufacturers noted, “This has left employers holding the bill. Employer-sponsored health plans are often forced to absorb higher costs while private equity-backed providers take advantage of an oversight—the arbitrator cannot negotiate a middle-ground price.”
Urgency for Congressional Action
Employers and unions agree the No Surprises Act’s patient protections should stay. The problem is the arbitration process. CASMB urges Congress to act on reforms that ground IDR awards in reasonable, market-based payments, keep ineligible disputes out of IDR, and strengthen arbitrator oversight and accountability. Every month IDR goes unfixed, the bill keeps growing for the people who pay for coverage.
To learn more, visit www.stopsurprisebillingnow.com/arbitration
Recent Comments