In a new letter to the Congressional Budget Office (CBO), House Energy & Commerce Chairman Brett Guthrie (R-Ky.) and Ranking Member Frank Pallone, Jr. (D-N.J.) have asked for an updated cost assessment on the No Surprises Act arbitration process as evidence continues to show that IDR “is not functioning as Congress intended” and is “contributing to significant costs to the healthcare system and resulting in higher premiums for consumers and employers.”
Despite CBO’s original projection that the No Surprises Act would reduce federal deficits and premiums, arbitration has done the opposite, ultimately leading to premium increases for employers and consumers. In June, CBO issued a rare and stark warning on the escalating costs from provider-led abuse and misuse of the No Surprises Act, stating that “the law could cause premiums to increase if outcomes from arbitration enhance providers’ ability to secure higher prices by credibly threatening to stay out of network.”
The bipartisan request from the top Republican and Democrat on the House Energy & Commerce Committee comes as employers and consumers grapple with untenable IDR costs–a price tag that exceeded $16 billion in 2025 alone. Given certain providers’ continued exploitation of the IDR process, policymakers are rightfully focused on tackling the flood of ineligible disputes, inflationary provider awards, and flawed incentives within arbitration.
Highlights from Chairman Guthrie and Ranking Member Pallone’s letter are included below (for the full letter, click here):
Leaders of both parties agree the IDR process in the No Surprises Act is raising premiums.
- “The No Surprises Act was the culmination of a multi-year bipartisan, bicameral effort to protect patients from the unfair practice of surprise medical billing and lower healthcare costs for American families.”
- “While the law has protected millions of families from surprise medical bills, the IDR process is not functioning as Congress intended, and the initial data demonstrates that this is resulting in higher premiums for consumers.”
Congress intended the Qualifying Payment Amount (QPA) to anchor IDR payments, and the law’s projected savings depended on it.
- “At the time of passage…CBO also projected that the No Surprises Act would reduce private health plan premiums by 0.5 percent to 1 percent on average.”
- “This estimate was based on CBO’s conclusion that the payment amounts determined through the IDR process would reflect, on average, the Qualifying Payment Amount (QPA), above all other factors.”
- “The statute clearly specifies in detail how health plans must calculate the QPA, underscoring Congress’ intent for the QPA to serve as a predominant data point for IDREs to consider.”
Legislative reforms are needed to protect consumers and employers from provider-led abuse of arbitration and associated costs.
- “Collectively, IDREs awarded nearly $15 billion in payments to providers in 2025, and providers prevailed in over 85 percent of payment determinations. Data shows IDREs awarded payment amounts that were over six times the amount that would have been paid to providers based on local in-network rates.”
- “According to an analysis in Health Affairs, the IDR process contributed to an estimated $22.4 billion in total costs from 2022 to 2025… In addition to these direct costs stemming from arbitration, the law may also be changing the incentive structure by which providers and insurers reach in-network agreements, potentially creating upward pressure on in-network payment rates.”
Tackling the loopholes within the arbitration process is an urgent priority for lawmakers. Ranking Member Pallone recently introduced the Lower Premiums, Faster Payments Act (H.R. 10788), which would stop the costly abuse and misuse of arbitration by replacing IDR with market-based, median in-network payments for out-of-network services.
For more on how IDR abuse is driving up healthcare costs, click here.
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