Last month, the nonpartisan Congressional Budget Office (CBO) issued a rare warning: 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 companies acting as IDR dispute mills. The latest CMS data is even more damning: nearly $15 billion in IDR payouts went to providers in 2025 alone, a nearly 275% increase from 2024.
CBO also called out the pressure facing independent physicians due to continued IDR abuse. CBO found that just five organizations drove nearly 60 percent of all filings, and that “many cases came from large groups backed by private equity.”
By flooding the IDR process with disputes, certain private equity-backed providers have created a machine that independent physicians can’t match. Winning at industrial scale takes batch-filing operations, arbitration teams, and contractors — resources often not available to independent physicians.
Gaming IDR has lead to awards 3-9 times in-network rates. One report even found IDR awards for certain planned procedures, including plastic and spinal surgery, averaged more than 50 times typical in-network rates. That kind of payoff makes it much harder for independent practices, often playing by the rules, to remain independent. CBO warns that these incentives to exploit IDR are “potentially disadvantaging smaller providers and encouraging consolidation” — in a system where nearly 80 percent of physicians already work for hospitals or corporate entities. Systemic IDR abuse also creates more incentives for providers to operate outside of health plan networks, which could leave fewer options for affordable, in-network care for consumers.
Employers, employees, and taxpayers are facing higher costs as a result. CBO now projects that “arbitration outcomes could lead to higher prices over time” — resulting in higher premiums and larger federal deficits. CBO added that “the number of IDR cases has far exceeded projections, and awarded payments are often much higher than anticipated. Amounts from arbitration settlements may be much larger than the typical prices for health care services.”
For more information on the cost of IDR abuses, click here.
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