When the Congressional Budget Office (CBO) puts out a public call for new research on the cost impacts of the No Surprises Act, it’s the latest signal that the law’s arbitration process, also known as Independent Dispute Resolution (IDR), has veered far off course.
In a new blog post, CBO asks for the latest data on inflationary awards and the excessive flood of disputes that have now become standard with IDR. The agency’s takeaway is clear: the data now point to arbitration as a growing threat to the cost savings the law was meant to deliver.
CBO does not mince words about the impact:
“Although evidence suggests that prices for services affected by the No Surprises Act may have initially decreased, arbitration outcomes could lead to higher prices over time. If providers can systematically secure large payments through the IDR process, they have an incentive to remain out of network or demand higher in-network rates.”
This is one of the many unintended consequences from IDR abuse and misuse. A handful of private equity-backed providers and IDR middlemen have turned IDR into a profit engine: from 2022 through 2025, 4.8 million disputes were filed — against the roughly 17,000 disputes a year that were originally projected. Providers prevail in roughly 88 percent of cases, and awards routinely run 3-9 times in-network rates, with some specialties receiving upwards of 17 times in-network payments.
And here is the part that has raised alarms for employers and consumers footing the bill. CBO cautions that IDR’s spillover effect has broad cost implications:
“Although surveys of insurers suggest that less than 0.05 percent of all claims go to arbitration, those claims could have an outsized effect on bargaining and, over time, cause negotiated prices to increase. An increase in prices would increase premiums for commercial health insurance and, in turn, lead to larger federal deficits.”
CBO also confirms that IDR is tipping the scales in favor of the biggest players, noting that “large organizations dominate arbitration activity, potentially disadvantaging smaller providers and encouraging consolidation.”
A law that was intended to be a deficit reducer is doing the opposite, and the trend lines are clearly pointing the wrong way. The Trump administration and Congress need to stop the abuse and misuse of the No Surprises Act with commonsense guardrails that ultimately protect consumers and lower their healthcare costs.
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