While the No Surprises Act successfully protects patients from unexpected medical bills, Nutex Health’s approach reveals how the law’s arbitration process, also known as the Independent Dispute Resolution (IDR), can be exploited for financial gain. The implications are far-reaching. If more providers adopt similar strategies, health care costs for patients and providers will skyrocket and further undermine the law’s consumer protections.
A recent Seeking Alpha article outlines how Nutex Health—a publicly traded operator of 24 micro-hospitals across 11 states—has made a core part of its business model “exploiting a unique arbitrage model under the No Surprises Act for strong revenue and profit growth.” In Q1 2025 alone, the company reportedly routed 60 to 70 percent of its claims through arbitration, winning over 80 percent of those cases. This generated more than $105 million, accounting for 73 percent of year-over-year revenue growth. In many instances, final payments were three to four times higher than insurers’ initial offers.
This aggressive use of arbitration raises significant policy concerns. The No Surprises Act’s arbitration process was designed to be a last-resort for settling payment disputes between providers and health plans—not to serve as a routine revenue model that financially drains patients and employers. Nutex’s systematic exploitation of the arbitration process demonstrates the urgent need for immediate oversight and stronger safeguards.
According to a recent Nutex earnings call transcript, executives openly acknowledged their growing reliance on arbitration. ”Every month, we are gathering more data collections and arbitration wins which help us refine our accruals, and we believe we are getting closer to a steady state,” one executive stated. “While there’s a lot of work that needs to be done, we are very encouraged by the positive progress.”
In fact, the same call highlighted how legislation—like Representative Murphy’s (NC-03) H.R. 9572—could further boost revenue. The company noted that provisions penalizing employers and health plans for unpaid claims, even those ineligible for arbitration, would “only help us get paid faster.” Such comments underscore the urgent need for policy countermeasures to prevent further manipulation of a system originally intended to protect consumers, not maximize corporate profits.
To protect consumers from inflated arbitration awards and price gouging, the Coalition Against Surprise Medical Billing (CASMB) urges the Trump administration to finalize an IDR operations rule that implements practical solutions, including:
- Prevent ineligible claims—including Medicare, Medicaid, state-arbitration claims, in-network claims, untimely claims, incorrectly batched claims, and claims that have already been through arbitration—from being entered into the arbitration portal and prohibit IDR entities (IDRE) from issuing payment determinations on ineligible claims and disputes initiated with incomplete or inaccurate information;
- Establish timely processes for correcting or addressing errors on non-eligible claims and a formal process to reject payment determinations for non-eligible claims;
- Encourage IDRE performance audits and hold initiating parties accountable where there is a demonstrated pattern of making false or misleading representations in the IDR process;
- Require enhanced training and oversight of IDREs on the No Surprises Act statute and guidance to ensure compliance and mitigate instances of abuse or misuse; and
- Mandate timely and transparent disclosures on IDR utilization by individual providers, as well as transparency on IDREs’ performance to ensure objective decision-making.
Unfortunately, CASMB’s concerns are proving accurate: the very same bad-actor provider organizations that drove the majority of surprise medical bills are now exploiting the arbitration process for financial gain. This troubling trend is effectively creating a new kind of surprise bill—one that burdens patients with higher costs under the guise of legal process. We urge the administration to take swift action to rein in these abusive practices and uphold the law’s original intent: protecting patients.
For more information on the No Surprises Act, visit stopsurprisebillingnow.com.
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