A new Paragon Health Institute analysis urges Congress to reform IDR and address the misaligned incentives driving up costs for employers and consumers. The paper builds on mounting evidence of excessive arbitration awards and limited oversight, citing an estimated $22.4 billion in arbitration-related costs from 2022 through 2025.
“Taken together, these findings show that IDR is increasingly an alternative payment system rather than a backstop for unusual out-of-network disputes,” the report finds. High awards, the authors warn, encourage providers to remain out-of-network and pursue arbitration.
Highlights from the Paragon Health Institute report are included below. To read the full analysis, click here.
Arbitration payouts far exceed the median in-network rates IDR was meant to encourage. The data also undercuts claims that high arbitration awards merely reflect artificially low QPAs.
- “In 2025, the median award across all disputed line items was almost four times the Qualifying Payment Amount (QPA)—essentially an adjusted median in-network rate—and about 5.5 times the Medicare rate for the same services.”
- “Insurers lost the vast majority of the time even if they significantly increased their offers. In disputes decided by the highest-volume arbitration firms, insurer win rates remained low even when they made offers of 600 percent or more of the QPA.”
- “At the beginning of 2023, the 90th percentile of awards was around eight times the QPA; by the end of 2025, it had surged to nearly 18 times the QPA.”
- “Across provider types, win rates are consistently high while awards vary widely. Emergency medicine providers had median awards of 3.5 times the QPA, while neurological surgery providers had median awards of 28 times the QPA, and physician assistants about 26 times the QPA.”
A small number of private equity-backed providers, aided by IDR entities with little oversight or accountability, are driving the abuse. The report also found that arbitration firms deciding the most disputes tend to rule in providers’ favor most often, warranting closer scrutiny of the firms determining awards.
- “If a claim is deemed ineligible for IDR, the arbitrator is not paid… there is a clear incentive for the arbitrator to declare as many claims as possible eligible for IDR.”
- “The Departments have not yet decertified any arbitration firms, in large part because they have not conducted audits.”
The consequences extend beyond individual arbitration awards. High payouts are encouraging providers to remain out-of-network or demand higher contracted rates, putting pressure on the cost of coverage for employers, workers, and families.
- “Policymakers expected the law would lower provider prices, with the Congressional Budget Office projecting that it would reduce premiums by roughly 1 percent as well as federal deficits. Instead, the Center on Health Insurance Reforms estimates that cost increases as a result of the IDR process have jumped from $5 billion in 2022-2024 to $22.4 billion through 2025.”
- “The largest economic effect of the [No Surprises Act] likely occurs outside of the arbitration process itself. Providers can remain out-of-network and pursue IDR awards or use the prospect of those awards to demand higher rates during contract negotiations. Either response puts upward pressure on health care prices. This mechanism is particularly important because CBO’s original estimate of savings from the [No Surprises Act] depended on precisely the opposite occurring.”
The report’s call for award limits and stronger arbitrator accountability adds to the case for congressional action. CASMB urges Congress to act on reforms that ground awards in reasonable, market-based rates, keep ineligible disputes out of IDR, and strengthen arbitrator oversight and accountability while preserving patient protections.
For more on how IDR abuse is driving up health care costs, click here.
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