When Congress passed the No Surprises Act, the goal was clear: protect patients from unexpected out-of-network medical bills and lower costs for employees and employers. But a new analysis from the Private Equity Stakeholder Project (PESP) finds that private equity is taking advantage of the law’s arbitration process, known as the Independent Dispute Resolution (IDR) process, from both sides.
PESP’s findings show that private equity has made itself both the judge and the jury in this process, backing providers who flood the system with payment disputes while also investing in certified IDR entities that are making final payment determinations in those cases. As a result, what was intended as a “tool of last resort” has evolved into a profit scheme for private equity that fuels conflicts of interest, inflates arbitration awards and adds billions of dollars in costs that ultimately fall on patients, employers and health plans.
Below are key insights from the PESP blog. Read the full article here.
- “The growing body of evidence available three years into implementation demonstrates that while the No Surprises Act has reduced surprise bills for patients, it has led to ballooning health system costs that will likely be passed on to patients in the form of higher premiums.”
- “Private equity-backed companies remain key players in the costly IDR process – as providers that successfully extract high payments from payers through their high volume use of the IDR process and as certified IDR entities that receive fees to arbitrate disputes.”
- “At least one private equity firm has investments in both a provider using the IDR process as well as a certified IDR entity that arbitrates disputes, raising concerns about conflicts of interest.”
- “Private equity firms back at least five of the 15 certified IDR entities as of October 2025.”
- “Greater scrutiny of private equity-backed actors, including providers, IDR entities and third-party middlemen to eliminate potential conflicts of interest may also be required to protect consumers from rising costs.”
PESP’s findings further reinforce how the growing manipulation of the system comes with real consequences. As rising costs ripple through the entire healthcare system, they drive up insurance premiums, increase costs for employers and place greater financial pressure on patients. At the same time, private equity’s dual role creates a serious conflict of interest and raises concerns about the integrity of the process.
Without stronger oversight and reforms to prevent misuse and abuse, the law intended to end surprise medical bills risks fueling the very problem it was meant to solve.
For more information on the No Surprises Act, visit: https://stopsurprisebillingnow.com/
Recent Comments