The No Surprises Act successfully shielded patients from unexpected medical bills after taking effect in 2022, but its independent dispute resolution system has spawned a lucrative industry that is driving up healthcare costs. A CBS News investigation revealed that the arbitration process allows medical providers and specialized intermediaries to secure payments vastly exceeding benchmark billing rates, with much of the financial burden falling on employer-sponsored health plans and workers through higher premiums.
Congress created the arbitration mechanism to resolve disputes between insurers and out-of-network providers using a pendulum-style model where an arbitrator must choose one party’s suggested figure without negotiation. According to Turquoise Health data, arbitrators side with providers in over 85 percent of cases. Insurers report being forced to pay hundreds of dollars for routine lab tests or massive sums for surgeries, such as a plastic surgeon repeatedly awarded roughly 170 times benchmark rates. Georgetown University researchers noted that during the first half of 2025, parties submitted 1.2 million new disputes—vastly exceeding the initial federal projection of 17,000 cases per year—while certified arbitrators collectively earned over $2 billion in fees.
Critics point to private equity firms and specialized middlemen guiding providers through the process as key drivers of the inflated awards. Representative Frank Pallone, the lead sponsor of the legislation, criticized the current trajectory and announced plans to introduce a bill eliminating arbitration entirely in favor of mandating in-network rates for out-of-network services. Meanwhile, provider advocates and arbitration firms like HaloMD defend the system, arguing that insurance companies routinely submit inappropriately low offers or fail to participate, thereby skewing the process.
Source: cbsnews.com
