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Lawmakers are weighing competing proposals to address problems in the No Surprises Act’s payment dispute process. One bill would replace arbitration with a payment benchmark, while another would penalize insurers that fail to pay arbitration awards on time. The scope of any legislative agreement and the path forward remain uncertain.
Congress is considering competing proposals to change the No Surprises Act’s payment dispute system, after a sharp rise in arbitration cases and legal disputes over whether providers can collect awards from insurers. One proposal would eliminate arbitration in favor of a payment benchmark; another would impose penalties on insurers that miss the deadline to pay awards.
The law, passed in 2020, protects patients from many unexpected out-of-network bills, including bills for emergency or specialty care at an in-network facility. When an insurer and an out-of-network provider cannot agree on payment, either can take the dispute to independent dispute resolution (IDR), a form of arbitration.
Jack Hoadley, a Georgetown University health insurance policy analyst, told MedPage Today that the process was expected to be used in a relatively small number of cases, after negotiation failed. The government estimated roughly 22,000 disputes a year would enter arbitration; Hoadley said there were more than 4 million disputes in 2025. Those figures show the scale of the increase in case volume, though the source does not specify a comparable method or time window beyond the annual estimate and 2025 count.
Hoadley said arbitrators sided with providers in about 85% of cases, creating an incentive for some parties to seek higher payments. He also described the legal history of the qualifying payment amount (QPA), a benchmark intended to approximate median in-network rates. Courts rejected an initial regulatory presumption that arbitrators should default to the QPA, requiring them to weigh other factors as well.
Disputes Affect Payments and Costs
The debate concerns how payments are set between insurers and out-of-network providers, but the process can also affect patients and the broader health system. The law was designed to shield patients from surprise bills; disputes over what insurers owe providers are a separate part of that framework. Congress’s choice could shape whether that payment process relies on a benchmark or case-by-case arbitration.
High arbitration volume may increase administrative demands, while disagreements over award payments have prompted further litigation. The consequences of the proposals are disputed: physician groups argue removing IDR would give insurers greater control over payments, while consumer advocates say arbitration can encourage inflated claims and costly repeat disputes.
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How the Payment Process Evolved
The No Surprises Act took effect after Congress passed it at the end of 2020. It bars many out-of-network charges to patients when care is delivered at in-network facilities, then provides a process for providers and insurers to resolve payment disagreements without making the patient responsible for the difference.
Under the law, the QPA is one factor relevant to payment, but court rulings prevented it from serving as the default presumption proposed in early federal regulations. Separately, litigation has focused on enforcement of arbitration awards. Josh Hill, a Philadelphia attorney, told MedPage Today that two federal appeals courts had ruled providers cannot sue to collect awards, while a lower court reached the opposite conclusion. Cases in Maryland and Virginia could lead to further appellate review.
“Most people did expect arbitration to be used modestly in a relatively low number of cases.”
— Jack Hoadley, professor emeritus at Georgetown University’s Center on Health Insurance Reforms
Open Questions on Enforcement
Congress has not settled on a proposal, and the source report does not establish whether either bill has enough support to advance. It is also unclear how lawmakers would address the different concerns raised by providers, insurers and consumer advocates if they pursue a compromise.
The courts have not resolved the disagreement over whether providers can sue to collect unpaid awards. Further appeals could produce conflicting rulings, but whether the pending Maryland and Virginia cases will reach an appeals court, or eventually the Supreme Court, remains uncertain. The full cause of the arbitration surge and the effects of any legislative change are also not established in the report.
Bills Face Congressional Debate
Rep. Frank Pallone, the ranking Democrat on the House Energy and Commerce Committee, introduced a bill on October 8 that would eliminate IDR and use the QPA instead. Rep. Greg Murphy, a Republican from North Carolina, introduced a separate proposal in September 2024 that would require insurers to pay steep penalties for late awards and report more information about payment compliance.
The proposals represent different approaches: one changes how payment amounts are decided; the other focuses on enforcing existing awards. Further congressional action and the pending court cases will help determine whether the dispute system is changed by legislation or shaped further through litigation.
Key Questions
What does the No Surprises Act protect patients from?
It protects patients from many unexpected out-of-network bills, including certain bills for care received at an in-network facility. It also establishes a process for providers and insurers to resolve payment disputes.
What is independent dispute resolution?
IDR is arbitration used when an insurer and an out-of-network provider cannot agree on payment. The patient is generally not the party negotiating that payment dispute.
What would Rep. Pallone’s bill change?
The proposal introduced October 8 would eliminate the arbitration system and use the qualifying payment amount as the payment benchmark, according to the report.
What would Rep. Murphy’s proposal do?
His bill would require insurers that fail to pay arbitration awards within 30 days to face steep penalties. It would also require more reporting on insurers’ payment practices.
Has Congress agreed on a fix?
No agreement is reported. The competing bills have drawn different responses from physician groups and consumer advocates, and the timing and outcome of further congressional action are unclear.
Source: rss
