No Surprises Act Arbitration Added $8.39B in 2025 Plan Obligations

Arbitration awards under the No Surprises Act’s federal independent dispute resolution (IDR) process represented an estimated $8.39 billion in additional payment obligations for health plans for disputes closed in 2025, according to new research from the Employee Benefit Research Institute (EBRI).¹ The figure equals roughly 63 cents for every $100 in employment-based health plan costs. That is about 0.625% of the estimated $1.34 trillion spent annually on employer coverage, including premiums and equivalent costs for self-insured plans.

The No Surprises Act, enacted in 2020, generally protects patients from surprise out-of-network bills, with patients paying in-network cost sharing for covered services. Plans and providers resolve any remaining payment dispute between themselves. If open negotiation fails, either side can start the IDR process, in which each submits an offer and a certified IDR entity chooses one.

New Data Allow Direct Measurement

Starting in the third quarter of 2025, CMS added initial plan payments and patient cost sharing to its IDR public use files. With that information, EBRI could calculate the IDR uplift: the winning award minus the plan’s initial payment and the patient’s cost sharing. EBRI calculated part of the total directly from the new CMS data. For the earlier period, before those fields existed, it estimated the rest using the qualifying payment amount (QPA), which is roughly the median in-network rate.

“These new data provide a clearer picture of what health plans owe for out-of-network services beyond their initial payments, after accounting for patient cost sharing,” Paul Fronstin, PhD, director of health benefits research at EBRI, said in the announcement.²

EBRI excluded 27 line items that were above $1 million or below –$1 million. Together they accounted for close to $2 billion in reported spending. In sensitivity tests using $500,000 and $100,000 cutoffs, the estimate was $8.38 billion and $8.02 billion, respectively.² CMS reported about 2.56 million IDR disputes initiated in 2025. Federal agencies had originally projected roughly 22,000 cases a year. Providers, facilities, and air ambulance services prevailed in about 88% of payment determinations in the first half of 2025 and 85% in the second half, including default decisions when one party didn’t submit an offer.

Limits of the Estimate

EBRI cautioned that the figure does not show how much the law has changed premiums, though Fronstin described the likely effect on premiums as “a small impact.”³ He added that the trend toward more awards could push that share toward or above 1% of employer plan costs. The estimate assumes every award is paid in full, which CMS data can’t confirm. Fronstin noted that some outside data suggest a meaningful volume of awards go unpaid, and in that case actual obligations would be lower. The analysis also leaves out claims resolved outside arbitration, which make up most disputes, as well as administrative costs.¹ Providers have pushed back on criticism of IDR. They argue the underlying problem is plans setting low QPAs during initial negotiations.²

Additionally, a Health Affairs Forefront analysis estimated total IDR system costs at $22.4 billion from 2022 to 2025, including $16.6 billion in 2025 alone.⁴ That analysis measures awards against the QPA rather than against initial payments, and it counts administrative costs and fees.^1,4 The authors noted that provider groups have criticized the QPA as an underestimate of in-network rates.⁴

References

1. Fronstin P. The Federal Independent Dispute Resolution Process and Employment-Based Health Plan Costs. EBRI Issue Brief No. 669. November 12, 2026. Accessed November 13, 2026.
2. Minemyer P. No Surprises Act IDR claims cost employer plans an additional $8.4B last year, study finds. Fierce Healthcare. November 12, 2026. Accessed November 13, 2026. https://www.fiercehealthcare.com/payers/no-surprises-act-idr-claims-cost-employer-plans-additional-84b-last-year-study-finds
3. Randall S. No Surprises Act IDR process adds $8.39bn to health plan costs. Insurance Business. November 12, 2026. Accessed November 13, 2026. https://www.insurancebusinessmag.com/us/news/benefits/no-surprises-act-idr-process-adds-8-39bn-to-health-plan-costs-597072.aspx
4. Hoadley J, Watts K. Spending on IDR process pushes No Surprises Act costs to more than $22.4 billion over just four years. Health Affairs Forefront. August 26, 2026. Accessed November 13, 2026. doi:10.1377/forefront.20260821.888041