No Surprises Act's Dispute Resolution Costs Skyrocket to $22.4 Billion in 2025

The No Surprises Act (NSA), a federal law aimed at protecting patients from surprise medical bills, is facing significant financial challenges. According to a new analysis by researchers at the Center on Health Insurance Reforms (CHIR) at Georgetown University’s McCourt School of Public Policy, the total costs associated with the act's dispute resolution process reached $22.4 billion by the end of 2025. This figure includes $15.6 billion in payments to providers that exceeded in-network rates, $4.2 billion in administrative costs, and $2.7 billion in fees for independent dispute resolution (IDR) entities.

The act was designed to prevent patients from receiving balance bills for out-of-network services by establishing a two-phase process: negotiation between the provider and insurer, followed by IDR if an agreement cannot be reached. However, the data reveal that the number of disputes is far higher than anticipated, with 2.6 million initiated in 2025-a 77% increase from the previous year.

The Unexpected Surge in Disputes

The surge in disputes has raised concerns about the effectiveness and sustainability of the NSA's IDR process. Initially, federal regulators expected only about 22,000 IDR cases per year. However, the Georgetown researchers found that this number is not only much higher but also continuing to grow. In the first six months of 2026 alone, approximately 1.75 million disputes were filed, a 50% increase compared to the same period in 2025.

Jack Hoadley, Ph.D., a research professor at CHIR and one of the study's authors, noted that the federal report likely underestimates the true costs due to missing data and unreported internal administrative information. "We actually think our estimate is conservative," he said during a briefing with reporters.

The analysis also highlights that a small group of provider organizations and middlemen account for a large portion of the disputes pushed to IDR. For example, Radiology Partners, HaloMD, and another unnamed organization together accounted for nearly three-quarters of all resolved disputes in 2025.

Why It Matters

The high costs and increasing number of disputes under the NSA have significant implications for both patients and the healthcare system. While the act was intended to protect patients from surprise bills, the current IDR process may be creating new financial burdens. The administrative and operational costs associated with resolving these disputes are substantial, potentially leading to higher insurance premiums and reduced access to care.

The concentration of disputes among a few provider organizations suggests that some entities may be exploiting the system for financial gain. This raises ethical concerns and underscores the need for stronger regulatory oversight and reforms to ensure that the NSA achieves its intended goals without unintended consequences.

As the healthcare landscape continues to evolve, particularly with the integration of advanced technologies like artificial intelligence (AI), it is crucial to develop governance frameworks that can effectively manage these new challenges. According to Rick Abramson, head of digital health policy at the FDA, the agency expects to issue guidance on policies regarding generative AI devices, which could have implications for how healthcare providers and insurers navigate future disputes.

In the meantime, policymakers must address the immediate issues with the NSA's IDR process to ensure that it remains a viable and fair mechanism for resolving billing disputes. The well-being of patients and the financial health of the healthcare system depend on it.