No surprises, big consequences
By Jeff Kao
The No Surprises Act (NSA) has largely accomplished its primary goal of protecting patients from certain unexpected out-of-network medical bills. However, those payment disputes did not disappear. They shifted to providers and health plans.
For plan sponsors, the resulting Independent Dispute Resolution (IDR) process has become a significant and rapidly evolving claims management issue.
What are NSA claims?
The NSA generally applies to certain out-of-network emergency services, non-emergency services provided by out-of-network providers at participating facilities, and air ambulance services.
When a provider and health plan cannot agree on payment, the parties may go to federal IDR, where an independent arbitrator selects between the payment amounts proposed by the parties.
Approximately 2.6 million disputes were initiated in 2025, (Watts, n.d.) compared with roughly 22,000 annual disputes originally projected by federal regulators. By October 2026, CMS reported that the federal IDR process had received and closed more than 7 million disputes since the program began in April 2022. (CMS, n.d.)
How much money is at stake?
The dollars are increasingly significant. IDR payments to providers reached approximately $14.85 billion in 2025, up from $4.08 billion in 2024, according to reporting based on federal data. Arbitration entities collected approximately $1.3 billion in fees in 2025. (CMS)
Providers also frequently prevail. In the second half of 2025, providers, facilities and air ambulance providers prevailed in approximately 85% of payment determinations, with prevailing offers exceeding the applicable Qualifying Payment Amount (QPA) in approximately 87% of cases. (Emerson)
The results have generated scrutiny from both sides. Plans and insurers have questioned large arbitration awards, while providers have challenged how QPAs are calculated. The result is a process that is already expensive, heavily utilized and still evolving.
New rules may create new challenges
Recent regulatory changes are intended to improve the IDR process, but plan sponsors should consider how these changes affect their own administration and oversight.
Effective for disputes initiated on or after June 11, 2026, the federal administrative fee fell from $115 to $15 per party per dispute. With IDR already experiencing millions of disputes, the substantially lower filing cost may change the economics of pursuing a dispute.
Another significant change begins on or after January 1, 2027. Plans and issuers must use specified Claim Adjustment Reason Codes (CARCs) and Remittance Advice Remark Codes (RARCs) to communicate whether applicable out-of-network claims are subject to the NSA and federal IDR process. CMS says these changes are intended to improve communications and ultimately reduce the number of ineligible disputes submitted to IDR, (CMS) but will also require more oversight.
These changes may improve the system. They also make it important for plan sponsors to understand who is managing the process on their behalf and how well it is working.
Questions for plan sponsors
For most self-funded plans, much of this responsibility will fall to TPAs and other service providers. As such, Plan sponsors and administrators should know:
- How many of our claims are going through IDR, and what is it costing us?
- How often are we winning, settling or losing?
- Who validates our QPA calculations?
- Who determines whether a claim is eligible for federal IDR?
- Are our administrators prepared for the new CARC/RARC requirements?
- What reporting will we receive to monitor the process?
Rael & Letson can help plan sponsors review their current processes, identify potential gaps and evaluate the resources needed to navigate this changing environment. Contact us to discuss what these developments may mean for your plan and participants.