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Lawmakers are considering changes to the No Surprises Act after its independent dispute resolution system produced far more cases than expected and prompted disputes over payment enforcement. Proposals include replacing arbitration with a benchmark payment amount or penalizing insurers that do not pay awards on time; no solution has been settled.
Congress is weighing competing proposals to change the No Surprises Act’s payment dispute system, after arbitration cases exceeded early estimates and providers and insurers disagreed over how awards are determined and enforced. The proposals include replacing arbitration with a payment benchmark and imposing penalties on insurers that fail to pay awards on time. Lawmakers have not agreed on a change.
The law, enacted in late 2020, protects patients from many unexpected out-of-network bills when they receive care at an in-network facility, including emergency treatment. When an insurer and an out-of-network provider cannot agree on payment, they can take the dispute to independent dispute resolution (IDR), a form of arbitration.
Jack Hoadley, a professor emeritus at Georgetown University’s Center on Health Insurance Reforms, told MedPage Today that Congress expected negotiation to resolve many disagreements and arbitration to be used in relatively few cases. The law also established a qualifying payment amount (QPA), intended to approximate the median in-network rate. Hoadley said an initial federal rule treated the QPA as a default, but courts rejected that presumption and required arbitrators to consider other factors.
Hoadley said providers won about 85% of cases, a pattern he said can encourage higher payment requests. The government had estimated roughly 22,000 disputes per year; Hoadley said more than 4 million disputes entered the process in 2025. Separately, Josh Hill, a Philadelphia attorney, told MedPage Today that the law requires awards to be paid within 30 days but does not clearly provide a way to enforce payment of an award.
Payment Rules Affect Providers and Insurers
The dispute system helps determine what insurers pay out-of-network providers, while the law’s patient protections are meant to prevent patients from being caught between providers and plans. Changes could affect provider reimbursements, insurer costs, and how often payment conflicts move into arbitration.
The reported volume of cases for 2025 has prompted discussion about the system’s workload and incentives. Hoadley said the outcomes may encourage providers to seek larger amounts, while some providers say insurers are not paying awards. Proposals to change the benchmark could affect payment levels; penalties could address missed payments if Congress establishes an enforcement mechanism.
The law bars many surprise bills from being passed directly to patients. Dispute outcomes may nevertheless affect financial arrangements between health plans and providers that deliver care at in-network facilities.
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How the Arbitration System Developed
The No Surprises Act was passed at the end of 2020 to address unexpected bills for out-of-network care in situations such as emergency treatment at an in-network hospital. Under the process described in the report, an insurer and provider first negotiate; if they fail to reach agreement, either side can take the payment dispute to IDR.
The QPA was designed as a reference point tied to the median rate for comparable in-network care. According to Hoadley, court rulings altered how arbitrators could use that amount by requiring consideration of other factors rather than treating the QPA as the presumptive answer. The resulting disputes over awards and payment have also reached the courts.
Hill said two federal appeals courts have found that providers have no right to sue to collect arbitration awards, while a lower court has reached the opposite conclusion. Cases are pending in Maryland and Virginia, and further appeals could deepen the disagreement among courts.
“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
Key Disputes Remain Unresolved
Congress has not chosen between the competing approaches, and the proposals’ prospects and timing are not clear from the report. The source describes the Pallone bill as newly introduced on October 8; it would eliminate IDR and use the QPA instead. Physician groups oppose that approach, while Families USA supports it.
A separate bill, first introduced in September 2024 by Rep. Greg Murphy, would impose steep penalties when insurers miss the 30-day payment deadline and require more reporting on which insurers pay awards. The report does not specify the penalties’ proposed amounts or establish whether either measure has enough support to advance.
It also remains unclear how pending court cases will resolve the question of whether providers can sue to collect unpaid awards. Hoadley said the dispute likely requires congressional action, but the report does not identify a consensus legislative remedy.
Bills and Court Cases to Watch
Congress may consider the Pallone proposal and the Murphy bill as lawmakers debate how to reduce disputes, set payment amounts, or enforce awards. The report does not give a committee schedule, vote date, or expected timetable for action, so the next legislative steps remain uncertain.
Meanwhile, cases pending in Maryland and Virginia could add to the court dispute over providers’ ability to collect unpaid awards. If another appeals court rules on the issue, Hill said, differing appellate decisions could prompt the Supreme Court to consider the question. For now, the core issues—how arbitrators should weigh the QPA and how unpaid awards can be enforced—remain unresolved.
Key Questions
What is Congress considering changing?
Lawmakers are weighing proposals to address the No Surprises Act’s payment dispute process. One bill would replace arbitration with the qualifying payment amount; another would penalize insurers that fail to pay arbitration awards on time.
What does the No Surprises Act protect patients from?
The law protects patients from many unexpected bills for out-of-network care received at an in-network facility, including some emergency care. The payment dispute described in the report is generally between the insurer and provider.
Why is the arbitration process disputed?
Hoadley said courts rejected treating the QPA as the default amount and required arbitrators to consider other factors. He also said providers won about 85% of cases and that the volume of disputes greatly exceeded the government’s estimate.
Have lawmakers agreed on a solution?
No agreement is reported. Physician groups oppose eliminating IDR, while Families USA supports replacing it with a benchmark. The report does not establish that either bill will advance.
Can providers sue insurers over unpaid awards?
The issue is unsettled in the courts, according to attorney Josh Hill. He said two federal appeals courts found providers had no right to sue to collect awards, while a lower court ruled the other way; cases are pending in Maryland and Virginia.
Source: medpagetoday.com
