A federal arbitration process established under the No Surprises Act to resolve billing disputes between doctors and health insurers has effectively shielded patients from unexpected medical bills but appears to be driving up overall health care costs, according to a recent analysis by Georgetown University. The arbitration system, which began in 2022, has resulted in significant financial awards to medical providers, potentially leading to increased health insurance premiums for consumers.
The No Surprises Act, enacted by Congress in 2020, was designed to address complaints about large, unexpected bills from out-of-network providers treating patients at in-network hospitals, particularly in emergency situations and costly air ambulance rides. The law removes patients from the direct billing disputes by making insurers responsible for payments, while patients continue to pay standard copays, coinsurance, and deductibles under their insurance plans.
When disputes arise over payment amounts, they are settled through a baseball-style arbitration process. The arbitrator must choose either the insurer’s proposed payment or the provider’s requested amount, without splitting the difference. Since the system’s inception, doctors have prevailed in the majority of cases, securing payments substantially higher than the insurers' median contracted rates. In 2025, providers won 85% of arbitration cases and were awarded more than four times the qualifying payment amount, a benchmark based on median in-network rates.
This success has led to a sharp rise in the number of arbitration cases, which reached 2.6 million in 2025 — a 77% increase from 2024 and far exceeding the original estimate of approximately 22,000 cases per year. Coupled with a 264% jump in total payments from 2024 to 2025, the expansion and growing costs of arbitration contributed to a cumulative expense exceeding $22 billion over four years, including arbitrator fees and administrative costs.
Three main physician and middleman organizations—Radiology Partners, HaloMD, and TeamHealth—were involved in more than 75% of arbitration awards. HaloMD, which acts on behalf of providers, reported winning $2 billion in awards and having a 90% success rate. Representatives from HaloMD emphasized their role in ensuring sustainable reimbursements for more than 27,000 clinicians, while Radiology Partners and TeamHealth pointed to insurers’ low initial offers as a key reason for arbitration, and expressed support for maintaining the arbitration system to resolve disputes fairly.
Despite its consumer protections, the arbitration process has raised concerns about escalating insurance premiums. The Georgetown study referenced instances where employers and states attribute premium increases to arbitration-related costs. For example, New York state identified arbitration awards as a major factor in a nearly 10% premium hike for its 2027 state employee health plan, with over $200 million added to claims payouts. Similarly, the United Service Workers union and United Healthcare cited arbitration costs as contributing to increases of between 1.75 and 6 percent in premiums for some insured groups.
Experts warn that while arbitration has reduced surprise bills, it has not curbed overall health care spending. Jack Hoadley, a research professor at Georgetown’s Center on Health Insurance Reforms and a coauthor of the analysis, noted that arbitration costs are likely to be passed on to consumers via higher premiums, adding to growing health insurance affordability concerns. Recent surveys indicate that many Americans view rising insurance costs and out-of-pocket medical expenses as among the main challenges facing the U.S. health care system.