The No Surprises Act created a dispute resolution system so backlogged that 500,000 cases remain unresolved, costing $5 billion to operate while providers win 88% of disputes at median payouts 459% above insurer rates

The No Surprises Act's Independent Dispute Resolution (IDR) process was designed to settle payment disputes between out-of-network providers and insurers without involving patients. From mid-2022 to May 2025, 3.3 million disputes were filed. As of May 2025, 500,000 remained unresolved. In the first half of 2025, providers and insurers submitted nearly 1.2 million new cases — a 40% increase over the prior six months. The total cost of the IDR process has exceeded $5 billion. This matters because the system was supposed to protect patients by taking them out of the middle of billing disputes. Instead, it has created a parallel economy. Providers win 88% of IDR disputes, and the median payment determination is 459% above the qualifying payment amount (the insurer's calculated median in-network rate). This means the arbitration system is systematically awarding payments far above what insurers would have paid in-network, which raises overall healthcare costs that are ultimately passed back to patients through higher premiums. A few provider groups have filed tens of thousands of disputes each, treating IDR as a revenue optimization strategy rather than a last-resort dispute mechanism. Twenty percent of disputes submitted in early 2025 were ineligible — filed late, missing information, or otherwise invalid — further clogging the system. This problem persists because the IDR process was designed with a 'baseball-style' arbitration model where the arbiter picks one side's number, but Congress prohibited arbiters from considering Medicare rates as a primary factor, which tilts outcomes toward provider-submitted charges. The $50 per-dispute administrative fee (raised from the initial $50 but still nominal relative to the amounts at stake) makes it cheap to file speculative disputes. There is no penalty for filing ineligible disputes, no penalty for losing, and the per-case cost to the federal government of processing each dispute far exceeds the administrative fees collected. The system incentivizes volume over merit, and the backlog means legitimate disputes take months to resolve while the costs are socialized across all insurance purchasers.