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Congressional Budget Office Calls for New Study on No Surprises Act After Rising Dispute Costs
The Congressional Budget Office (CBO) has urged lawmakers to commission fresh research on the No Surprises Act, citing evidence that the law may be contributing to higher overall health‑care spending. The request follows a 2021 CBO estimate that the act would lower insurers’ reimbursements to providers, reduce monthly premiums, and cut national health‑care costs.
The No Surprises Act, enacted in 2020 and fully implemented in 2022, was designed to protect patients from unexpected out‑of‑network medical bills. It created an Independent Dispute Resolution (IDR) process in which a provider and an insurer submit proposed payment amounts for a service, and a government‑certified arbiter selects one of the two amounts. The law also aimed to encourage providers to join insurers’ networks by limiting the financial leverage they could exercise.
Recent data, however, suggest that the IDR mechanism may be working in favor of providers. According to the CBO, hospitals, medical groups and other providers win more than eight in ten disputes over out‑of‑network bills and receive payouts that are often three to four times higher than comparable in‑network rates. In the first half of 2025 alone, providers filed 1.2 million disputes, a sharp increase from the 17,000 cases the government expected annually when the law was enacted.
The agency notes that while fewer than 0.05 % of claims enter arbitration, the high win rate—88 % for providers—could influence broader market dynamics. “If providers can systematically secure large payments through the IDR process, they have an incentive to remain out of network or demand higher in‑network rates,” the CBO wrote. The agency warned that such incentives could drive up negotiated prices, raise commercial insurance premiums, and ultimately increase federal deficits.
Insurer groups have seized on the CBO’s findings to argue that the IDR process needs reform. Chris Bond, a spokesperson for the Association of Health Insurance Plans (AHIP), said in a statement that “provider‑driven abuse of the No Surprises Act is adding billions in wasteful spending and raising healthcare costs for everyone.” Bond added that policy action is required to address “flawed incentives in the Independent Dispute Resolution process and protect consumers from unconscionable price gouging by some private‑equity‑backed providers and IDR middlemen.”
The CBO’s call for updated research comes after the federal government finalized new regulations aimed at improving IDR, including measures to prevent ineligible disputes from entering the system. Payers, however, contend that the rule does not go far enough to curb provider gaming.
Congressional interest in the issue has been limited, but the CBO’s recommendation signals that the problem has not been fully addressed. The agency’s analysis suggests that the No Surprises Act, intended as a deficit‑reducer, may be having the opposite effect.
The current situation remains unresolved. The CBO’s request for further study is pending, and no new legislation has been introduced to modify the IDR framework. Insurers, providers, and advocacy groups continue to debate the balance between protecting patients from surprise bills and preventing excessive payouts that could inflate overall health‑care costs.
In the coming months, lawmakers will likely review the CBO’s findings and consider whether additional regulatory or legislative action is warranted. The outcome of that review will determine whether the No Surprises Act’s intended savings can be realized without unintended cost increases.
The No Surprises Act, enacted in 2020 and fully implemented in 2022, was designed to protect patients from unexpected out‑of‑network medical bills. It created an Independent Dispute Resolution (IDR) process in which a provider and an insurer submit proposed payment amounts for a service, and a government‑certified arbiter selects one of the two amounts. The law also aimed to encourage providers to join insurers’ networks by limiting the financial leverage they could exercise.
Recent data, however, suggest that the IDR mechanism may be working in favor of providers. According to the CBO, hospitals, medical groups and other providers win more than eight in ten disputes over out‑of‑network bills and receive payouts that are often three to four times higher than comparable in‑network rates. In the first half of 2025 alone, providers filed 1.2 million disputes, a sharp increase from the 17,000 cases the government expected annually when the law was enacted.
The agency notes that while fewer than 0.05 % of claims enter arbitration, the high win rate—88 % for providers—could influence broader market dynamics. “If providers can systematically secure large payments through the IDR process, they have an incentive to remain out of network or demand higher in‑network rates,” the CBO wrote. The agency warned that such incentives could drive up negotiated prices, raise commercial insurance premiums, and ultimately increase federal deficits.
Insurer groups have seized on the CBO’s findings to argue that the IDR process needs reform. Chris Bond, a spokesperson for the Association of Health Insurance Plans (AHIP), said in a statement that “provider‑driven abuse of the No Surprises Act is adding billions in wasteful spending and raising healthcare costs for everyone.” Bond added that policy action is required to address “flawed incentives in the Independent Dispute Resolution process and protect consumers from unconscionable price gouging by some private‑equity‑backed providers and IDR middlemen.”
The CBO’s call for updated research comes after the federal government finalized new regulations aimed at improving IDR, including measures to prevent ineligible disputes from entering the system. Payers, however, contend that the rule does not go far enough to curb provider gaming.
Congressional interest in the issue has been limited, but the CBO’s recommendation signals that the problem has not been fully addressed. The agency’s analysis suggests that the No Surprises Act, intended as a deficit‑reducer, may be having the opposite effect.
The current situation remains unresolved. The CBO’s request for further study is pending, and no new legislation has been introduced to modify the IDR framework. Insurers, providers, and advocacy groups continue to debate the balance between protecting patients from surprise bills and preventing excessive payouts that could inflate overall health‑care costs.
In the coming months, lawmakers will likely review the CBO’s findings and consider whether additional regulatory or legislative action is warranted. The outcome of that review will determine whether the No Surprises Act’s intended savings can be realized without unintended cost increases.
