August 27, 2026

Reforming the No Surprises Act’s IDR Process: Policy Options to Improve Incentives and Outcomes

Katherine Hall

Katherine Hall is a Research Assistant at Paragon Health Institute. Before joining Paragon, Katherine worked on supply-side health policy as an intern at the Niskanen Center. She also completed a fellowship with the Health Reformers Academy, where she studied market-based approaches to healthcare reform.

Jackson Hammond

Senior Policy Analyst

Jackson Hammond is a Senior Policy Analyst at Paragon Health Institute. He has been active in the federal and state health policy space since 2017.

Prior to joining Paragon, Jackson was a health care policy analyst for American Action Forum (AAF). While at AAF, his work focused on payer issues including private insurance, Medicare, and Medicare Advantage. Furthermore, Jackson wrote extensively about the 340B Program and contributed to AAF’s research on a variety of drug pricing issues.

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Key Takeaways

The No Surprises Act (NSA) has protected patients from surprise bills, but its Independent Dispute Resolution (IDR) process has produced negative unintended consequences:

Dispute volume is far higher than expected and increasing dramatically. IDR disputes in 2025 were 115 times the government’s initial projections.
Providers win the vast majority of cases, and their win rate is increasing. In 2025, providers prevailed over insurers in approximately 85 percent of disputed line items.
Arbitration awards are much higher than expected and growing. The median award in 2025 was nearly 4 times the qualifying payment amount (QPA) and 5 times the Medicare rate for the same service. Awards at the 90th percentile reached nearly 18 times the QPA in 2025.

These outcomes create incentives to use arbitration rather than negotiate network contracts—with Americans absorbing the costs through higher premiums and lower wages.

Recommendations

Congress should pursue a two-track framework that distinguishes between situations where patients have meaningful choices and situations where they do not:

Elective Services: Eliminate the federal IDR process. Instead, require up-front pricing with meaningful advance notice and affirmative patient consent.

Expected charges must be disclosed through an Advanced Explanation of Benefits (AEOB)—a requirement not yet implemented.

Emergency Services: Either eliminate the IDR process, or retain it only for emergency services and implement the following fixes:

Change the definition of the QPA to the most up-to-date median in-network rates, not merely adjusting the 2019 median in-network rates for inflation.
Place a reasonable limit on awards through a system that approximates pre-NSA out-of-network payments, which could take the form of an upper limit on payments set at a given percentile of a plan’s in-network rates for a specific service.
Stronger enforcement of prompt pay requirements. Create monetary penalties for insurers who fail to pay out awards within the required 30 days of a settled dispute.
Require transparency of arbitrators’ decisions, audit arbitration firms for outlier outcomes and accuracy of eligibility determinations, implement consequences for negligence, improve arbitrator training, strengthen conflict of interest rules, assign disputes through a randomized allocation process, and restore the $115 administrative filing fee.

This framework would improve incentives and lead to more appropriate payments while preserving important patient protections.