No, the No Surprises Act Didn’t Cost $22 Billion

A recent Health Affairs analysis claims the arbitration process underlying the federal No Surprises Act (NSA) “has contributed an estimated $22.4 billion in total costs.” We work for Radiology Partners, named as the largest filer of arbitration disputes under the federal NSA. Read what follows with that in mind and then check the accounting, because the accounting is where the problem lies.

First, we share the authors’ interest in understanding healthcare spending. Dollars spent on administrative efforts like arbitration are dollars not spent on patient care. But the study measures only one side of the ledger. It counts what arbitration costs but does not consider what the law saves. Including one side without the other is misleading.

The NSA was passed to protect patients from unexpected out-of-network medical bills. The law includes a neutral arbitration process, termed independent dispute resolution (IDR), that keeps patients out of payment disputes between insurers and providers while preserving reimbursement at levels that protect patients’ access to care. The NSA’s intent is patient-centric, patient-protective, and supported by the medical community.

Patient protection, not cost containment, was the goal of the NSA, though as noted in the Health Affairs analysis, the Congressional Budget Office (CBO) did anticipate a reduction in spending. The savings the CBO projected are largely due to reductions in in-network rates. While the Government Accountability Office (GAO) documented that the rates insurers pay in-network providers have declined and an HHS report found a reduction in payments for out-of-network care (including reductions in out-of-pocket payments), the savings are not included in the Health Affairs analysis. Referencing the CBO’s projections while excluding the savings the CBO relied upon in its calculations is difficult to reconcile.

In the analysis, the largest cost component, $15.6 billion of the $22.4 billion total, is payment amounts, defined by the authors as IDR awards above the qualifying payment amount (QPA). The QPA is the median in-network rate that a health insurer paid for that service in the same region in January 2019, which is then adjusted for inflation.

The reliability of the QPA has been repeatedly questioned. It is calculated by the insurer without transparency or meaningful oversight. A separate study showed that most QPAs are below the actual median in-network rates. Recently, the Fifth Circuit, sitting en banc, vacated portions of the calculation methodology after finding that they did not align with the law, and permitted insurers to use a loophole to depress the QPA. Despite these well-documented concerns, the study treats the QPA and even 200% of the QPA as a reasonable proxy for a typical out-of-network commercial payment. That assumption is problematic, but it is not the paper’s most significant issue.

The more fundamental flaw is that the analysis ignores spending reductions from the claims that never reach IDR; these make up the vast majority of NSA claims. Drawing on health plan industry data, the authors report that 76% of claims never reach IDR, 18% are resolved through open negotiation, and only 6% go to IDR. The analysis excludes any savings from the 76% of cases where the initial payment is the only payment.

Consider an extreme hypothetical to make the point. Suppose only a single claim was submitted for IDR. Every other claim, millions of them, was accepted at the initial payment level. The paper notes that in the second half of 2025, the median initial payment was 90% of the QPA. While that would represent an enormous reduction in spending relative to what providers would otherwise be reimbursed for providing care, the paper’s methodology would register none of the savings and would in fact report an increase in spending, related to the single IDR dispute. Even if every NSA-eligible claim was paid a penny with no requests for arbitration, this analysis would still show the law saving nothing. That is not balanced accounting.

As an aside, it is worth noting that $15.6 billion is money arbitrators awarded; it is not money that changed hands. The federal data captures determinations, not payments, and physician surveys have repeatedly found that a substantial share of IDR awards are paid late, partially, or not paid at all.

The paper also highlights headline grabbing high-dollar awards, including breast reduction surgeries, with median awards over 80 times Medicare rates. While eye-catching, such surgeries also represent 0.4% of the total awards the paper identifies. Meanwhile, the Public Use Files also contain initial payments of a penny, a nickel, and nothing at all for complex medical care. Balanced, honest accounting would include both types of outliers.

This points to two distinct issues that deserve separate attention. High-dollar cases are real but rare. The far larger driver of IDR volume, as we have written, is insurer behavior, specifically, the financial rewards that flow from limiting network participation and underpaying for care. Most providers in IDR are there because they have no other recourse.

Conflating these problems produces bad policy. Interventions aimed at rare high-dollar abuses may harm the majority of providers acting responsibly, while leaving the underlying incentive structure intact, and with it, the threat to patients’ access to care the NSA was designed to prevent.

The fix for the majority of claims requires addressing those incentives directly: scrutinizing so-called “shared savings” arrangements that reward underpayment, auditing the QPA and publishing the results, and enforcing timely payment of IDR awards so that winning arbitration actually means getting paid.

We should all be concerned about healthcare affordability. A recent poll found that the share of U.S. adults able to afford quality care has fallen to a 5-year low. That is a real concern deserving of serious analysis. And serious analysis requires honest, balanced accounting.

Excluding savings is not a neutral methodological choice. It determines the result. Policymakers deserve analysis that includes the full picture. The conversation about healthcare spending is too important to rest on incomplete accounting.