Editor’s note: This perspective was originally published Health Affairs Forefront on Sept. 22, 2026.
The No Surprises Act (NSA) successfully protects patients from surprise medical bills, specifically for out-of-network emergency services, air ambulance transportation, and services such as anesthesia, radiology, and pathology delivered by out-of-network clinicians at in-network facilities. But since its implementation in 2022, the law has generated a massive donnybrook between insurers and health care providers that is clogging the federal independent dispute resolution (IDR) process. By the end of 2025, the cumulative volume of filed IDR claims grew to approximately five million, nearly 14 times the expected amount.
Reforms are needed to keep the NSA working as intended, as both the administration and lawmakers acknowledge. To that end, some valuable lessons can be learned from the sophisticated, confidential commercial arbitration venues and litigation that insurers and providers have relied upon to resolve payment disputes long before the federal IDR existed—and which they still rely upon for disputes that are outside the purview of the NSA.
As noted, the federal IDR process created by the NSA applies only to certain out-of-network claims involving certain commercial coverage, including employer-sponsored plans; it generally does not apply to Medicare Advantage or Medicaid managed care. Disputes involving services, issues, and insurance types outside the scope of the NSA can and still do proceed through litigation or private, commercial arbitration when permitted by the parties’ contracts.
Judge And Jury In The Public Spotlight
Civil litigation, often in a courtroom before a jury, can typically adjudicate large sums, make news headlines, and set precedents for future disputes—high stakes for the parties involved. For example, in 2021, TeamHealth versus UnitedHealthcare litigation in Nevada resulted in an award of tens of millions of dollars to health care providers for out-of-network services.
But a jury trial generates a public record of the dispute. Internal company documents and sensitive patient information can become known. To retain confidentiality, both insurers and providers have resorted to arbitration.
Confidential Arbitrations Most People Never See
The contracts that insurers present to providers who want to join their network typically call for disputes to be arbitrated under the aegis of the American Arbitration Association (AAA), JAMS (formerly known as Judicial Arbitration and Mediation Services), the American Health Law Association (AHLA), or a regional arbitration administrator with a roster of health care experts. These venues handle complex cases that can span years and thousands of claims. Arbitrators are often chosen for their expertise and have backgrounds as lawyers and judges, and the proceedings can include expert witnesses and multiday hearings with attorneys representing each party. While these proceedings are costly, they create economies of scale as millions, even billions, of dollars are typically disputed in a single case. The arbitrator or panel of three arbitrators can take several weeks or months to make a thoughtful, binding decision about how much money, if any, should be paid for the disputed services.
The NSA has not diminished the use of commercial arbitration. The AAA reports that the number of health care cases filed increased from 618 in 2021 to 1,047 in 2025, and the average amount disputed in 2025 cases was approximately $4 million. In total, the AAA was the venue for $4 billion in disputed payments in 2025 alone. JAMS and AHLA have also experienced steady growth in insurer-provider disputes since NSA arbitration began, according to leadership of those organizations.
Privacy comes at a price. Arbitration services collect thousands of dollars in administrative fees, and sought-after arbitrators charge hourly rates comparable to those of partners in major law firms. For larger cases, parties often prefer to have a panel of three arbitrators, not just one. Forum costs, arbitrator(s) plus administrator, can be well into six figures. This is in addition to legal fees, which can be much higher. Both sides prefer to control costs by settling, and most of the time, they succeed. Hearings and awards are the rare exception, not the norm.
Commercial arbitration awards remain private unless challenged in court. But the parties receive a detailed explanation, many pages long, from a sophisticated arbitrator or panel. This provides valuable feedback to both parties.
Federal IDR Was Built Differently
The federal IDR process under the NSA was designed for speed and accessibility; it does not replicate the procedural depth of commercial arbitration. The regulations set tight timelines, rely on written submissions, limit discovery, and avoid live hearings. These choices have the potential to allow smaller medical practices to participate without massive legal teams, but they also limit the depth of the record.
Transparency is a crucial difference between legacy arbitration and the federal IDR. While the scale and outcomes of private arbitration remain largely invisible, IDR publishes data that the public and researchers can access. That contrast—plus the fact that a single commercial arbitration may involve tens of thousands of claims—can make the IDR dispute volume appear unprecedented, even though it’s one visible indication of long-standing tensions, litigation, and arbitration between insurers and providers.
The federal IDR system also constrains the arbitrator to choosing one of the two offers put forth, an approach called baseball-style arbitration. In this framework, the arbitrator is presented with a low offer from an insurer and a high offer from a health care provider and must choose either offer as the final binding amount. Unlike a jury or arbitrator in AAA, JAMS, and AHLA, the federal IDR arbitrators cannot determine a final monetary award of whatever magnitude they deem most appropriate.
The theory behind baseball-style arbitration for health care payment disputes was that the risk of having an extreme offer rejected would push both parties toward reasonable amounts, and perhaps encourage them to settle before arbitration was necessary. But the hoped-for convergence has not materialized. Analyses of IDR outcomes found that providers prevailed in 85 percent of decided claims in 2024, with their median prevailing offer rising from 327 percent of a benchmark known as the qualifying payment amount (QPA) in 2023 to 445 percent in 2024. Meanwhile, insurers’ median prevailing offers remained steadier, at 100 percent of the QPA in 2023 and 110 percent in 2024. The IDR process is not drawing the parties together or moving arbitrators toward a consensus on reasonable payment amounts. Instead, the gap between offers is growing.
These Venues For Disputes Exist In Parallel
Insurers and health care providers continue to take disputes to the courts, to confidential arbitration, and to the federal IDR established under the NSA. The choice of venue is dependent on the types of claims in question, the relationship between parties, and their preferences. There are many situations in which disputed claims are not eligible for federal IDR, or existing contractual relationships between the parties lead them to dispute through legacy arbitration venues, even when federal IDR is an option.
Considerations For The Future Of Federal IDR
Several strengths of the legacy commercial arbitration and litigation systems could inform improvements to the federal IDR process:
- There is efficiency in scale. Commercial arbitration and litigation cases are far more expensive to pursue, but they often resolve thousands or tens of thousands of claims at once.
- Quality of information and skill of decider matter. The commercial arbitration process is more rigorous, with extensive discovery and in-person hearings that last for days. The individual decision makers are known and agreed to by the parties and are experienced as judges and health care litigators. In contrast, IDR entities are certified at the organization level, such that the identities and qualifications of individual IDR arbitrators are unknown to the disputing parties and public.
- Limiting the outcome to two value options seems to have incentivized more divergent offers from providers and payers, rather than more tempered, converging offers. In commercial arbitration and litigation, the outcome is whatever value a neutral decider deems fair, not a number that may be only somewhat less fair than the alternative.
- The perceived fairness of the venue is critical. Competitive pressures among venues keep commercial arbitration in line. Administrators must maintain the confidence of both insurers and providers. The government needs metrics for defining what fairness means and for measuring whether federal IDR awards meet this definition.
Incorporating some valuable features of commercial arbitration—greater aggregation, more developed records, experienced decision makers, and flexibility in determining awards—could help preserve the No Surprises Act’s patient protections while making payment disputes more efficient, consistent, and fair in federal IDR.
Authors’ Note
Erin Duffy receives grant funding from the California Health Care Foundation and Arnold Ventures. She has also received personal fees from Cornerstone Research as a litigation expert on matters in the hospital and health insurance sectors. Geoff Drucker is currently self-employed as a dispute resolution professional through Geoff Drucker, LLC.
Duffy, E. and Drucker, G. “Beyond The No Surprises Act: The Longstanding Health Care Payment Dispute Resolution Ecosystem,” Health Affairs Forefront, September 22, 2026, 10.1377/forefront.20260915.527944.
Copyright © 2026 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc.
