As a nurse, a Member of Congress, Chair of the Health sub-committee on the Veterans’ Affairs Committee, and as a consumer safety advocate, much of my life has been devoted to fighting for Americans to have affordable, transparent, quality healthcare.
The No Surprises Act (NSA) was an important step forward in that effort. It was intended to protect patients from being blindsided by surprise medical bills from providers. But a loophole in its implementation is undermining the benefits it was meant to deliver, as healthcare providers continue to exploit the system.
Picture a family taking their child to the hospital for a scheduled procedure. They do everything right, making sure they go to an in-network hospital. But a month later, they receive a bill for thousands of dollars from an out-of-network provider that the hospital contracts with.
These bills happen when someone went to an in-network hospital, reasonably assuming that every one of their providers would also be in-network only to find out later that someone involved in their care, such as an anesthesiologist, an orthopedic surgeon, or a neurologist, was not in their insurance network.
The NSA aimed to protect patients from receiving these surprise medical bills. One of the ways it sought to accomplish this was by establishing a baseball-style arbitration system, or the Independent Dispute Resolution (IDR) process, to settle payment disagreements between insurers and providers.
When an out-of-network provider and an insurance plan can’t agree on the reimbursement rate for a covered service, each side submits a final offer, and an independent arbitrator picks one. Importantly, this behind-the-scenes process was meant to keep patients out of complex billing disputes and ensure fair outcomes. Decisions were supposed to be based on the market average for a given medical service or device. But, in many cases, the opposite has happened.
Some providers have figured out how to exploit IDR for their own gain. Certain providers file huge numbers of IDR cases for non-emergent procedures performed at in-network hospitals. The Department of Health and Human Services initially projected they would process 22,000 disputes annually. Instead, they have been swamped exponentially, buried by 1.1 million claims per year.
Not only that, when decisions are eventually rendered in those disputes, providers have overwhelmingly benefitted. For 2024, the average amount awarded when providers won cases was nearly 450% of the median in-network payment rate for a service. In some cases, it was even more. No wonder providers initiated at least 85% of disputes.
And most of these disputes don’t even stem from surprise medical situations but planned surgeries in markets where in-network options already exist. This practice turns a law meant to protect patients into a tool for increasing revenue.
These inflated payments do not disappear. Health insurers and employers faced with rising costs from these settlements have to raise premiums for everyone. The result is that the financial burden is shifted to employers, small businesses, and the millions of working Americans with insurance.
The incentive shift is also weakening insurance networks. Because arbitrators often award more than standard in-network payments, some hospitals and physician groups choose to stay out of network, finding it more profitable. This reduces their motivation to negotiate in-network contracts. Fewer in-network provider choices and more reliance on arbitration drive up costs, and those costs ultimately flow back to consumers.
Right now, these practices are happening in the shadows of the NSA’s good intentions. Bringing them into the light is step one.
But aligning incentives with what’s best for patients is the only way to ensure the No Surprises Act is sustainable for the long term.
Patients who choose in-network hospitals should have in-network care teams whenever possible. Facilities that allow contracted providers to exploit the IDR process should not benefit financially. When in-network options are available and not used, reimbursement should be adjusted, and other contractual tools, including possible termination, should be used to keep networks strong and effective.
The goal is to protect affordability for American employers and families by directing care to participating providers where clear in-network options exist. This is not about restricting patient access. It’s about closing a loophole that is driving unnecessary costs.
Healthcare should provide certainty, not anxiety. Every family deserves to know that a trip to the hospital will not lead to financial hardship. The loophole in the No Surprises Act threatens this basic promise. There really should be no surprises. Not in the hospital bill, and not in rising premiums.
Regulators and lawmakers must act now to make sure the law lives up to its purpose, so no American faces surprise costs in our healthcare system.
Ann Marie Buerkle is a former nurse and congresswoman who served as the Commissioner and Acting Chairwoman of the Consumer Product Safety Commission.
