Providers win 85% of surprise-billing disputes, and your self-funded plan pays the difference

The law was supposed to protect your employees and, as a side effect, hold down what your plan pays for out-of-network care. Half of that worked. The balance bills that used to land in employees' mailboxes are mostly gone. The other half went the opposite direction. The federal arbitration system built to settle those bills now rules for the provider about 85% of the time, at prices that run several times the in-network rate your plan expected to pay.

If you fund your own health plan, that gap is not a carrier problem. It is your money. And almost nobody at a 20 to 500 employee company is watching where it goes, because the whole thing happens inside a government dispute process most benefits managers have never seen a report from.

What the No Surprises Act actually changed

The No Surprises Act took effect in January 2022. Before it, an employee could go to an in-network hospital, get treated by an out-of-network anesthesiologist or radiologist they never chose, and receive a bill for the balance the plan did not pay. The law banned that bill. Patients now owe only their normal in-network cost-sharing for emergency care and for out-of-network clinicians at in-network facilities.

The unpaid balance did not vanish, though. It just changed hands. Instead of the patient owing it, the provider and the plan now fight over the number. When they cannot agree in a 30-day open negotiation, either side can push the claim into federal arbitration, formally called Independent Dispute Resolution, or IDR. A private arbitrator picks one side's dollar figure. Winner takes all. That arbitration is where the cost story lives.

The number nobody at the agencies expected

When the rules were written, the Departments of Labor, Treasury and Health and Human Services estimated the system would handle about 17,000 disputes a year, plus roughly 5,000 more for air ambulances. Call it 22,000 annually. That was the plan.

The actual number for 2024 was more than 1.46 million disputes, according to the Congressional Research Service analysis of CMS data. Between mid-2022 and May 2025, providers and plans filed over 3.3 million. That is not a rounding error. Real-world volume ran close to 90 times what the government modeled. A process designed for a trickle of genuinely hard cases became a firehose, and a handful of large physician staffing and radiology groups, many backed by private equity, drive a big share of the filings.

Providers win, and they win well above the benchmark

Volume alone would not matter if plans were winning. They are not. CMS data compiled by Georgetown's Center on Health Insurance Reforms shows providers prevailed in 88% of resolved disputes in the first quarter of 2024 and 83% in the second. Across the year, providers won about 85% of the time.

The winning offers are the part that should get your attention. Arbitration compares each side's number against the Qualifying Payment Amount, or QPA, which is essentially the plan's median in-network rate for that service in that region. In the first half of 2024, the median provider offer that won ran 383% to 447% of the QPA. Here is how that broke down by specialty, all figures as a share of the in-network benchmark.

Specialty	Median winning offer (share of QPA)
Emergency services	257%
Radiology	600%
Neurology	~1,200%
Surgery	~1,700%

Read that table again. When a radiology group takes an out-of-network claim to arbitration and wins, the plan pays roughly six times its own in-network rate for the same read. For some surgical and neurology claims, the multiple is far higher.

How a court ruling flipped the math

This was not how the law was supposed to work. The original rule told arbitrators to treat the QPA as the presumptive right answer and to depart from it only with strong evidence. That would have anchored awards near the in-network rate.

Then the Texas Medical Association sued. In a series of rulings starting in 2022, federal courts in Texas vacated the parts of the rule that gave the QPA that special weight. Arbitrators now weigh the QPA as just one factor among several, alongside the provider's training, the complexity of the case, and prior contracted rates the provider submits. Once the thumb came off the scale, awards drifted up and kept climbing. The 85% above-QPA win rate is the direct downstream result of those decisions, not an accident of the market.

Why this lands on you and not your carrier

On a fully-insured plan, an arbitration award above the QPA is the carrier's problem. They priced for it, they eat the variance, and they claw it back at your next renewal in a way you can barely see. On a self-funded plan, there is no buffer. Your plan assets pay the award the day it is determined. Every dollar an arbitrator hands a provider above what you expected to pay comes straight out of your claims fund.

That is the quiet mechanism. Self-funding gives you control and savings in most years, and it also hands you the full, undiluted cost of a system tilted toward providers. Stop-loss can catch a single catastrophic case, but IDR losses are usually mid-size, frequent, and scattered across the year, which means most of them sit below your specific deductible and never trigger reimbursement. You just absorb them. If you want the wider picture on how a small share of claims moves a self-funded budget, our breakdown of high-cost claimants covers the pattern.

What this looks like in dollars at mid-market scale

Make it concrete. Say an employee has an emergency visit and the out-of-network ER physician's QPA, the in-network benchmark, is $1,500. The physician group disputes it and wins at the emergency median of 257%. Your plan pays about $3,855. The gap you absorb on that one claim is roughly $2,355.

Now stack the services where out-of-network billing is common and the patient has no say in who treats them:

• Emergency physicians at a median of about 2.6 times the in-network rate when they win.
• Radiologists reading scans at roughly 6 times.
• Anesthesiologists and pathologists, the classic providers a patient never picks, often billed out of network at in-network facilities.
• Neonatology and other hospital-based specialties that follow the same arbitration path.

None of these is a million-dollar event. Each is a few thousand dollars over what you budgeted, several times a year, on a plan of a few hundred people. That is why it hides. It never shows up as the scary claim on the stop-loss report. It shows up as a claims fund that runs a few points hotter than your trend projection, year after year, with no obvious villain.

The five billion dollars the process itself burns

The awards are only part of the bill. Running the arbitration machine costs real money too, and plans pay for a lot of it. Each party pays an administrative fee, raised from $50 to $115 per dispute in 2024. On top of that sits the arbitrator's own fee, which runs $200 to $840 for a single dispute and up to $1,173 for a batched one. Multiply that by 1.46 million disputes.

Georgetown researchers estimate the IDR process generated at least $5 billion in total costs through the end of 2024, including about $885 million in required fees, $1.9 billion in the plans' and providers' own administrative time, and $2.24 billion in extra payments awarded above the QPA in 2023 and 2024 alone. Their read is blunt: those costs will show up in higher premiums and, over time, in higher network-negotiated rates as providers point to their arbitration wins at the contracting table. You can already see the trend line they feed. KFF's 2025 Employer Health Benefits Survey puts the average family premium at $26,993, up 6% in a single year and 26% over five years. Arbitration awards running several times the in-network rate are one of the currents pushing that number, and on a self-funded plan you feel it without the premium wrapper to soften it.

What a mid-market employer can actually do

You cannot change the arbitration rules. You can change how much of your spend ever reaches them. The whole IDR mechanism only fires on out-of-network claims, so the levers are about keeping care in network and holding your benchmark honest.

Fix network adequacy for the specialties patients cannot choose

The claims that feed IDR cluster in a short list of hospital-based specialties: emergency medicine, anesthesia, radiology, pathology, neonatology. Ask your carrier or TPA a direct question. At the hospitals your employees actually use, are the ER physicians, anesthesiologists and radiologists in network, or only the building? A facility can be in network while every clinician inside it bills out of network. Steering enrollees toward facilities with in-network ancillary staff removes the claim from the arbitration path entirely. Our guide to network adequacy for mid-market plans walks through the questions to ask.

Make your TPA prove the QPA is calculated right

The QPA is the anchor for every dispute, and your TPA or network vendor calculates it. A QPA built on a thin or stale set of contracted rates is easy for a provider to beat in arbitration. A well-documented QPA, based on a deep pool of regional in-network rates trended properly, holds up. Ask your administrator how they compute it and how often they defend it. If they cannot explain the method, that is your finding.

Pull your own IDR data

Most self-funded employers have never asked. Request a report from your TPA showing how many of your claims went to IDR, how many you won and lost, and the average award as a share of QPA. That single report tells you whether this is a rounding error on your plan or a live leak. You already ask your third-party administrator for claims reporting. Add this to the list.

Weigh where reference-based pricing fits

Some employers respond to provider pricing power by moving away from traditional networks entirely and paying a set multiple of Medicare instead. That approach interacts with the No Surprises Act differently and is not a fit for every group, but it is worth modeling if out-of-network exposure is a recurring theme in your data. Our overview of reference-based pricing lays out the trade-offs.

The bottom line

The No Surprises Act did what it promised for patients. It did the reverse for the plans that pay the bills. A protection law became, through a courtroom detour and a flood of disputes nobody sized correctly, a steady upward push on out-of-network costs, and self-funded employers sit at the bottom of the funnel with no carrier to absorb it. The fix is not dramatic. It is knowing your out-of-network exposure by specialty, confirming your benchmark is defensible, and asking for a report you are entitled to and have never seen. The employers who treat this as a real line item will keep their trend honest. The ones who assume the law is working in their favor will keep paying six times the rate and calling it medical inflation.

Frequently asked questions

Does the No Surprises Act save employers money?

It saves employees from balance bills, but it has not lowered out-of-network costs for plans. The arbitration process that replaced balance billing rules for providers about 85% of the time, at a median of roughly four times the in-network rate. For a self-funded employer, those awards come straight out of the claims fund, so the law can raise plan costs rather than cut them.

What is the QPA in surprise billing arbitration?

The Qualifying Payment Amount is the plan's median contracted (in-network) rate for a given service in a geographic region, based on rates as of 2019 and trended forward by inflation. It is the benchmark an arbitrator compares each side's offer against. In 2024, winning provider offers ran a median of 383% to 447% of the QPA, meaning plans routinely paid several times their own in-network rate.

Who pays the arbitration award on a self-funded plan?

The plan does, directly from its assets, usually as soon as the determination is made. There is no carrier to absorb the variance the way there is on a fully-insured plan. Most IDR losses are mid-size and fall below the stop-loss deductible, so they are not reimbursed. The self-funded employer absorbs them as part of ordinary claims spend.

How can an employer reduce No Surprises Act arbitration costs?

The process only triggers on out-of-network claims, so the goal is to keep care in network. Confirm that ER physicians, anesthesiologists, radiologists and pathologists at the hospitals your employees use are in network, not just the facility. Make your TPA document how it calculates the QPA. Request your plan's IDR win/loss data. Reference-based pricing is worth modeling for groups with heavy out-of-network exposure.

Why do providers win most surprise billing disputes?

Courts sided with providers in litigation brought by the Texas Medical Association, striking down the rule that told arbitrators to treat the QPA as the presumptive right answer. Arbitrators now weigh the QPA as one factor among several, alongside provider training and case complexity. With that change, award amounts climbed well above the in-network benchmark, and the provider win rate settled around 85%.

Are surprise billing disputes a big enough cost to matter for a mid-market plan?

Individually the claims are small, a few thousand dollars over the expected rate. The problem is frequency. On a plan of a few hundred employees, out-of-network emergency, radiology and anesthesia claims recur throughout the year, and each arbitration loss adds a few points to your effective trend. It rarely shows up as one alarming claim, which is exactly why it goes unmanaged.