No Surprises Act IDR process costs $5B in fees, extra payments

Breaking down the $5 billion

Tallying both the administrative and payment costs, the IDR process incurs billions of dollars annually to resolve payment disputes under the No Surprises Act, including for air ambulance cases.

The IDR administrative costs include two fees for each dispute: an administrative fee and an IDR entity fee. The administrative fee started at $50 and recently rose to $115 per dispute. Meanwhile, the IDR entity fee, which plans and providers must pay to fund the independent organizations that arbitrate the disputes, ranges from $200 to $840 for single disputes and $268 to $1,173 for batched disputes.

In 2023 and 2024, the analysis found that the IDR process collected $218 million in administrative fees, as well as an additional $10 million for air ambulance disputes. Plans and providers also paid $636 million in IDR entity fees, with another $20 million paid for air ambulance disputes.

Combined, IDR administrative costs totaled $885 million during the period.

Plans and providers also incurred internal costs to manage IDR disputes. In the original interim final rule detailing the IDR process, the government estimated internal costs for plans and providers to submit various IDR materials to be $857 per dispute. Considering IDR volume, the analysis calculated about $1.9 billion in internal costs.

Making up about half of that total $5 billion over four years were payment amounts, the analysis added.

The IDR process has often resulted in payment determination amounts significantly exceeding the original provider payments. Researchers estimated that this has caused approximately $2.24 billion in additional payments in 2023 and 2024, with nearly all cases representing additional payments made by plans to providers.

They determined the additional payments by comparing payment determination amounts to the qualifying payment amount (QPA), which has been used as a proxy for initial plan payment and in-network rates. The analysis found that the median payment determination was 327% of QPA in 2023 and 445% in 2024. However, winning payment amounts could be significantly higher, with the disputes filed by one organization demonstrating a median of 934% of the QPA.

High volumes drive IDR costs

Exponentially more disputes have been initiated under the IDR process than the government ever expected.

According to regulations, the federal government estimated the IDR process to resolve 17,333 disputes annually, with an additional 4,899 disputes from air ambulance providers. However, public data showed that over 3.3 million disputes, including air ambulance disputes, were filed from mid-2022 to May 2025.

To put the numbers in perspective, about 190,000 disputes were filed in the first nine months of the IDR process, more than ten times the number expected in the first year alone, researchers pointed out based on CMS bi-monthly volume reports.

Providers drove higher dispute volumes, using the IDR process far more than anticipated. However, the analysis noted that certain providers dominated filings in 2023 and 2024: Radiology Partners and affiliates with 28% and Team Health with 15%. Both provider organizations are backed by private equity, researchers pointed out.

Middlemen organizations, which serve as intermediaries that perform specialized administrative tasks for providers, have also increasingly participated in the IDR process over the last two years.

These providers tend to win, too. They won 85% of the line-item claims in 2024, which was up from 81% in 2023.

The problem worsens

The IDR process has gone off the tracks as volume, and therefore costs, continue to grow.

With far higher volumes than anticipated, the IDR process currently has a backlog of almost 500,000 disputes based on data from May 2025. IDR entities also rarely meet the 30-day statutory deadline for payment determinations. Instead, the median days to determination for line-item claims was 81 days by the last quarter of 2024.

Researchers said the sheer volume of disputes filed is likely the main driver of determination delays. However, legal decisions also caused pauses during the period as agencies had to review procedures.

Recent IDR process trends, as defined in the analysis, are causes for concern, researchers added.

"These trends prompt the question of whether steps should be taken to reduce IDR use and the size of the awards and what policy levers are available," they wrote. Those steps may include validating dispute eligibility early in the process, encouraging more informal negotiations outside the process and increasing transparency and consistency among IDR entities.

They warned that failing to address the trends could add to overall healthcare costs, which could be trickled down to consumers through higher premiums.

Another recent study published in the BMJ found that premium and high-burden medical spending have not yet shifted under the No Surprises Act. However, out-of-pocket spending among adults with direct purchase private insurance has significantly declined, indicating the law's success in shielding patients from surprise bills.

Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.