Payers are escalating public criticism of the No Surprises Act’s arbitration process, arguing the system is being exploited by a small number of providers as disputes and payouts climb to record levels.
Health insurance CEOs, an industry coalition and at least one insurer’s own internal policy changes have all targeted what they describe as abuse of the independent dispute resolution process this year — even as several federal courts have declined to side with insurers challenging it in litigation.
Here are seven things to know.
1. Cigna’s CEO says the IDR system is being abused. “We do support the overall strategic intent of consumer protection from surprise billing. However, we’re seeing some clear abuses of the IDR vehicle in practice,” Cigna Group President and CEO Brian Evanko said on the company’s second-quarter earnings call July 30, adding that the system is seeing “unsustainable volume levels, much of which is concentrated amongst a small number of providers.” Mr. Evanko referenced last year’s payout figure on the call but said the impact “has been manageable” within Cigna’s insurance business.
2. Arbitration payouts nearly quadrupled in a single year. A July 22 Wall Street Journal analysis of CMS data put 2025 arbitration payouts at nearly $15 billion, up from $4.08 billion in 2024, with arbitration firms collecting about $1.3 billion in fees.
3. UnitedHealthcare’s commercial CEO has called for an overhaul. UnitedHealthcare’s commercial CEO, Dan Kueter, has publicly called for an overhaul to the IDR process, saying the system is “being exploited by select providers and select geographies.”
“The IDR process is not working, certainly not as Congress intended it, and it needs to be reformed,” Mr. Kueter said July 16. He said the process is adding about 50 basis points of incremental cost trend in 2026 and now accounts for at least 100 basis points of total commercial cost at the company.
4. Dispute volume is far outpacing original projections. UnitedHealthcare told Becker’s it is now seeing roughly 100,000 IDR disputes a month. CMS originally projected about 22,000 disputes a year across the entire system, with more than 5 million disputes having now been filed since the portal launched in 2022, according to the Congressional Budget Office. Providers won 85% of the 1.15 million disputes that received payment determinations in the second half of 2025, and awards exceeded the qualifying payment amount in 87% of determinations, according to federal data. The top three initiating companies — HaloMD, Team Health and SCP Health — accounted for about 38% of all disputes during that period.
5. Elevance Health has taken a more operational approach. Over the last year, Elevance Health has adopted a policy across more than a dozen states that penalizes hospitals 10% for using out-of-network providers, describing it as a response to abuse of the IDR system. The company previously cited a 40% increase in case volume in 2025 and examples of elective procedures generating arbitration payments far above Medicare rates.
6. Federal courts have been unreceptive to insurers’ legal challenges. In recent months, some federal courts have been unreceptive to insurers’ arguments that the system is being gamed against them. On July 10, a judge dismissed with prejudice a lawsuit from Elevance’s Georgia subsidiary that accused billing company HaloMD and two physician groups of defrauding the insurer through the IDR system. Judge Thomas Thrash Jr. wrote that it was “highly plausible to infer” that the insurer “engages in a consistent practice of submitting lowball offers to out-of-network providers in an effort to maximize its profits.” Elevance said it plans to appeal.
Judges in California and Texas dismissed similar insurer suits against HaloMD in April and May, ruling that judicial review of arbitration determinations is limited. UnitedHealthcare sued Radiology Partners and its Arizona affiliate Sonoran Radiology last August, alleging the companies routed in-network claims through Sonoran to make them appear out-of-network and initiated arbitration on tens of thousands of claims.
7. Regulators and industry groups are pushing their own fixes. The Trump administration finalized changes to the process in late May that established a centralized disputes portal, created a federal payer registry and cut per-dispute administrative fees from $115 to $15. Earlier this month, the Coalition Against Surprise Medical Billing, which includes insurance trade group AHIP, launched a six-figure ad campaign opposing the No Surprises Act Enforcement Act, a bipartisan bill that would raise penalties on plans and providers that miss payment deadlines after arbitration.
8. Providers counter that lowball offers, not gaming, drive the outsized awards. Anthony Maioriello, MD, founder and owner of Comprehensive Level One Staffing in Dallas, who also runs an IDR arbitration recovery firm for providers, said at the Becker’s Spine, Orthopedic and Pain Management-Driven ASC + The Future of Spine Conference in Chicago June 11 that the arbitration awards he now sees typically run eight to 12 times insurers’ original payment offers. He argues that gap is a direct reflection of how low initial insurer offers are — not of providers gaming the system.
“Until they start offering more than $1,000 for a case or $2,000 for a case, we’re going to have these really large awards,” he said.
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