No Surprises, But Plenty of Abuses: How Insurers Are Pulling the Strings on the No Surprises Act

The No Surprises Act, passed with good intent, is now being twisted against patients and doctors by big health insurance companies.

When Congress passed the No Surprises Act (NSA) in 2020, it was rightly hailed as a major consumer protection victory. For decades, patients were blindsided by massive medical bills after doing everything “right” — going to an in-network hospital, only to later learn that the anesthesiologist or radiologist who treated them was not in their insurer’s network. How could a patient possibly know that many insurers often exclude hospital-based physicians from their networks, much less know how much not knowing such a crazy thing could cost them? The NSA addressed that nightmare, eliminating most balance bills and shielding families from financial ruin.

That achievement deserves to be celebrated. But today, the law’s promise is being undermined by some insurers. Just as insurers were able to defy Congressional intent and turn provisions of other major reform bills to their advantage, most notably the Medicare Modernization Act of 2003 and the Affordable Care Act of 2010 as we have reported, I am hearing from doctors increasingly that insurers are exploiting loopholes in the NSA as well.

I raised concerns early last year that the NSA could actually be backfiring on patients because of the insurers ability to game the process established by the law to settle payment disputes. There is now growing evidence that insurers have twisted the law’s rules in ways that may indeed be harming both patients and the physicians they rely on.

Insurers Are Manipulating the Benchmark

At the heart of the problem with the NSA, as federal regulators have allowed it to be implemented, is the “Qualifying Payment Amount” (QPA), the insurer-calculated median in-network rate used in payment disputes. It gets complicated and requires some historical context, so bear with me.

First, it’s important to note that over the past several years, more and more physician groups have voluntarily or involuntarily (usually the latter) left insurers’ provider networks, typically over disagreements with reimbursement. As I reported as long ago as April 2020, just as the COVID pandemic was sending millions of Americans to the hospital, UnitedHealthcare, the nation’s biggest commercial insurer, was sending notices to many emergency room doctors, radiologists and anesthesiologists that their in-network contracts would be terminated without cause if they did not accept much lower reimbursement rates—60% lower in some cases. Facing such ultimatums from UnitedHealthcare and other insurers, many hospital-based physician groups opted to drop out of insurers’ networks. Others were simply notified that they would no longer be in the “in” group.

Insurers made record profits during the pandemic and saw their stock prices reach unprecedented levels—until last year. As the pandemic waned, Americans began to seek care they had postponed, and insurers, consequently, have had to pay more claims, to Wall Street’s irritation. To meet shareholders’ relentless demands for higher profit margins and earnings per share, insurers have once again begun forcing providers out of their networks, a move that not only limits patient choice but also puts patients at risk of paying a penalty for not staying on top of insurers’ ever-changing provider networks. UnitedHealthcare executives told investors earlier this year that they planned to further “narrow” their provider networks, meaning that their health plan enrollees will be susceptible to higher out-of-pocket costs for seeing doctors that have suddenly lost their in-network status. And as more physician practices are forced out of insurers’ networks, or leave on their own volition, we can expect even more payment disputes going to arbitration, which is subject to complicated rules established by the No Surprises Act.

Congress passed the NSA in late December 2020, a few months after I disclosed UnitedHealthcare’s take-our-deal-or-get-lost letter to hospital-based physician groups. The intent was to establish a fair process for handling disputes between insurers and out-of-network providers, which is where the QPA comes into play. On paper, the QPA serves as a neutral reference point. In practice, it appears not to be as neutral as lawmakers and regulators had expected or intended.

That’s because unlike Medicare or other more transparent benchmarks, the QPA is entirely controlled by insurers. They don’t have to disclose how they calculate it and what contracts they include. Because of that lack of transparency, we can’t even be sure they’re not excluding higher-paying agreements from their QPA calculations or including low-to-$0 rates because of rarely used codes. Like so much of health insurers’ business practices, it’s a black box.

I’ve spoken at several physician conferences in recent years, and in conversations I’ve had with many doctors and practice administrators, I’ve learned that QPA levels for commercial health plans are often below Medicare rates for the same services — a result that, if true, indicates this benchmark has become distorted.

Insurers Ignore Arbitration Outcomes

When Congress passed the NSA, it created an independent dispute resolution (IDR) system so that when insurers and providers can’t agree on payment, an impartial arbiter decides. So far, physician practices have prevailed in the vast majority of cases — around 80-85 percent. That would make you think doctors have been the big winners from the NSA, but the ones I’ve talked to have told me the percentage is that high because insurers have simply low-balled their initial offers.

And doctors tell me that even when they prevail in an arbitrated dispute, insurers often refuse to pay promptly, if at all. Physicians report long delays, repeated administrative hurdles, and in some cases outright nonpayment of arbitration awards. This is not only unfair but it also undermines the entire NSA framework.

Recent federal data reinforce what physicians have been saying. According to the Centers for Medicare and Medicaid Services, more than 890,000 disputes were initiated in 2024, nearly triple the volume from the previous year, and providers prevailed in roughly 80% of determinations. Yet regulators have also documented widespread payment delays and unresolved cases, showing that even when physicians win, insurers often fail to pay in a timely or transparent manner.

The result is a system that works on paper but fails in practice.

Patients pay the price

It might be tempting to see this as a tug-of-war between insurers and doctors. But let’s be clear: patients lose when insurers game the system.

• As noted above, when payments are reduced or suppressed, physicians are often pushed out of networks, narrowing patients’ choices.

• When insurers drag their feet on paying fair rates, practices are forced to cut back services or close entirely, leaving communities underserved.

• And when insurers’ tactics drive up administrative burdens, the costs ultimately show up in higher premiums and worse access to care for families.

Some industry observers have suggested after analyzing available data that it is providers who have been abusing the arbitration mechanism. I worry that that framing may be misleading and even dangerous because of the lack of access to information insurers are able to hide from researchers, policymakers and the public.

I’ve spoken with large and small physician practices that are not owned by insurers or hospital systems — some that have backing from investment firms and others that do not — and their experience is the same: insurers frequently manipulate the QPA, underpay for services, and often delay payment after an arbitration dispute.

Insurers try to deflect scrutiny away from them by invoking “private equity” as the problem. But I would argue there is more than ample empirical and anecdotal evidence that big insurance companies are using their growing market power, vertical integration and lack of transparency to shortchange physicians and patients.

What policymakers should do

Federal regulators recently pointed to 96.5% of all submitted IDR disputes as “resolved or less than 30 business days old,” using that figure to suggest strong performance. At first glance, it sounds like progress. But in reality, that’s a cumulative measure (activity over time) and not timely compliance. In fact, the same fact sheet states that at the start of 2025, about 69% of open disputes were more than 30 business days old. And back in mid-2023, the Government Accountability Office found that roughly 61% of disputes remained unresolved. Neither of those data points supports the notion that disputes are being handled within the statutory timeframes.

Meanwhile, analyses of recent Public Use Files (PUF) data show that in 2024, providers prevailed in 83-88% of resolved cases. But that doesn’t speak to how long those disputes sat unresolved or how many never met the regulatory deadlines. The bottom line: the metrics publicly highlighted by regulators make the system look more functional than many physicians report experiencing. The data may look tidy on paper, but they don’t reflect what’s happening in medical practices across the country.

What is clear, is that the NSA works for patients — if insurers are held accountable. That requires:

• Enforcing prompt payment of IDR awards, with penalties for delays.

• Demanding transparency in how insurers calculate the QPA.

• Ensuring benchmarks reflect fair market rates, not insurer-manipulated figures.

Encouragingly, lawmakers from both parties are beginning to address these enforcement failures. In the House, Rep. Greg Murphy (R-NC) and Rep. Kim Schrier (D-WA) have led introduction of the No Surprises Act Enforcement Act (H.R. 4710), while in the Senate, Sen. Roger Marshall (R-KS) and Sen. Michael Bennet (D-CO) have introduced the companion S. 2420. These bipartisan efforts would finally put teeth behind the law by penalizing insurers that delay or refuse payment of arbitration awards. Congress is doing its part; now it’s time for the administration to finish the job by issuing rules that close remaining loopholes and ensure insurers can no longer game the No Surprises Act at patients’ and physicians’ expense. .Patients deserve protection, not just from surprise bills, but also from insurer abuses that quietly erode access to care.

Bottom line

The No Surprises Act was meant to protect patients. That promise is still worth fighting for. But we cannot let insurers hijack the law to line executives’ and shareholders’ pockets while undermining both patients and the physicians who care for them.

Policymakers need to listen, make insurers open that black box and ensure that the process is fair to all parties, patients especially.