No Surprises Act Arbitration Awards Cost Plans $8.39 Billion

Surprise-billing arbitration awards left health plans owing about $46 more for every person with employer coverage in 2025, the Employee Benefit Research Institute estimated on November 12.

The figure comes from EBRI Issue Brief No. 669, written by Paul Fronstin, the institute's director of health benefits research. It takes each federal independent dispute resolution (IDR) award that closed in 2025 and subtracts what the plan had first paid and what the patient owed. The remainder across all awards is $8.39 billion, or 0.625% of an estimated $1.342 trillion in employment-based health plan costs. Pivotal Health Technologies funded the study.

The estimate comes as arbitration runs at more than 100 times the volume the government planned for. The agencies projected about 22,000 cases a year when they wrote the rules in 2021, EBRI said. CMS counted 1,186,812 disputes initiated in the first half of 2025 and 1,372,563 in the second half, about 2.56 million in all.

Key Takeaways

Plans' first payments covered little of what arbitrators awarded: $0.722 billion against $5.729 billion of second-half awards, about 13 cents on the dollar.
Most awards are small. The median extra plan payment per line item was $385 in the third quarter, against a mean of $1,845.
Self-insured employer plans were on the other side of 486,734 of 719,118 disputes filed in the fourth quarter, CMS tables show.
Texas generated 280,355 fourth-quarter filings, more than six times the 44,934 from Arizona in second place.
Emergency department awards ran at a median 334% of the plan's median contracted rate in the fourth quarter. Surgery awards ran at 1,503%.

How EBRI built the estimate

CMS added two fields to its public-use files from the third quarter of 2025: the plan's initial payment and the patient's cost sharing. EBRI's worked example is a $1,000 award, less a $200 initial payment and $100 of cost sharing, leaving $700 of additional plan obligation.

On 2,468,884 usable line items from the second half, selected awards totaled $5.729 billion. Initial plan payments were $0.722 billion and patient responsibility $0.281 billion, leaving $4.726 billion.

The first half had to be estimated, because the new fields were missing. EBRI took the gap between awards and the qualifying payment amount (QPA), which generally reflects the plan's median contracted rate for a service in its area, and scaled it by the relationship seen in the second half. That gap was $3.642 billion. The scaling ratio was 1.005749, giving $3.662 billion.

The ratio is a finding in its own right. Measured on 2,189,000 identical records, award minus initial payment and cost sharing was only 0.57% larger than award minus QPA. A pricing actuary who loads out-of-network cost as the excess of expected awards over the QPA would, on these figures, land within 1% of the plan's actual added obligation in aggregate.

EBRI dropped 27 line items whose difference exceeded $1 million in either direction, citing apparent scaling errors. With no cutoff the estimate is $10.573 billion. At a $100,000 cutoff it is $8.023 billion.

The denominator combines $981.3 billion of private-sector plan costs from the federal MEPS-IC survey, $595.2 billion of it in self-insured plans, with $289.7 billion for state and local government plans and $71.3 billion for federal employees. Spread over 180.7 million people with employment-based coverage, the obligation is $46 a year, or $50 for the 167.3 million under age 65.

Employer premiums rose 5% for single coverage and 6% for family coverage in 2025, according to KFF survey figures the brief cites. "The $8.39 billion estimate equals approximately 0.625% of employment-based health plan costs, but it does not establish how much the No Surprises Act changed premiums," Fronstin said in EBRI's release.

Where the awards land

CMS's own tables for the same period show where the awards concentrate. Arbitrators made 1,145,039 payment determinations in the second half of 2025, CMS said. Providers, facilities and air ambulance operators prevailed in about 85%, down from 88% in the first half, and the winning offer was above the QPA in about 87%. Emergency department services were 52% of determinations and radiology 15%.

Specialty, Q4 2025	Payment determinations	Median winning offer as % of QPA
Emergency department services	277,058	334%
Radiology	79,253	398%
Anesthesia	58,016	361%
Surgery	55,885	1,503%
Neurology and neuromuscular procedures	32,145	2,585%
Pathology and laboratory	31,977	440%
Air ambulance	9,513	237%

Source: CMS, Federal IDR Supplemental Tables for 2025 Q4, Table 14, as of July 22, 2026.

The multiples fall as the service gets more expensive. Where the QPA was under $100, the median winning offer in the fourth-quarter tables was 522% of it. At $10,000 or more it was 169%.

That matches the shape EBRI found. The median additional obligation per line item was $385 in the third quarter and $391 in the fourth, with means of $1,845 and $1,994.

Amounts that size stay in a self-funded employer's own retained claims, far below a stop-loss attachment point, and self-funded plans carry most of the volume: 486,734 of the 719,118 disputes initiated in the fourth quarter involved a partially or fully self-insured employer plan, against 93,562 for fully insured group plans.

The $46 average also covers an uneven map. Texas accounted for 280,355 fourth-quarter initiations, ahead of Arizona at 44,934 and Florida at 40,377. HaloMD alone filed 134,467 disputes outside air ambulance, 19% of that category, followed by Team Health at 11% and SCP Health at 7%. The ten largest filers produced about 66% of second-half disputes.

On the plan side, UnitedHealthcare was the responding party in 171,928 fourth-quarter disputes, Blue Cross Blue Shield of Texas in 129,662 and Aetna in 101,613.

Unpaid awards, fees and claims settled earlier

EBRI's figure counts awards, and an award is an obligation that may be paid late. Nine members of the Emergency Department Practice Management Association reported winning about 659,600 claims in 2025, and 48% were not paid within the required 30 days, according to the trade group's survey. Claims that were paid took an average of 67 days, and $245 million was outstanding at year-end.

As an illustration, EBRI applied a 22% nonpayment rate reported in a provider survey covering 2023. That would cut the total to about $6.54 billion, or 0.487% of plan costs.

Administrative cost sits outside the estimate. A Health Affairs Forefront analysis by Jack Hoadley and Kennah Watts put 2025 IDR-related costs at $16.6 billion, EBRI said, a figure that adds internal expenses at $857 a dispute and the fees both sides pay. CMS collected $143.1 million of administrative fees in the fourth quarter alone, and certified IDR entities were paid $304.8 million.

Most claims never get that far. EBRI cited industry estimates that about 76% of initial payments are accepted, 18% are settled in open negotiation and 6% reach arbitration. Payments on those claims could move either way, the brief said: lower settlements could offset some of the award differences, or arbitration outcomes could shape what providers expect at the bargaining table. "We cannot tell from these data which effect is larger," Fronstin wrote. A Government Accountability Office report cited in the brief found the in-network share of claims rose after the law took effect for three of the four specialties it studied.

Disputes initiated in 2025 carried an administrative fee of $115 a party. A final rule cut it to $15 for disputes initiated on or after June 11, 2026, as actuary.info reported in its June piece on the IDR operations rule, and the agencies wrote that the lower fee "could increase the number of disputes initiated."

Fronstin told a press briefing that rising volume was one reason EBRI stopped short of a premium estimate, Insurance Business reported. "The trend to more awards is going to drive that percentage up closer to 1% and perhaps eventually above 1%," he said.

EBRI Says Surprise-Billing Arbitration Cost Plans $8.39 Billion More

Key Takeaways

How EBRI built the estimate

Where the awards land

Unpaid awards, fees and claims settled earlier

Further Reading

Sources

EBRI Says Surprise-Billing Arbitration Cost Plans $8.39 Billion More

Key Takeaways

How EBRI built the estimate

Where the awards land

Unpaid awards, fees and claims settled earlier

Further Reading

Related guides

Sources