By: TAHP | Thursday, April 2, 2026

What’s new: Abuse and misuse of the No Surprises Act’s independent dispute resolution (IDR) process is fueling the health care affordability crisis. Estimates show that rampant misuse of the arbitration program has forced over $5 billion in wasteful spending, ultimately adding to the health insurance affordability crisis.

Go back: The No Surprises Act blocked out-of-network health care providers from “balance billing” patients when they had no choice of their doctor or hospital, for example, in the ER or getting anesthesia before surgery. Instead, insurers and physician representatives are required to work out a final payment through an arbitration process.

Why it matters: The No Surprises Act is doing its job protecting patients from unexpected bills. But the abuse of its dispute process is creating a different kind of surprise.

• Private equity firms are managing to win in arbitration at three to four times the normal rate, pushing costs onto Texas employers and families through higher premiums.
• The number of claims submissions is coming in ten times higher than expected.
• While, the law is protecting individual patients from an upfront surprise bill, it’s now quietly making health care more expensive for everyone.

A profit engine in disguise: Instead of serving as a last resort for legitimate billing disputes, the IDR process has become a profit engine for a small subset of highly consolidated out-of-network provider groups, wasting vast amounts of money that should be going to patient care.

• $5 billion in new spending linked to arbitration abuse since the law took effect — about $2 to $2.5 billion every year and growing.
• 3.3 million disputes were filed from mid-2022 through May 2025. Regulators originally projected 17,000 per year.
• 39% of all disputes filed in 2024 were identified as ineligible under the law. Yet health plans were forced to payout nearly half of ineligible claims.
• 88% of the time, providers are collecting three to four times what an in-network provider would receive for the same care.
• 43% of all disputes in ‘23-’24 came from just two large private equity physician groups: TeamHealth (ER Services) and Radiology Partners

Texas is ground zero: Over one-third of all claims nationally — 37% — came from Texas alone. A STAT News investigation shows why. A Texas couple built a company called HaloMD with one purpose: file as many arbitration disputes as possible on behalf of out-of-network providers and collect a cut of the winnings by exploiting a law designed to protect patients.

• How they do it: HaloMD filed more cases than any other company in the first half of 2025 and claims to bring in over $1 billion a year. Their payouts ran nine times what an in-network provider would receive for the same care. This is the private equity health care playbook: find a weakness in the system and turn it into a business model.

Employers are demanding change: A bipartisan coalition of more than 60 employer groups, insurers, patient advocates, and labor organizations has urged the Trump administration to strengthen enforcement, screen out ineligible claims, and penalize providers that repeatedly game the system.

• Recently, Sens. Bill Cassidy (R-La.) and Maggie Hassan (D-N.H.) — key architects of the No Surprises Act — sent a letter supporting the Trump administration’s efforts to fix the law. Their ask: stronger enforcement, accountability for arbitrators who ignore market rates, and penalties for fraud.
• On Texas health insurer has filed suit alleging fraud against HaloMD for submitting ineligible claims submissions to the IDR process. Several similar cases are pending in other states.

The bottom line: The No Surprises Act continues to protect Texans from unexpected bills. But the abuse of its dispute process is driving up costs for Texas employers and families. Fixing it protects the law — and the patients it was built to serve.

Keep up with TAHP’s affordability series:

• March 30th: How hospitals are using AI to charge more.
• Series Opener: Why is health insurance getting more expensive?