As we head into 2027, one of the major drivers of premium increases can be attributed to the No Surprises Act. Here, we will explain the NSA and why you should be concerned with its impact on the future of your insurance premiums.
The No Surprises Act explained
The No Surprises Act went into effect on January 1, 2022. It was created to stop patients from getting unexpected "balance bills," meaning extra charges they didn't know about until after they were treated. The main targets were emergencies and situations where a patient goes to an in-network hospital but is seen by an out-of-network provider they didn't choose, like an anesthesiologist, radiologist or ER doctor.
The NSA has done its job of protecting patients from these balance bills. But it has had unintended consequences in how insurers and out-of-network providers settle payment for those services.
How payment disputes get settled
When a patient is treated by an out-of-network provider in one of these situations, the patient only pays their normal in-network cost share. The insurer and the provider then have to work out the rest. The insurer makes an initial payment, usually based on what it typically pays in-network providers for that service. If the provider doesn't like the number, the two sides have 30 days to negotiate. If they can't agree, either side can take it to federal arbitration. Each side submits a price, and the arbitrator picks one or the other. There is no middle ground.
For example, an out-of-network anesthesiologist working at an in-network hospital bills $50k for a procedure. The insurer pays $10k, which is in line with what it pays in-network anesthesiologists. The provider disputes it, and the arbitrator decides whether the insurer owes $10k or $50k.
Far more disputes than anyone projected
The arbitration process was expected to be used from time to time. Regulators projected around 22,000 disputes a year. Instead, there were about 2.5 million disputes in 2025 alone, and more than 6 million since the process started. Arbitrators sided with providers about 85% of the time in 2025, often at amounts several times what the insurer would normally pay. That has cost billions of dollars. Insurers pass those costs on through higher premiums, and self-funded and level-funded employers pay these awards straight out of their plan.
Worth noting: arbitration firms collected about $1.9 billion in fees from 2023 to 2025, and the government took in another $742 million in administrative fees. A handful of firms handle most of the cases. In 2025, providers won more than 85% of decisions, and arbitrators awarded them nearly $15 billion, at amounts averaging over 6x local in-network rates.
Who is filing
The volume is mostly coming from the provider side. Ten filers accounted for about 67% of cases, mostly private equity-backed provider groups and billing vendors filing disputes in bulk. When it costs a few hundred dollars to file and the award can be several times the in-network rate, disputing nearly everything pays off.
Something doesn't add up
You won't often find us sympathizing with insurance companies when they complain about paying for care. But an 85% win rate for one side raises eyebrows, at the very least. So does a process running 115x more often than projected while the select few arbitration firms get paid on every case. Something doesn't add up, and unfortunately, it's the end consumer who will likely be left holding the bag while these companies make billions.