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Lawmakers are weighing changes to the No Surprises Act’s process for resolving payment disputes between insurers and out-of-network providers. A new proposal from Rep. Frank Pallone would replace arbitration with a payment benchmark, while a separate bill would penalize insurers that fail to pay awards on time. The scale and causes of the dispute system’s growth, and which proposal Congress may advance, remain unresolved.
Congress is considering competing changes to the No Surprises Act’s payment-dispute system, after arbitration cases far exceeded the government’s initial estimate and providers and insurers have clashed over awards. A bill introduced by Rep. Frank Pallone (D-N.J.) would eliminate independent dispute resolution and use the law’s qualifying payment amount as the payment standard, while a separate proposal would impose penalties on insurers that do not pay awards within 30 days.
The dispute process applies when an out-of-network provider and an insurer cannot agree on payment for certain care covered by the law. The parties first negotiate; if they fail to reach agreement, they may use independent dispute resolution (IDR), in which an arbitrator selects a payment amount. The law also established a qualifying payment amount (QPA), intended to approximate the median rate for comparable in-network care.
Jack Hoadley, a Georgetown University health policy analyst, told MedPage Today that arbitration was expected to be used in a relatively small share of cases, with negotiation resolving many disagreements. He said court rulings rejected a federal rule that would have treated the QPA as the default presumption for arbitrators, requiring them instead to consider other factors. Hoadley said providers prevailed in about 85% of cases, a pattern he argued encouraged higher payment requests. Those figures and explanations were presented by Hoadley in the report.
The government had estimated that about 22,000 disputes a year would enter arbitration; Hoadley said the system received more than 4 million disputes in 2025. The report also describes a separate enforcement dispute: Josh Hill, an attorney, said some insurers have not paid awards, despite the statute’s 30-day payment requirement. He said courts have disagreed over whether providers can sue to collect unpaid awards.
Competing Fixes Could Reshape Provider Payments
The proposals would address different parts of the dispute process and shift leverage between insurers and providers. Pallone’s bill would remove the arbitration route and make the QPA the operative payment benchmark. A bill introduced by Rep. Greg Murphy (R-N.C.) in September 2024 would retain arbitration but require steep penalties for insurers that miss the 30-day payment deadline, along with additional reporting on payment compliance.
The disagreement matters beyond the parties negotiating bills. The No Surprises Act was designed to protect patients from unexpected out-of-network bills in specified situations, including emergency care at an in-network facility. The proposals described in the report concern how insurers and providers settle payment after that patient protection applies. Their effects on payment levels, dispute volume, provider participation, or insurers’ costs have not been established in the material provided.
The arguments are sharply divided. Physician groups oppose eliminating IDR, saying it could give insurers more control over payments. Consumer group Families USA supports replacing arbitration with a benchmark, arguing it would reduce incentives to flood the process with disputes and seek inflated payouts. These are the groups’ stated positions, not settled findings about what either bill would do in practice.
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How the Arbitration Dispute Developed
Congress passed the No Surprises Act at the end of 2020 to protect patients from certain unexpected bills for out-of-network care. Such bills could arise when a patient received care at an in-network facility but was treated by an out-of-network provider, including in emergency or specialty settings. Under the law, the insurer and provider negotiate the payment; unresolved disputes can go to IDR.
The QPA was intended to reflect a median rate for comparable in-network care. According to Hoadley, federal regulators initially proposed making it the default starting point for arbitrators, but court decisions rejected that presumption and required consideration of other factors. He linked the resulting arbitration pattern and the sharp rise in cases to the system’s current strain. The report does not establish that any single factor caused the increase.
Payment enforcement has also become contested in court. Hill told MedPage Today that two federal appeals courts have said providers lack a right to sue to collect awards, while a lower court reached the opposite conclusion. He said cases in Maryland and Virginia could produce further appeals and potentially deepen the disagreement among courts.
“Most people did expect arbitration to be used modestly in a relatively low number of cases.”
— Jack Hoadley, professor emeritus at Georgetown University’s Center on Health Insurance Reforms
Key Details Remain Unsettled
It is not clear which proposal, if any, will advance in Congress or whether lawmakers will develop a compromise. The source report does not provide a timetable for committee action or a vote. Nor does it specify how Pallone’s bill would handle every category of dispute or how its benchmark would work in practice.
The cause of the increase from the government’s estimate to more than 4 million disputes in 2025 is also not fully resolved in the report. Hoadley attributed the arbitration outcomes to incentives to request higher amounts, while physician groups fault insurer practices as part of the problem. Those perspectives differ, and the material does not quantify the contribution of each factor.
Whether providers can sue to collect unpaid awards remains contested across courts, according to Hill. The report does not identify a final ruling that settles the issue nationwide, nor does it specify the total amount of unpaid awards or the number of insurers involved.
Congress Faces a Legislative Choice
Congressional action is the next major step, though the report gives no schedule for hearings, votes, or negotiations. Lawmakers could consider Pallone’s proposal to replace IDR, Murphy’s proposal to strengthen payment enforcement, or other approaches. Hoadley told MedPage Today that the problems are unlikely to be resolved through administrative action alone and said a legislative response may be needed.
Separately, pending cases in Maryland and Virginia could continue through the courts and add to the disagreement about providers’ ability to collect unpaid awards. Further appeals could clarify the legal question, but the timing and outcome are unknown. For now, the law’s patient billing protections remain in place while Congress weighs changes to the process used to determine and pay provider claims.
Key Questions
What change is Rep. Frank Pallone proposing?
Pallone’s bill, introduced October 8, 2026, would eliminate independent dispute resolution and use the qualifying payment amount as the payment standard, according to the report.
What does the separate Murphy bill address?
Rep. Greg Murphy’s proposal would require insurers that fail to pay arbitration awards within 30 days to pay penalties. It would also require more reporting on insurers’ payment practices.
How many disputes entered the system in 2025?
Hoadley told MedPage Today that more than 4 million disputes entered arbitration in 2025. The government had estimated about 22,000 disputes per year; the report does not provide a fuller breakdown of the cases.
Does Congress have a scheduled vote on the proposals?
The source report does not give a hearing or vote schedule, or say which proposal is likely to advance.
Are patients losing the No Surprises Act’s protections?
The proposals discussed focus on how providers and insurers resolve payments. The report does not say that the law’s patient billing protections have been repealed or changed.
Source: medpagetoday.com
