Study: No Surprises Act Arbitration Has Added $22 Billion in Health System Costs

New research from Georgetown University finds that the dispute resolution process created under the federal No Surprises Act has generated $22 billion in additional costs, according to a report covered by Healthcare Dive on August 26, 2026. The researchers point to accelerating dispute volumes and unexpectedly high arbitration award amounts as the main drivers, and they warn that patients could ultimately feel the impact through higher insurance premiums.

The No Surprises Act is a federal law, effective since 2022, that protects patients from unexpected out-of-network medical bills for emergency care and for certain services received at in-network facilities. When an insurer and an out-of-network provider can't agree on a fair payment amount for a covered service, either side can trigger Independent Dispute Resolution, or IDR, a federal arbitration process in which a certified third-party arbiter picks one of two competing payment offers. IDR was designed as a narrow backstop, used only when direct negotiation fails. According to Healthcare Dive's coverage of the Georgetown findings, that backstop has been used far more often, and at far greater expense, than regulators originally anticipated.

This is source-reported research rather than a government audit or enforcement finding, and the underlying study has not been independently reviewed here. Still, the topline claim, that IDR has become a meaningfully more expensive process than expected, lines up with years of reporting on the program's ballooning case backlog and administrative strain on the agencies that run it.

Key Takeaway

The No Surprises Act's arbitration system primarily governs employer-sponsored and Affordable Care Act marketplace plans. It generally does not apply to Original Medicare or Medicare Advantage, which already operate under separate, long-standing balance-billing protections. But rising system-wide costs tied to this dispute process could still ripple into broader health care pricing trends that touch every type of coverage over time.

What This Means for Medicare Shoppers and Their Families

If you're enrolled in Original Medicare or a Medicare Advantage plan, the IDR process described in this research doesn't directly determine your bills. Medicare has its own rules limiting what providers can charge, and Medicare Advantage plans have their own network and cost-sharing protections that operate outside the No Surprises Act's arbitration system. That means the $22 billion figure Georgetown researchers cite is not a direct line item on any Medicare premium notice you'll receive.

Where this news matters most is for people who aren't yet on Medicare, or who have family members in that position. The No Surprises Act protections and the IDR process behind them apply to people under 65 on employer group plans, COBRA coverage, or individual marketplace policies, including near-retirees still working, spouses who haven't reached Medicare eligibility, and adult children helping aging parents navigate coverage gaps. If arbitration costs continue climbing the way the study suggests, insurers covering that population may pass those costs along through higher premiums, which is worth watching if you're helping a family member compare marketplace plans before they age into Medicare.

There's also a broader, more indirect connection worth understanding. Health care spending trends tend to move together across the system: rising costs in commercial insurance and the group market can influence provider contracting, hospital pricing strategies, and overall medical inflation, all of which factor into how Medicare Advantage plans and Medigap insurers set premiums and benefits each year. Researchers haven't quantified that spillover effect in this study, and it's not something this article can verify, but it's a reasonable reason for Medicare beneficiaries to pay attention to surprise billing policy even though it doesn't govern their claims directly.

Practical steps for readers: if you or a family member receives a medical bill that looks like a surprise out-of-network charge, request an itemized bill and your Explanation of Benefits before paying, since these documents are what you'd need if you ever dispute a charge. If you're comparing Medicare Advantage or Medigap options this fall during Medicare's Annual Enrollment Period, ask a licensed insurance agent how each plan handles out-of-network and emergency care specifically, rather than assuming No Surprises Act protections apply. And if premium increases show up in your renewal notice, it's worth asking your agent whether the insurer has cited rising medical costs as a factor, that context can help you decide whether to shop around.

Georgetown's research adds to a growing body of evidence that the No Surprises Act's dispute process is more expensive to operate than lawmakers projected when the law passed. Whether that translates into higher costs specifically for Medicare beneficiaries remains unclear, and this article does not claim otherwise. What is clear is that surprise billing policy continues to shape the health insurance market that Medicare plans operate within, making it a story worth watching even for readers who are fully covered by Medicare today.