No Surprises Act Updates and Strategies to Drive Operational Improvements

July 29, 2026

Executive Summary

Volume increases compound administrative strain

• CMS reports more than 5.1 million dispute initiations from April 2022 through January 2026, approximately 100 times what was anticipated by regulators
• 2.6 million disputes filed in 2025 compared to 1.5 million in 2024
• 1.4 million disputes filed between July and December 2025 (16% increase over the first half of 2025)
• Total IDR payouts exceeded $15 billion in 2025, more than triple the amount awarded in 2024

Emerging patterns of behavior warrant evaluation

• In 2025, providers prevailed in approximately 83% of determinations, while plans prevailed in 12% (5% of disputes were withdrawn) which may be incentivizing providers to continue to drive claims through arbitration to resolve. Smarter strategies, whether pre-pay or post-pay or part of network negotiation, increasingly depend on better data visibility and segmentation insights.
• New patterns are emerging, including some billing entities who rarely - if ever - participate in good faith negotiations; treating it as a perquisite to arbitration rather than as a genuine effort to reach mutually acceptable reimbursement. The eventual shifting of open negotiation into the Federal IDR Portal under the Final Rule, and the transparency that may come with it, could positively influence this trend over time.
• IDR is becoming the de facto way to resolve payment disputes instead of being used as envisioned; which was a mechanism to resolve a relatively small number of exceptional reimbursement disagreements.
• Awards are occurring at levels significantly greater than market median - resetting market benchmarks upward and contributing to healthcare cost inflation.
• Award amount variability between and within arbitrators creates inconsistent definitions of fair and reasonable.

Keep tabs on the evolving landscape and strategies that mitigate risk

• Assess provider directory accuracy to reduce compliance exposure and downstream payment conflicts.
• CMS has acknowledged that the system isn't perfect and has indicated that further change is likely to reduce the ability of participants to game the system. Litigation outcomes are also influencing the practical rules of engagement over time.

Adapt to developing policy dynamics with a comprehensive, strategic process

• While the NSA IDR Operations Final Rule aims to provide some relief on administrative pain points, its full impact will depend on implementation.
• Leverage a coordinated, strategic and data-driven approach across the entire dispute lifecycle - from pre-payment mitigation all the way through arbitration.
• Eligibility review is the "highest probability" lever for changing IDR volume. According to a Claritev analysis of 2025 data, over 47% of total claim submissions were deemed ineligible; suggesting that a sizable portion of expense is tied to disputes that should have been screened out earlier.
• Evaluations by CPT code surfaced vastly different IDR decisions across identical scenarios. Better data helps create decision frameworks that result in faster resolutions.

PART 1 | TRENDS

2026 Trends Influencing the Surprise Billing Landscape in Healthcare

A few trends are emerging that warrant executive attention including continued administrative burden due to high volumes of IDRs, emerging provider patterns of behavior, the impact of provider directory accuracy, and payer pushback through litigation.

Trend #1: Continued increases in IDR volume results in administrative strain

The most obvious market signal remains volume. CMS reports more than 5.1 million dispute initiations from April 2022 through January 2026, approximately 100 times what was anticipated by regulators. Even with better throughput, that level of activity creates major administrative burden from intake, eligibility review, batching, negotiation support, submissions, and payment reconciliation.

The original regulatory estimate is often cited as approximately 35,000 disputes per year (derived from separate estimates of roughly 17,000 provider/facility disputes plus about 5,000 air ambulance disputes, and later referenced by CMS, CBO, and other analyses as being in the ~22,000-35,000 range). As shown in Figure 1, the actual dispute volume quickly exceeded those expectations.

Figure 1: Federal IDR Disputes Volume Versus Original Estimates

Source: Interim Report on the Cooling Off Period in the Federal Independent Dispute Resolution Process

The U.S. Government Accountability Office (GAO) reported in February 2026 that health plans have expressed concern because providers have won a large majority of cases that went through IDR. Between January 1 and June 30, 2025, more than 1.18 million disputes were initiated through the Federal IDR portal, a 39% increase compared to the previous six months. Providers prevailed in approximately 88% of determinations, while plans prevailed in 12%.

These results were sustained through the duration of 2025 with providers prevailing in 83% of determinations, health plans held at 12%, and 5% were withdrawn from the process.

GAO also found that payment patterns are not uniform: for example, facility-billed emergency medicine payments rose from 2019 to 2023, while physician-billed emergency medicine payments fell over that period. That nuance matters. The market challenge is not a simple across-the-board payment increase; it is the uneven economics of different specialties, service types, and dispute categories.

A meaningful share of NSA administrative cost is avoidable. According to a Claritev analysis across clients, 47.4% of IDR submissions were deemed ineligible; suggesting that a sizable portion of expense is tied to disputes that should have been screened out earlier. As thousands of lines of claims move through the process to receive IDR entity (IDRe) decisions, it underscores how weak front-end controls can magnify downstream cost from an administrative and staffing perspective, but also from the arbitration fees required. It also surfaces a broader opportunity for IDR entities to be more transparent with the decision rationale.

Public sources suggest that the financial stakes are meaningful. In June 2026, the Congressional Budget Office (CBO) released commentary around emerging evidence suggesting that the No Surprises Act has reduced patients' exposure to surprise medical bills, while raising new questions about how IDR outcomes influence provider payments, commercial premiums, and healthcare costs over time.

Trend #2: Provider patterns add pressure to the process

Provider behavior patterns also contribute to increasing surprise bill costs. For example, submitting high volumes of ineligible claim lines at inconvenient filing dates such as Fridays, weekends, and around federal holidays. The tight timelines and administrative complexity of arbitration make it impossible for organizations without scalable processes and workflow automation to effectively review, assess, and respond to disputes at times where staff is less likely to be working. See Figure 2.

Figure 2: June 2025 Data Analysis - Claim Spikes in IDR Submissions

Three providers showed high volumes of IRD submissions on inconvenient dates.

Additionally, provider billing entities (PBEs) are not always engaging in the good-faith negotiation behavior the No Surprises Act requires in Open Negotiation. A preliminary data analysis from a single week in 2025 is displayed in Table 1. The analysis surfaced a near zero willingness to participate in the negotiation process from some of the largest contributing PBEs.

Table 1: Five Provider Billing Entities (PBEs) Who Consistently Fail to Participate in the Negotiation Process

Provider Billing Entity (PBE)	Total Unique Claim Volume	No Good Faith Volume	No Good Faith Rate
PBE 1	2,213	2,213	100%
PBE 2	1,730	1,617	93%
PBE 3	360	354	98%
PBE 4	267	263	99%
PBE 5	228	224	98%

The observations in Figure 2 and Table 1 are directionally valuable and explain why many payers are investing in provider-pattern analytics and workflow automation, rather than relying only on manual compliance review.

A vivid example of the frictional cost of aggressive provider offers was found through an internal analysis where over 5,000 claim lines involved provider offers that exceeded billed charges, which incurred over $600,000 in additional IDR administrative fees and $3.5M in additional IDR entity fees. For executive audiences, it's an important reminder that NSA economics are shaped not just by final award amounts, but by the cost of the process itself.

Trend #3: Provider directory accuracy is the new compliance front line

Provider directory accuracy is one of the most underappreciated NSA exposure points. Although the NSA is often discussed through the lens of balance billing protections and payment disputes, the broader transparency environment increasingly ties inaccurate network information to consumer harm. That matters because when patients rely on outdated or inaccurate network information, the resulting out-of-network encounter can create both compliance exposure and downstream payment conflict.

American Journal of Managed Care conducted a study and found 40% of physician directory inaccuracies persisted after extended periods of time. CMS's NSA resources continue to position transparency and dispute resolution as linked parts of the consumer-protection framework.

The implication is practical: a provider directory that is technically posted but operationally stale is a disservice to the rule and spirit of the NSA. Stronger organizations treat provider data as a governed operational asset, with tighter coordination across credentialing, contracting, digital, and member-service channels. Surprise bill workflows increasingly require integrated facility matching, QPA logic, provider grouping, and downstream workflow orchestration rather than manual case handling.

Trend #4: Payers pushing back via litigation

Payer pushback remains a core feature of the NSA landscape. Recent agency FAQs and court decisions continue to shape QPA-related interpretation and other implementation mechanics, while the broader litigation environment shows that parties are still contesting both methodology and enforcement pathways. That means leaders cannot treat their operating assumptions as fixed. Litigation matters because it changes the practical rules of engagement even when the statute itself remains the same.

The market response to that uncertainty is increasingly operational. Plans are trying to reduce the number of cases that progress unnecessarily, target disputes where defensible, and avoid creating long-term payment precedents that ratchet costs upward. Payer objectives should be focused not only on compliance, but also on avoiding operating-cost increases, and reducing member-provider abrasion.

PART 2 | FRAMEWORK

What's Next: The Framework for Long-Term Sustainability

To stay ahead of the curve, organizations must find the right balance between operational discipline, organizational flexibility, and process efficiency.

Operational discipline

CMS reporting shows the IDR process is moving faster than it did during the backlog period, but it is still processing hundreds of thousands of disputes a month. In total, from December 1, 2025, through January 31, 2026, dispute closures (506,242) were nearly equal to initiations (516,241), and CMS reported 257,724 disputes closed in January 2026 alone.

That is a major improvement from the early backlog era, but it also validates that the process remains a high-volume environment that requires scalable workflows. That makes NSA performance less of a narrow compliance issue and more of an enterprise operating discipline spanning contracting, provider data, revenue cycle, claims, and dispute strategy.

Organizational flexibility

In July 30, 2025, three departments, Departments of Labor, Health and Human Services (HHS), and the Treasury, jointly issued FAQs, which explicitly reference the Texas Medical Association litigation and explain that portions of prior rules and guidance tied to qualifying payment amount (QPA) methodology were vacated or affected by court decisions.

With the NSA final rule coming to fruition, the practical takeaway is that NSA compliance is not static. Organizations need governance models that can absorb legal and operational change without frequently rebuilding workflows.

Process efficiency

NSA management is an end-to-end process spanning identification, QPA application, initial payment, open negotiation, arbitration, and post-determination execution, rather than a single downstream payment dispute. As shown in Figure 3, IDR timelines remain aggressive and timely communication and information-sharing are often required within 24 hours to avoid process failures.

Figure 3: Independent Dispute Resolution Process

PART 3 | STRATEGY

Three Strategic Areas for Healthcare Leaders to Drive Improvement

Resolve claims before they reach arbitration

One of the most effective strategies is to mutually agree on surprise bill reimbursement before claims are paid, preventing them from ever getting to IDR. That includes leveraging complementary network and standing rate agreements, proactive provider engagement and targeted pre-pay negotiation strategies. Making prepay and early negotiation more intentional using provider behavior insights, benchmark-driven offers, and variable ceiling logic can improve settlements before cases escalate. Negotiation strategy is increasingly informed by analytics on probability of escalation, provider tendencies, IDRe patterns, and the total cost of fees and losses.

If claims are unable to be resolved proactively and move on to the post payment dispute resolution process, the open negotiation period remains the best opportunity to reduce both volume and cost before formal Federal IDR begins. Under the federal process, parties must still complete a 30-business-day open negotiation period after an initial payment or notice of denial before Federal IDR may proceed. The Final Rule keeps this 30-business-day period in place, while adding portal-supported submissions, expanded documentation expectations, and a required response notice by the 15th business day. Organizations that treat open negotiation as a procedural waiting period, rather than an opportunity to reach a mutually agreed upon fair and reasonable reimbursement, often miss the most efficient intervention point.

A stronger 2026 strategy is to make prepay and early negotiation more intentional. The use of provider behavior insights, benchmark-driven offers, and variable ceiling logic can improve settlements before cases escalate. Negotiation strategy is increasingly informed by analytics on probability of escalation, provider tendencies, IDRe patterns, and the total cost of fees and losses.

Leaders should also consider standing-rate or global agreements to help reduce unnecessary recycling of similar disputes, streamline resolution, and cut future volume.

Identifying ineligible claims

This is one of the clearest areas for operational improvement in 2026. By law, the federal IDR is only available for certain services and plan types, and only after required steps are met, yet the data shows that ineligible matters still consume substantial administrative effort. For many organizations, the fastest path to better NSA economics is not winning more arbitrations but preventing low-value or non-qualifying matters from entering expensive workflows in the first place.

That means front-loading eligibility review, tightening state-versus-federal routing, improving notice and timing controls, and auditing recurring sources of invalid submissions. Eligibility review is the "highest probability" lever for changing IDR volume and influencing provider behavior.

Dynamic ceilings

Static settlement thresholds are increasingly too blunt for today's NSA environment. GAO's 2026 report shows that payment trends differ by specialty and setting, and award expectations can also vary materially by IDRe. For selected emergency department codes, the data shows substantial variation in determination amounts by IDRe.

As an example, for CPT 99283, determinations were typically around 450-600% of Medicare, and IDRe assignment could shift expectations by roughly 100 to 150 percentage points. For CPT 99284 and CPT 99285, the data likewise showed meaningful variation in median determinations and spread by entity. GAO's findings that providers have won a large majority of IDR cases help explain why that variability matters strategically.

Dynamic ceilings based on provider, specialty, geography, service type, and likely IDRe behavior are more defensible than a single enterprise-wide rule. Offer strategy can be calibrated using provider, client, service, and IDR e-specific analytics, rather than a one-size-fits-all ceiling.

Sources

Interim Report on the Cooling Off Period in the Federal Independent Dispute Resolution Process

Independent dispute resolution reports | CMS

GAO-26-107169, PRIVATE HEALTH INSURANCE: Provider Network Participation and Payments for Selected Services Prior to and After Implementation of the No Surprises Act

FAQs about Consolidated Appropriations Act, 2021 and Affordable Care Act Implementation Part 71

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