No Suprises Act and IDR: What employers need to know about rising health plan costs

When the No Surprises Act took effect in 2022, it established important protections for patients who receive certain care from out-of-network providers through no reasonable choice of their own.

The law changed what happens to the patient, but it did not eliminate the underlying payment dispute. When an eligible provider and health plan cannot agree on reimbursement through open negotiation, either party can initiate the federal Independent Dispute Resolution (IDR) process.

For employers, IDR has largely operated in the background, typically administered by a carrier or third-party administrator (TPA). Its growing scale and financial impact suggest it deserves greater attention.

Alliant experts are seeing cases where IDR-related costs represent up to 5% of annual medical expense. Experience varies considerably by plan, and 5% should not be viewed as a benchmark or expected impact. It does, however, raise an important question for employers:

Based on that assumption, an IDR impact of 5% would equate to approximately:

Illustrative scenario only, assuming $16,000 in annual medical expense per enrolled employee and a 5% IDR impact. Actual medical expense and IDR impact vary by plan. Alliant has observed IDR-related costs of up to 5% of annual medical expense in some cases; 5% should not be interpreted as an expected impact or benchmark.

Why IDR deserves attention now

When the federal IDR process was designed, regulators projected approximately 22,232 disputes annually. In 2025, 2,559,375 disputes were initiated, more than 115 times the original annual projection. Through July 2026, another 2,145,850 disputes had been initiated.

How is IDR affecting employer health plan costs?

The activity is primarily coming from the provider side. In the second half of 2025, providers or their representatives initiated 76% of disputes, while facilities or their representatives initiated 24%.

The payment outcomes are also significant. Georgetown's analysis of 2025 federal IDR data found that when providers prevailed, their median award was 445% of the QPA, meaning the award was more than four times the payer's qualifying payment amount.

Those national figures establish scale. They do not tell an employer what is happening inside its own plan.

That is where Alliant believes the conversation needs to change.

Transparency: How can employers identify their IDR exposure?

You cannot manage an exposure you cannot see.

Employers should understand how many IDR disputes involve their plan, their financial outcomes and whether activity is concentrated among particular providers, facilities, specialties or markets.

They should also understand how disputes move through the process. How many are resolved through negotiation? How many reach arbitration? How many are found ineligible or result in defaults?

The goal is not to use national statistics to judge an individual carrier or TPA. It's to obtain enough plan-specific information to understand the employer's own experience.

Cost: What is driving IDR-related health plan expense?

Some expense reflects legitimate reimbursement disputes. Other outcomes may be influenced by eligibility, negotiation strategy, administration, vendor arrangements or fees.

Employers should bring IDR into carrier and TPA oversight by asking about dispute outcomes, negotiation strategy, administrative performance, fees and the measures used to evaluate the process.

Quality: Can employers address IDR exposure upstream?

IDR management should not end when a dispute begins.

Claims and provider data may show that out-of-network activity is concentrated among particular facilities, specialties, providers or sites of care. That can create opportunities to look upstream at network strategy, contracting, navigation and the quality and cost of care.

Success is not simply winning more IDR cases. It is understanding why disputes occur and identifying opportunities to improve the cost and care decisions that precede them.

How Alliant can help employers manage IDR

Alliant evaluates healthcare value through both quality and cost, considering access, outcomes, appropriateness and experience as components of quality. When employees have a choice about where to receive care, better information about provider quality, cost and network status can support more informed decisions.

We help clients engage carriers and TPAs around IDR activity, financial outcomes, administration, fees and vendor performance, while broader navigation and advocacy capabilities can support employees in making impact healthcare decisions.