A federal law intended to protect patients from unexpected out-of-network medical bills may be creating a new financial problem: steadily rising insurance premiums. That is the central warning of research published this week in the journal Health Affairs, with direct relevance to Colorado Springs residents who carry employer-sponsored or individual health plans.
The No Surprises Act, which targets surprise billing situations involving out-of-network care, has been linked to a sharp escalation in arbitration costs between physicians and insurers — reaching $22.4 billion in 2025. The Georgetown researchers concluded that this cost escalation gives both employers and insurers financial grounds to increase premiums.
Central to the law is an Independent Dispute Resolution process in which a neutral arbitrator steps in when a provider and an insurer fail to agree on payment. Each party submits a monetary proposal backed by documentation, and the arbitrator picks one of the two offers after weighing multiple factors. The side whose proposal is rejected must also cover additional fees. By 2025, the typical award granted to providers through arbitration ran 445 percent above the rates that in-network insurers ordinarily pay those same providers.
Jack Hoadley, one of the study's authors and a faculty member at Georgetown's McCourt School of Public Policy, said the team believes its $22.4 billion figure is actually an undercount. He called for lawmakers to reconsider the statute's structure, arguing that "the time may, in fact, be ripe to revisit [the law] to realize the law's original cost containment goals without jeopardizing the consumer protections that are really the main reason this law got passed in the first place."
The providers generating the most arbitration activity are not the ones Congress originally had in mind when drafting the legislation — air ambulances, for example, were a primary concern. In practice, surgeons and neurologists account for the largest share of disputes, and the dollar amounts arbiters award in those cases appear uncapped.
The researchers were careful to note that the law is, in a narrow sense, functioning as designed: providers prevailed in roughly 85 percent of all arbitration cases last year. Even so, the team cautioned that the cumulative cost of those outcomes will likely press down on the premiums ordinary Americans pay.
The Georgetown findings arrive after the nonpartisan Congressional Budget Office raised similar concerns over the summer, signaling that the No Surprises Act "might not have the effects" that policy experts originally projected. Whether Congress will move to amend the law in light of both assessments remains an open question.