Health care costs and the unintended impact of the No Surprises Act

Health care affordability is a top priority for Iowans and a critical issue for business leaders. Rising costs affect what employers pay and what employees see in paycheck deductions for their insurance coverage. One factor driving these costs is the federal No Surprises Act (NSA). 

The NSA protects patients from surprise bills when they see an out-of-network doctor in situations where they cannot choose an in-network doctor, such as emergency care or hospital-based services like anesthesia and radiology ​(CMS, n.d.)​. This part of the law seems to be working. At the same time, other parts of the NSA have had unintended negative consequences—including driving up health care costs. 

The primary driver of increased costs is the Independent Dispute Resolution (IDR) Process created by the NSA. The IDR process was intended to determine how much out-of-network providers should be paid when they cannot agree with a health plan on a reimbursement amount. Instead, this process has been exploited by certain providers, many of them investor-owned, to achieve exorbitant payments for routine and sometimes elective health care services.  

Both the number of IDR cases and the financial exploitation of them have surged far beyond early estimates, driving payment outcomes that significantly exceed typical in-network rates. ​(CMS, 2024)​ ​(KFF, 2024)​. Despite the law’s intent to curb inflated charges, providers win nearly 80 percent of disputes, routinely securing award payments averaging 445 percent of the median in-network rate. Some outliers, like HaloMD, have received payments exceeding 930 percent—costs that ultimately strain the affordability of health care ​(HealthAffairs, 2025)​. In the case of self-funded health plans, these dramatic cost increases are paid directly by employers.  

Some providers are leaning hard on IDR and driving up costs in the process. One provider reported IDR rulings fueled $105 million of its quarterly revenue increase ​(Blue Cross of Idaho, 2025)​.  

The pattern becomes even clearer when looking at specific procedures.  

• In Connecticut, a single practice performing breast reduction surgeries has routinely secured award payments exceeding $100,000 for a procedure Medicare reimburses at roughly $1,145 ​(Modern Healthcare, 2025)​.  

• And in Idaho, a facility sought IDR payments topping 1,000 percent of Medicare, including a $2,872 bill to treat a runny nose—a service that typically bills for $376. 

These extreme cases show how arbitration can turbocharge prices and push avoidable costs back onto health plans, driving up premiums and employers’ costs. For self-funded employers, the impact is even more direct: a few high-dollar IDR cases can significantly increase claims costs. 

Wellmark Blue Cross and Blue Shield is working to keep premiums stable and ensure members have dependable, high-quality health care by: 

• Adjusting provider reimbursement rates so payments reflect real market conditions 

• Working to assure fair standards are applied in IDR proceedings 

• Ensuring hospitals maintain in‑network access for hospital‑based services 

• Expanding programs that reward high-quality, efficient health care 

Businesses can help shape health care costs too: stay informed about IDR trends and engage in advocacy that supports fair, sustainable reimbursement. Together, we can simplify the health care experience and keep coverage affordable. 

​​References 

​​Blue Cross of Idaho. (2025, November 17). Blue Cross of Idaho Asks the Idaho Department of Insurance to investigate Post Falls ER & Hospital's Use of the Federal No Surprises Act. Retrieved from Blue Cross of Idaho: https://m.bcidaho.com/news-releases/2025-1117-blue-cross-of-idaho-asks-doi-for-investigation-of-post-falls-er-and-hospital 

​CMS. (2024, February). What You Should Know About Provider Networks. Retrieved from Centers for Medicare and Medicaid Services: https://www.cms.gov/marketplace/outreach-and-education/what-you-should-know-provider-networks.pdf 

​CMS. (2025). Federal IDR public use files and supplemental tables. Retrieved from Centers for Medicare & Medicaid Services: https://www.cms.gov/nosurprises/policies-and-resources/reports 

​CMS. (n.d.). About Independent Dispute Resolution. Retrieved from Centers for Medicare & Medicaid Services: https://www.cms.gov/nosurprises/help-resolve-payment-disputes/payment-disputes-between-providers-and-health-plans 

​HealthAffairs. (2025, August 25). The Substantial Costs Of The No Surprises Act Arbitration Process. (K. W. Jack Hoadley, Ed.) Retrieved from HealthAffairs: https://www.healthaffairs.org/content/forefront/substantial-costs-no-surprises-act-arbitration-process 

​KFF. (2024, March). No Surprises Act arbitration: Volume and outcomes. Retrieved from Kaiser Family Foundation.: https://www.kff.org/ 

​Modern Healthcare. (2025, December 1). Fixing the costly loopholes undermining the No Surprises Act. Retrieved from Modern Healthcare: https://www.modernhealthcare.com/providers/mh-fixing-the-costly-loopholes-undermining-the-no-surprises-act/