The IDR Whitepaper

1. Introduction: The Problem

The No Surprises Act (NSA), which took effect on January 1, 2022, was designed to address a longstanding problem in U.S. healthcare: insured patients were getting hit with large, unexpected bills from providers they had not chosen. The problem had gotten so widespread that by 2017 18% of emergency visits and 16% of in-network inpatient hospital stays included at least one out-of-network charge.[1] When a provider is out-of-network, meaning they have no contracted rate with the patient's insurer, they were historically permitted to balance bill the patient for the gap between their charges and what insurance paid, commonly known as surprise or balance billing. These surprise bills could range from a few hundred dollars for ancillary services to tens of thousands of dollars for serious out-of-network hospital episodes.[2] The No Surprises Act prohibited this practice, and was hailed as a major win for consumer protection.

The federal law is built on state-level precedents, the two earliest examples being New York's 2015 Financial Services Law, the nation's first surprise-billing statute, and California's AB-72 (2017). After New York implemented its surprise billing law, studies found the law substantially reduced consumer out-of-network surprise bills while preserving access to care and functioning provider networks, helping establish the model later adopted in the federal NSA.

Surprise billing could happen accidentally for any provider, group, or health system providing emergency care. For example, a provider contracted with a local hospital could be diligent about contracting with every major local payer and still treat a traveler with a small employer-sponsored plan, or a patient whose rental network or narrow-network product the practice may never see again. For a surgeon taking occasional trauma call, out-of-network commercial insurance scenarios may be rare, but for emergency physicians, anesthesiologists, radiologists, and hospital-based surgical teams, out-of-network patients are a daily reality.

By the late 2010s, certain groups had decided to turn this out-of-network accident into a lucrative financial opportunity. Private-equity-backed groups like Envision, TeamHealth, Radiology Partners, and SCP Health saw what many physician groups did not: emergency medicine was not just a profession, but an ideal business because of one key feature: a captive customer. Doctors who run outpatient offices often sign less-than-ideal insurer contracts to guarantee patient flow. They need network participation because patients can choose another dermatologist, orthopedist, imaging center, or surgical practice. Emergency and facility-based staffing groups do not have the same demand problem. Patient flow is nearly guaranteed by the hospital, the emergency department, or the operating room schedule, regardless of whether the physician group has a contract with the patient's insurer.

An emergency patient cannot shop for the emergency physician, anesthesiologist, radiologist, pathologist, or assistant surgeon. That lack of choice made the emergency room the most obvious target for sophisticated financial groups. The physician group staffing the ED could remain out-of-network with major insurers, bill separately, and use the patient's lack of choice as a financial strategy. The balance bill gave staffing groups leverage beyond the individual patient. While insurers could legally refuse to pay the full charge, and often did, the resulting patient bill still created complaints, employer pressure, network-adequacy scrutiny, and reputational damage for plans selling in-network coverage that did not actually include in-network doctors that patients were forced to use. Envision's EmCare became the emblematic case. Yale/NBER researchers found that after EmCare entered a hospital, out-of-network billing rates rose by 81% to 90% and physician services became 43% more likely to be coded at the highest-intensity emergency billing level.[3] The playbook was simple: control a hospital-based specialty the patient cannot shop for, stay out of network, and let the balance bill do the negotiating.

That is why the politics became so ugly. The No Surprises Act was passed because a market failure had been turned into deliberate financial engineering. Private-equity-backed staffing firms had found a narrow but extremely valuable wedge in the healthcare payment system: the unsuspecting patient as the collection target.

When Congress moved to close the increasingly obvious injustice, the interests that depended on out-of-network balance billing began to panic. Despite the questionable billing practices, hospital ED staffing groups were still providing necessary life-saving work, and Congress recognized that without fair pay, emergency departments cannot run effectively. The central policy question was simple: how should the out-of-network doctor get paid without the patient getting caught in the middle?

2. The Political Fight

Insurers and employers wanted a benchmark. Their preferred answer was a payment amount tied to the local median in-network rate. In their view, an out-of-network provider at an in-network facility should be paid roughly as if the provider were contracted with the plan. That approach would make plan liability predictable, lower employer health-benefit exposure, and prevent out-of-network providers from using patient leverage to demand higher rates.

Provider groups and private-equity-backed staffing firms of course wanted no limit on surprise billing. But if a bill were to be passed, they pushed for arbitration on a case-by-case basis, arguing that lower payments could lead to doctor shortages, hospital closures, and loss of access to medical care, particularly in rural and underserved communities. Their economic interest was narrower and more urgent: a hard benchmark would have ended the arbitrage. No balance bill meant lower payments, and these groups demanded an ability to contest the insurer's number.

The fight, in essence, was about whether the benchmark would be the answer or merely the opening bid.

A hard benchmark would have turned the arbitrage into ordinary contracted-rate economics: no balance bill, and no way to secure multiples above market to keep revenue high. A hybrid system, by contrast, would protect the patient while still preserving a path to higher payment. The benchmark would shape the insurer's initial payment, but if the provider disagreed, the fight could move into arbitration.

After the bill was introduced, Doctor Patient Unity, funded by TeamHealth and Envision, spent roughly $57 million on ads opposing benchmark-based surprise-billing legislation and warning against government "rate setting."[4] A separate secretive group spent more than $2.3 million in television ads in 2019 targeting vulnerable senators and urging voters to reject legislation that would cap out-of-network charges.[5]

Insurers are also no strangers to Washington lobbying. AHIP alone spent about $9.5 million on federal lobbying in 2019, Blue Cross Blue Shield Association spent $1.89 million in the second quarter of 2019, and the payer-employer Coalition Against Surprise Medical Billing launched its own multimillion-dollar ad campaign supporting a benchmark approach.[6] Their argument was framed as consumer-friendly: benchmark payments would end surprise bills and keep premiums low. Their economic interest was also obvious. A hard benchmark, set by insurers themselves, would lower costs and give insurers a clear defense against “stay-out-of-network” providers demanding higher rates.

For insurers, surprise billing was one front in the much larger multi-trillion-dollar health-policy war. PE-backed staffing groups, on the other hand, were defending their core revenue model. Doctor Patient Unity's campaign was highly targeted and aggressive: more than $13 million by late August 2019, $28 million by mid-September, and roughly $57 million over the broader fight.[7] The payer side had money, but the PE-backed provider side had a narrower objective, a more unified economic incentive, and a simpler message: stop unfair "rate setting" or risk hospital staffing shortages.

The final law was a compromise: an initial benchmark payment, with arbitration available if either side wanted to dispute it. The NSA protected the patient, and insurers would use the benchmark, known as the Qualifying Payment Amount (QPA) to determine patient cost-sharing and shape the initial payment. Because the QPA was calculated by insurers themselves, based on their own view of the median in-network rate, the law preserved a dispute path through Independent Dispute Resolution (IDR) if providers or health systems disagreed with the payment.

In short, the NSA ensured the patient is protected, but the pathway for economic dispute was created and preserved.

3. NSA Eligibility

The No Surprises Act that passed is a sprawling federal framework that combines patient protections, limits on balance billing, penalties for noncompliance, and created the IDR process for resolving payment disputes between plans and out-of-network providers.

The disputes that the No Surprises Act covers can be understood in four practical buckets:

• Emergency services.
• Air ambulance services.
• Out-of-network ancillary or facility-based providers at an in-network facility.
• Scheduled out-of-network principal providers at an in-network facility where the patient did not validly waive NSA protections.

The first bucket is emergency care. This is the cleanest NSA scenario because the patient cannot safely shop for network status before stabilization. Emergency services are protected even if the facility is out of network, the treating provider is out of network, or both. Post-stabilization services remain protected in many cases unless the patient can safely transfer and give valid notice and consent.

The second bucket is air ambulance. Air ambulance fits the same no-choice “surprise” logic as emergency care: the patient is not comparison-shopping transport vendors in the middle of an emergency. The strange part is what the NSA excludes. Ground ambulance services are generally not covered by the federal NSA balance-billing protections, even though a patient calling 911 has no more practical ability to choose an in-network ground ambulance than an in-network helicopter.[8]

The third bucket is ancillary and facility-based care, for both emergency and non-emergency care. This is where much of the recurring IDR volume lives. No patient chooses the emergency department physician, the radiologist who reads the scan, the pathologist reviewing tissue, or the anesthesia team assigned to an in-network ASC or hospital case.

Federal guidance treats these services similarly to emergency services for exactly that reason: for many ancillary services, providers generally cannot use notice and consent to make the patient waive protection, and are sometimes not even patient-facing; specialists like pathologists and radiologists can perform services in the background. These claims are often lower-dollar individually, but performed at high volume. This is where much of the repeat IDR volume lives.

The fourth bucket is the least understood and most legally delicate: scheduled non-emergency care at an in-network facility, an out-of-network provider, and the patient did not validly waive their balance-billing protections. This is technically within the NSA when the statutory conditions are met: in-network facility, OON provider, and no valid waiver. Practically, it sits furthest from the ordinary meaning of "surprise." The patient may have scheduled the surgery, chosen the surgeon, and known the facility. Congress protected it because network status is not meaningfully chosen at the individual-provider level inside a facility. A patient can choose an in-network hospital or ASC and still be assigned an out-of-network assistant surgeon, anesthesiology group, radiology group, pathology group, hospitalist, or other facility-based clinician without a practical ability to shop, negotiate, or substitute providers. The surprise is not the existence of the visit; it is the hidden network status embedded inside the visit.

4. QPA Explanation

Before any dispute comes into play, a benefit is calculated, known as the Qualifying Payment Amount, or QPA for short.

For NSA-protected services at an in-network hospital or ASC, the patient's responsibility is calculated using the in-network cost-sharing rules, generally off the QPA or other applicable recognized amount, even though the rendering clinician is out of network. The patient's ordinary OON deductible, coinsurance, or out-of-network benefit design does not become the provider's collection path unless the patient validly waived NSA protections where waiver is legally allowed. The remaining dispute is between the plan and the OON provider, not between the provider and the patient.

For the provider, the benefit is supposed to be calculated based on the in-network median in a given geographic area.

In practice, the benchmark known as the Qualifying Payment Amount, or QPA, often fails as a true median in-network proxy. Insurers calculate it themselves, disclose little about the underlying rate pool, and have strong incentives to keep it low. One analysis found QPAs below the true median in 65% of disputes, while Avalere identified "ghost" contract rates as a structural way specialty QPAs can be depressed.[9] "Ghost" rates arise when insurers add irrelevant clinical codes into a physician's contract to keep the median lower. For example, a cardiologist may have urology codes contracted to be paid at 10% of the median rate, but never perform those services, thereby reducing the plan's median contracted rate. The Texas Medical Association has won multiple federal challenges to the methodology, but in the absence of meaningful enforcement, insurers continue to set the benchmark against themselves.[10]

The federal agencies initially tried to implement IDR with strong weight on the QPA. That would have pulled the compromise back toward a benchmark system: providers could challenge the insurer's number, but only in the shadow of the QPA. Provider groups challenged those rules, and the Texas Medical Association litigation weakened the QPA presumption, requiring IDR entities to consider the QPA alongside other statutory factors rather than treating it as the default answer.[10]

Once the QPA became one factor rather than the controlling factor, IDR became far more valuable. Providers could argue that the insurer's benchmark understated true market compensation, submit evidence on acuity, provider training, case complexity, market share, prior contracted rates, and good-faith contracting history.

5. Open Negotiation

After a provider or health system receives an initial payment, QPA, or denial, they can dispute the payment through a 30-business-day open negotiation period. If the parties do not resolve the dispute, either side has four business days to initiate IDR. The parties then select a certified IDR entity, submit final offers with supporting evidence, and the IDR entity chooses one offer in full. This is baseball-style arbitration: there is no splitting the difference and no independently crafted middle number.

Open negotiation was intended to resolve most disputes cheaply and quickly. In practice, it functions less like a settlement channel and more like a mandatory pre-filing step before IDR. CMS does not publish clean statistics showing how many disputes actually settle during open negotiation, and based on MedRes’s experience and conversations with other IDR vendors, true negotiated settlements appear to be rare.

The available insurer-side data supports that there is a large pre-IDR drop-off. AHIP/BCBSA estimated that in 2024, 24% of NSA-eligible claims entered open negotiation, while only 6% entered Federal IDR arbitration.[11] Put differently, roughly three-quarters of claims that entered open negotiation never reached IDR. AHIP’s label of “resolved in open negotiations” does not distinguish real settlements from abandoned claims, missed deadlines, or disputes that providers decided were not worth pursuing.

In practice, this creates a predictable payer strategy: acknowledge receipt of the open negotiation notice, uphold the original payment, and wait to see whether the provider has the operational capacity and economic incentive to escalate to IDR. For many providers, the friction, filing costs, and administrative burden are enough to make the dispute disappear without the insurer ever moving off the initial payment. When only 6% of NSA-eligible claims enter IDR, insurers can rationally treat many open-negotiation notices as low-risk administrative noise rather than real litigation-style threats.

6. IDR

Once a dispute reaches IDR, the structure changes from negotiation to a game of financial chicken. Each side wants to submit the most aggressive number it can without becoming the number the arbiter views as less credible. IDR is baseball-style arbitration: each side submits one number, and the IDR entity must choose one offer in full.[12] There is no split-the-difference outcome. That creates an incentive for both sides to anchor hard while daring the other side to look unreasonable first. Insurers can come in low around QPA. Providers can come in high around billed charges, specialty benchmarks, acuity, complexity, or prior rates. The insurer risks losing if its QPA-based offer looks artificially depressed; the provider risks losing if its offer looks untethered from any defensible market rate.

The IDR entity must consider the QPA and other statutory factors, including provider training and experience, quality measures, patient acuity and complexity, market share, facility teaching status and case mix, good-faith contracting efforts, and certain prior contracted rates. Once the decision is issued, the losing party must pay the awarded amount within 30 calendar days.[12]

Before the NSA, the shocking number was the patient's surprise bill. In IDR, the number that can shock the arbiter is often the insurer's low payment offer. The New York Times article used the phrase "reverse sticker shock" to describe the phenomenon where arbitrators see extremely low plan offers for complex procedures. In turn, they may view similar eyebrow-raising provider offers in the opposite direction as the more reasonable side of the dispute.[13] The provider's high number is not evaluated in isolation; it is evaluated against an insurer-calculated QPA that may itself be depressed.

The flow of money to certified IDR entities is the key to understanding the incentive structure of the arbiters' decisions. They are fee-dependent businesses paid to review IDR cases. CMS reported that providers initiated over 99% of IDR disputes in 2024, largely because insurers have little reason to arbitrate against their own rates. This creates a financially symbiotic relationship between high-volume provider filers and the entities reviewing their cases. Arbiter fees can range from $425 to $1,150 per case and The New York Times reported that fees totaled $885 million from 2022 to 2024, underscoring that IDR entity revenue scales with dispute volume, putting the IDR review business on track to become a nine-figure industry as volume continues to scale.[13][14]

The risk of entities consistently siding against providers is clear: high-volume filers can easily divert the funds toward entities they view as more favorable. Over time, the market can select for arbiters whose decisions keep the filing side willing to return.

In practice, this process results in high win rates for providers and systems. Through the first half of 2025, providers won 88% of disputes, up from 85% in 2024 and 81% in 2023.[12][14]

The median payment determination rose from 327% of QPA in 2023 to 445% in 2024. In surgical specialties, the median prevailing offer in 2024 ran 1,716% to 1,818% of QPA, roughly eighteen times the benchmark. Even when insurers prevailed, their winning offers averaged about 110% of QPA, meaning successful insurer defenses still often landed above the benchmark they calculated.[12]

7. Unintended Pro-Provider IDR Consequences

The high win rates and awards have created two important inversions in high-value scheduled procedures. The first is that some scheduled out-of-network procedures can be routed into IDR when performed at an in-network facility without a valid notice-and-consent waiver. The second is that surgical assistants can sometimes receive higher IDR awards than the lead surgeon on the same case.

Before the NSA, an out-of-network surgeon or facility-based specialist had a relatively straightforward path to patient collections: bill insurance, collect from the patient for the remaining balance (subject to any insurance or state law limits), or negotiate a patient-payment arrangement. After the NSA, that path narrowed. For protected facility-based care, the provider generally must either obtain valid notice and consent where legally available, or accept that the remaining payment dispute belongs with the insurer through IDR rather than with the patient.

If IDR awards routinely exceed both the insurer's initial payment and what a patient could realistically pay, the incentive can flip. For orthopedics, neurosurgery, plastics, spine, and similar high-value specialties, the more valuable path may be to perform the case at an in-network facility, treat the insurer's initial payment as partial payment, and pursue the payer through IDR rather than the patient for the balance. The patient is protected, but the provider has traded patient collections for a potentially richer arbitration claim.

The breast-reduction example highlighted by The New York Times is best understood as a consequence of IDR incentives.[13] Dr. Norman Rowe, a plastic surgeon whose website reportedly advertised breast reductions at roughly $15,000 to $25,000, was alleged by EmblemHealth to have accepted $30,000 or less for hundreds of breast reductions before the NSA. In 2024, according to the lawsuit described by the Times, he began performing EmblemHealth cases at hospitals that were in network with the insurer while he remained out of network, did not give patients the notice-and-consent waiver, and then pursued the payment disputes through IDR. The Times reported that Rowe-related practices filed more than 6,000 arbitration claims and won more than 85% of them. In five elective breast-reduction cases detailed in the lawsuit, the practice allegedly won more than $1.4 million total: the first case, in November 2024, produced a $112,500 payment covering Rowe and an assistant surgeon, while a late-December 2025 case produced separate surgeon claims totaling $440,000.

That example is not representative of the typical emergency, radiology, anesthesia, pathology, or facility-based claims that make up the core NSA universe. But it exposes the core incentive: once the patient is removed from the payment fight and the arbiter must pick one number, out-of-network insurance payments through IDR can exceed both the insurer's ordinary contracted payment and what patient balance billing could realistically produce. High-value scheduled procedures therefore become the clearest version of the IDR arbitrage.

The breast-reconstruction assistant example is even more specific. In the Times' June 2026 surgical-assistant article, Dr. Charles Pierce requested $100,000 for assisting on the right side of a cancer-related breast reconstruction after UnitedHealth initially paid him $105.[15] His submission emphasized the patient's complex surgical history, his own training and experience, and prior arbitration awards for similar work. The arbitrator selected Pierce's offer, producing a $100,000 award for a 4.5-hour operation, or more than $22,000 per hour. Pierce also won an additional $11,000 for an anesthesia injection, bringing his total from that operation to $111,000. The in-network lead surgeon, Dr. Lisa Schneider, was paid $2,707 for the entire operation, and Pierce's separate dispute for assisting on the left breast was found ineligible. Both physicians worked in the same practice as Rowe.

The takeaway is more nuanced than the Times' abuse narrative. Low or formulaic payer offers can become provider evidence once the dispute reaches arbitration, and payer non-engagement during open negotiation can strengthen the provider's story. The provider is no longer merely asking for an above-market payment; it is arguing that the payer's number was nominal, the open-negotiation process failed, and the higher offer is supported by complexity, training, and prior IDR outcomes. Surgical-assistant IDR uses the same structure, but creates a sharper optics problem because the assistant's award can exceed the lead surgeon's contracted payment by orders of magnitude.

Similar to aggressive balance billing practices of the past, IDR takes advantage of an operational arbitrage and the game theory of baseball arbitration. If managed properly at scale, IDR becomes a lucrative business model.

8. Understanding IDR Win Rates and Filing Dynamics

In 2022, agencies originally estimated that roughly 17,333 claims per year would be submitted to the Federal IDR process. Actual volume has been two orders of magnitude higher: CMS data shows 2.56 million disputes initiated in 2025, and the pace is still accelerating. Based on early 2026 filing data, the system is on track for roughly 3.44 million disputes in 2026, an additional increase of 36% since 2025.[16][14]

Between poor QPAs and high provider win rates, the number of claims filed by the second half of 2025 was breaking the system. The backlog formed because filings quickly outpaced the agencies’ original assumptions, while IDR entities were overwhelmed not only managing payment determination, but also sorting out ineligible claims from eligible ones. Those procedural disputes created a queue before any payment determination could be made.

CMS has since increased throughput, and is working towards improving the system.. The Departments expanded the certified IDR entity roster from 13 to 15 in June 2025 and from 15 to 16 in January 2026, expressly describing those additions as steps expected to increase IDR throughput.[17] New filings continue to arrive at a pace that keeps the process under pressure. CMS bimonthly reports show 1.37 million disputes initiated from July through December 2025, roughly 79 times the original annual estimate.[16] By March 31, 2026, CMS reported more than 5.3 million closed federal IDR disputes, with over 4.1 million closed by payment determination.[14]

The present-day numbers show improvement, however the system is still under strain. As of May 31, 2026, CMS reported 6.34 million total disputes initiated since launch and 5.86 million closed, leaving roughly 473,000 disputes still not closed. In May 2026 alone, 287,520 new disputes were initiated while 283,437 were closed. This is far better than the early backlog period, but the system has grown far beyond what Congress expected. The IDR process has become a high-volume claims adjudication system, not the narrow arbitration backstop Congress originally expected.

9. Why PE Dominates

The No Surprises Act ended a single, visible harm: the unexpected balance bill. It did not destroy the economic model underneath it. The private-equity-backed staffing firms that depended on out-of-network balance billing lobbied for an arbitration mechanism, got it written into the final law, and then adapted their business model around the new rules. The final law did include a benchmark: the QPA anchors patient cost-sharing, informs initial payments, and remains a required factor in IDR, but the benchmark is not the final payment. The staffing-company victory was preserving the right to contest that number.

IDR rewards infrastructure. A provider has to detect the underpayment, verify NSA eligibility, calendar the open-negotiation and IDR deadlines, submit the open negotiation notice, select or respond to the IDR entity, prepare evidence, calculate the offer, manage fees, track determinations, and chase payment. That is not a normal billing-office workflow. It is a specialized recovery operation.

PE-backed groups were built for that. They have centralized revenue-cycle teams, national payer data, capital to advance fees, legal and policy sophistication, and enough claim volume to learn quickly. They turned IDR from a case-by-case fight into a reliable payment channel.

The evidence is clear when filing concentration is examined. Four organizations, three of which are PE-backed, now initiate over 50% of all IDR disputes nationwide, staying deliberately out of network and running underpayments through arbitration at industrial scale to recover multiples above the initial offer. Subsequent analyses found PE-backed provider groups dominating IDR volume and, in emergency-services disputes, winning more often and at higher amounts than non-PE providers.[18]

Private equity had spent years consolidating emergency medicine, anesthesiology, radiology, and other facility-based specialties because those specialties had hospital-controlled patient flow and payer-contracting leverage. The NSA damaged the old leverage tool by removing the patient-facing balance bill, but IDR gave sophisticated operators a replacement path. It is less lucrative than unconstrained balance billing, and it has not saved every overleveraged platform from distress, but it preserved enough upside for the largest groups to keep fighting claims at scale.

The patient-facing collection weapon was gone, but PE groups managed to preserve the more important economic option: the ability to reject the insurer's benchmark-based number and force a separate pricing process. The door that was built for consumer protection is now primarily used by sophisticated operators, while the independent practices that need protection most often do not use it at all.

10. Why Practices and Hospitals Miss It

On the other hand, the rest of the market tells a very different story. Most eligible NSA claims are written off before they ever enter the process.

Among NSA-eligible out-of-network claims, only 6% enter arbitration. According to a 2025 AHIP and Blue Cross Blue Shield Association survey, 76% of NSA-eligible claims are accepted at the insurer's initial offer, 18% are put through open negotiation, but only 6% enter IDR. In 2024, that translated to roughly 1.2 million IDR cases filed against an estimated 20 million eligible claims.[11]

The 94% that never reach arbitration represent the real market failure. Providers accept depressed initial offers, settle informally for less than IDR might award, or miss the window entirely. The recourse exists, but the workflow clearly does not.

Several structural factors can help explain the gap. The first is timing. Standard revenue-cycle workflows surface underpaid claims through 90-day AR aging reviews, but the NSA's IDR clock runs much faster: 30 business days for open negotiation, then four business days to file. By the time a routine AR review flags an underpayment, the recourse has already expired.

The second is expertise. The NSA is a relatively new law, the regulatory framework is still being shaped by litigation, and most billing teams are already overwhelmed by core RCM work. HFMA reported that initial claim denial rates climbed to nearly 12% in 2024, forcing providers to resubmit more claims, invest more resources to overturn denials, and spend more to pursue payment.[19] MGMA's January 2026 practice poll found denials and appeals were the largest reported revenue-cycle leak, cited by 48% of medical group leaders.[20]

NSA underpayments are even trickier to deal with. They do not arrive as denials with a clear $0; they arrive as quiet underpayments buried in EOB fine print, easy to overlook in batch processing. Furthermore, some insurance companies are non-compliant and will fail to include a disclosure that the claim is eligible for dispute. Without a trained team knowing what to spot, these claims are often overlooked.

IDR adds another specialized workflow on top of an already strained denial-management function, which helps explain why the competency is concentrated among sophisticated billing operations rather than ordinary practice billing teams.

The third is volume distribution. Insurers can spread underpayments thinly across providers, geographies, and plan products. A practice may be in network with the dominant local plans but still see rare out-of-state commercial plans, rental-network products, narrow-network products, travel claims, or employer plans where the provider is unexpectedly out of network. Each underpayment is small enough to look like ordinary RCM noise; in aggregate, the payer keeps the spread because no single practice sees enough of the pattern to build a process around it.

The fourth is claim economics. For emergency-staffing groups handling high consult volume across hospitals, individual OON encounters are common but often low-dollar, sometimes not worth pursuing on a per-claim basis unless they can be batched or processed at scale.

Independent providers face a different problem. Many take hospital call to maintain admitting privileges, preserve referral relationships, or support local coverage. Out-of-network claims are treated as the cost of doing business to maintain privileges. If the payment is low but not zero, it may never rise to the level of executive attention. A plastic surgeon taking call for a few days a month at a local level III trauma bay may only see a handful of OON claims a year, and will still get paid for those claims, but at a fraction of what is recoverable through IDR. The practice absorbs the gap because the underpayment is not understood as a recoverable asset.

Compliance friction creates a separate institutional barrier. Hospitals and larger groups often cannot move quickly with outside help because PHI access, BAAs, security reviews, data exports, and vendor onboarding slow the process down. By the time the organization is comfortable sharing enough data to evaluate IDR, the oldest claims may already be stale.

This is why so few claims are pursued even though the formal win rates are so high. A single payer can underpay thousands of providers and rely on the fact that most billing offices will never identify the claim as NSA-eligible, pursue the open-negotiation deadline, package the evidence, risk the filing fees, and track post-award payment. IDR converts underpayment into recoverable money only when a practice or health system has a workflow capable of seeing the underpayment before the deadline expires.

The independent surgical practice billing a couple dozen procedures a month in Georgia faces the same QPA games as the PE-backed radiology group filing two hundred thousand cases a year. The difference is not eligibility, statutory recourse, or expected outcome; it is simply execution capacity. When independent practices do file, they can win at similar rates and recover similar multiples as the PE-backed mega-groups. The IDR system is not biased toward consolidated providers, it is biased toward operationally sophisticated ones, and sophistication is separable from consolidation.

11. What Comes Next

The next fight is enforcement. The practical question post-determination is whether a winning award is actually paid on time, in full, and without shifting costs back to the patient. CMS's December 2025 complaint and enforcement summary does not publish a clean payer-level compliance denominator, but it does show a meaningful enforcement signal: from January 1, 2022 through December 31, 2025, CMS received 39,999 health-insurance-market-reform complaints, 14,799 closed complaints involved NSA issues, and the top issuer-side NSA complaint categories included 844 QPA complaints, 664 complaints for late payment after an IDR determination, and 253 complaints for failure to send an initial payment or denial within 30 days. Closed complaint investigations produced about $30 million in monetary relief.[21]

The provider community is now pushing Congress and the agencies to close that enforcement gap. In April and May 2026, the AMA, all 50 state medical societies, and dozens of specialty organizations urged federal officials and Congress to strengthen NSA enforcement, pointing to late payment, partial payment, nonpayment, patient cost-shifting after IDR wins, attempts to reopen closed determinations, and persistent QPA opacity.[22] The core complaint is simple: if an IDR determination is binding but nonpayment carries little practical consequence, the statute's payment remedy becomes optional for plans with enough leverage and delay tolerance.

The No Surprises Act Enforcement Act was introduced in both chambers on July 23, 2025.[23] The bill would increase penalties for balance-billing-rule violations, require payment notifications after IDR determinations, create additional penalties for late payment or nonpayment, add interest, and require more frequent transparency reporting on audits and enforcement actions. The proposed late-payment remedy is deliberately punitive: in addition to the underlying payment, the delinquent party would owe an amount tied to three times the difference between the initial payment and the out-of-network rate, plus interest. If enacted, that would change the post-award calculus from "delay is free" to "delay is expensive."

The second fight is access economics. In June 2026, CMS announced that the Federal IDR administrative fee would fall from $115 to $15 per party per dispute for disputes initiated on or after June 11, 2026, an over-85% reduction.[24] That materially changes the marginal math for lower-dollar claims. A claim that was not worth risking a $115 non-refundable administrative fee may become worth screening, especially if it can be batched with similar claims. The Departments expressly recognized that lower fees may increase Federal IDR utilization and projected roughly a 30% increase in the number of administrative fee payments as a result of the lower fee.

But the utilization projection may be too optimistic. The administrative fee is only the smallest part of the filing economics. The non-refundable government fee is now $15 instead of $115, but eligible disputes still require each side to front the certified IDR entity fee by the offer deadline, and those fees commonly run in the hundreds of dollars and can exceed $1,100. The prevailing party gets the certified IDR entity fee returned, but the non-prevailing party bears it, and even successful providers may have to wait for reimbursement. In practice, the fee cut reduces the cost of being wrong on eligibility, but it does not remove the main cash-flow and downside-risk barrier. Providers will still be wary of weak or isolated low-dollar claims where the upside is small, eligibility is uncertain, or batching is unavailable. The fee cut expands the universe of claims worth screening; it does not eliminate the need for disciplined triage, batching logic, and confidence in expected recovery.

For independent practices, stronger enforcement would matter more than another round of process tweaks. The operational burden of IDR is already high and unlikely to change in the near future: eligibility screening, open negotiation deadlines, batching logic, evidence packages, IDRE fees, payment tracking, and follow-up. If the final award still requires a second collection campaign, smaller practices are pushed out of the system even when their claims are legally valid and economically strong.

The future of IDR will therefore turn on whether the federal government makes arbitration determinations self-executing enough for ordinary providers to use, or leaves the system as a specialized recovery channel for the few organizations with the staff, capital, and persistence to chase payment after winning.

References

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