No Surprises, New Developments: CBO Calls for Research on the No Surprises Act

The Congressional Budget Office (“CBO”) recently issued a request for additional research regarding the long-term effects of the No Surprises Act (“NSA”), highlighting a growing policy debate surrounding one of the law’s central questions: how has the federal Independent Dispute Resolution (“IDR”) process affected provider reimbursement and health care markets? While the law has succeeded in protecting patients from unexpected out-of-network costs, CBO is now seeking additional data regarding the NSA’s impact on provider reimbursement, network participation, and commercial insurance premiums. Notably, the publication arrives at a time when the federal IDR process has generated more than 3.4 million disputes, providers have prevailed in more than 80 percent of arbitrations – CBO’s own figure. For providers navigating that debate, the research questions CBO is asking – and those it is not – may matter as much as the answers.

A copy of the CBO’s publication is available here.

Background on the No Surprises Act

The NSA, enacted in December 2020, prohibits providers from balance billing patients for certain out-of-network services, including emergency services, air ambulance services, and certain services furnished by out-of-network providers at in-network facilities. Under the NSA, patients are responsible only for in-network cost-sharing amounts, while payment disputes between providers and payers are resolved through negotiation and, if necessary, the IDR process. When Congress enacted the NSA, policymakers anticipated that the law would reduce surprise medical bills while also affecting the leverage providers and payers possess during reimbursement negotiations. In its original analysis of the legislation, CBO projected that the NSA would reduce provider reimbursement rates for certain services, lower commercial insurance premiums, and ultimately reduce federal spending associated with health insurance subsidies. The agency’s latest publication revisits those assumptions.

Although the vast majority of eligible disputes – more than 94 percent – are resolved between the parties before ever reaching formal arbitration, that remaining fraction has generated a volume of IDR claims that has dwarfed original projections by every measure. Indeed, since the NSA took effect, however, the federal IDR process has produced results that differ significantly from many early projections. Providers have submitted disputes in volumes far exceeding original expectations – more than 3.4 million cases through mid-2025, against an initial CMS projection of roughly 22,000 per year – and have prevailed in more than 80 percent of arbitrations. At the same time, providers across numerous specialties have consistently reported that health plans continue to make reimbursement offers that fail to account for the statutory factors Congress directed arbitrators to consider. As a result, many providers have turned to the IDR process as the only available mechanism for obtaining fair reimbursement. The resulting arbitration outcomes have revealed something important: when disputes are presented to neutral decisionmakers applying the standards Congress enacted, provider offers are frequently selected over payer offers. Whether one views that trend as surprising or not, it raises a fundamental question that is often absent from policy discussions: if arbitrators are repeatedly rejecting payer reimbursement positions, should the focus be on the providers prevailing in arbitration – or on the reimbursement practices that are producing those outcomes?

It is against this backdrop that CBO has called for additional research into the law’s effects.

CBO’s Request for Additional Research

CBO acknowledges that the NSA appears to have achieved several of its primary patient-protection objectives. According to the agency, available evidence suggests that surprise billing has declined, patient cost-sharing obligations have decreased, and provider participation in insurer networks may have increased in certain specialties historically associated with surprise billing disputes. At the same time, CBO notes that several developments have prompted questions regarding the law’s long-term impact on reimbursement levels and commercial insurance markets. Most notably, the agency points to reports indicating that providers prevail in a substantial majority of disputes submitted through the federal IDR process and that arbitration awards often exceed the Qualifying Payment Amount (“QPA”) and certain other commonly referenced reimbursement benchmarks. The agency suggests that favorable arbitration outcomes could affect provider contracting decisions and reimbursement negotiations in ways that may ultimately influence commercial insurance premiums and federal health care spending.

Important Questions Remain Unanswered

What is notable, however, is not merely what CBO is asking, but what it is not asking. The agency’s research priorities are oriented almost entirely around the implications of provider success in arbitration – how favorable awards might affect provider leverage, contracting behavior, and premiums. Conspicuously absent is any corresponding inquiry into whether payer reimbursement practices are themselves contributing to the volume and outcomes of arbitration. This may simply be a matter of analytic framing – that CBO is focused on market-level effects rather than the conduct of individual parties. But framing is never neutral. When an agency directs scrutiny toward the consequences of provider victories while treating payer losses as unremarkable background, the framing itself reflects a set of assumptions about where the problem lies. Whether those assumptions are the product of incomplete data, institutional inertia, or something else, they are worth examining carefully as the research agenda takes shape.

Notably, CBO’s publication also stops short of drawing definitive conclusions regarding the NSA’s long-term effects. Instead, the agency repeatedly emphasizes the limitations of currently available data and the difficulty of isolating the effects of the NSA from broader market forces, including inflation, evolving provider contracting strategies, and pre-existing reimbursement trends. Yet the framing of the debate itself warrants examination. Much of the discussion surrounding the NSA has focused on the fact that providers prevail in more than 80 percent of arbitrations – a figure CBO itself cites. Yet comparatively little attention has been devoted to the corresponding reality that health plans lose more than 80 percent of those same disputes. Every provider victory necessarily reflects a payer loss, and every arbitration award represents the judgment of a neutral decisionmaker.

Viewed through that lens, provider success rates may reveal as much about payer reimbursement practices as they do about the operation of the IDR process itself. If arbitration outcomes are consistently favoring providers, one possible explanation is that arbitrators are routinely concluding that payer reimbursement offers are inadequate under the standards established by Congress. Yet that possibility often receives considerably less attention than concerns about the size of arbitration awards or the volume of disputes being filed. Similarly, although CBO notes the extraordinary volume of disputes submitted through the federal IDR system, the publication devotes relatively little attention to the question of why providers continue to pursue arbitration in such large numbers. Arbitration is expensive, time-consuming, and operationally burdensome. Understanding what is driving providers into this system may be just as important as studying what happens once they arrive there.

What’s Up Next? The Debate Over the NSA’s Long-Term Effects Continues

CBO’s request for additional research underscores a simple reality: many of the most important questions surrounding the NSA remain unanswered. CBO’s publication does not (yet) propose policy changes or reach definitive conclusions. Rather, it reflects the agency’s view that additional data is needed before the law’s broader impact can be fully understood. As that research develops, stakeholders should expect continued scrutiny of arbitration outcomes and their broader implications. But any meaningful evaluation of the NSA must examine not only the awards being issued by arbitrators, but also the reimbursement practices driving parties into arbitration in the first place. Otherwise, policymakers risk focusing on the outcomes while overlooking the conditions that produced them. The questions CBO chooses to ask – and those it does not – will shape the contours of that debate for years to come. Whether the federal IDR system is exposing longstanding deficiencies in payer reimbursement practices should be one of the central questions in the ongoing debate surrounding the NSA.

HaloMD is actively monitoring developments related to the No Surprises Act and its implementation. For additional insights into this and related regulatory developments, visit our News & Resources page.