One of the No Surprises Act’s chief authors introduced new legislation Thursday to amend its “broken” arbitration system for settling out-of-network payment disputes between providers and payers.
Rep. Frank Pallone, D-New Jersey, said the landmark 2020 healthcare bill was largely successful in protecting patients from unexpected medical bills but has opened the door to “a few bad actors—largely backed by private equity … gaming the system, creating backlogs, delaying payments and driving up premiums.”
A baseball-style Independent Dispute Resolution (IDR) process that was introduced has seen arbitration firms overwhelmingly rule in favor of the rates proposed by providers, his office said, particularly in the wake of court decisions that have adjusted IDR guidelines in their favor.
In his new bill, the arbitration system would be replaced with market-based benchmarks based on median in-network rates, with payments to be issued within 30 days of a filed claim.
“The Lower Premiums, Faster Payments Act will replace the broken arbitration system with a fair and timely payment process that lowers people’s health insurance premiums,” Pallone said in a statement.
Analyses and news reports have painted a broadly similar picture of the IDR arbitration system, which has far exceeded Congress’ expectations with $22.4 billion in total costs at the end of 2025.
Providers’ high arbitration win rate and flood of disputes they've filed, aided by third-party vendors, have frustrated payers, prompting them to respond with targeted policies and lobbying campaigns aimed at overhauling what they call a broken system. A recent analysis from the ERISA Committee attributed elevated insurance costs for employers directly to the arbitration process.
Providers, in contrast, have argued that the results stem from starting points for negotiations brought by payers, qualified payment amounts that have been flatly off the mark. They’ve also alleged that payers have been dragging their feet when it comes time to pay out.
Pallone is positioned to become chairperson of the House Energy and Commerce Committee should Democrats take control of the chamber after midterms, opening up a runway for his bill to move through Congress. He recently told CBS News that he wasn’t a fan of including the arbitration process in the NSA, but “had no choice” to include it "if we wanted to actually get rid of surprise billing."
"I knew it was not going to go well, but I didn't know it was going to be this bad," he added.