The promise was simple: end surprise medical bills and protect people from unexpected, often devastating healthcare costs. For millions of Americans, the No Surprises Act has done exactly that. Many patients are no longer shocked by a trip to the mailbox because they do not find an unexpected medical bill waiting there. But as often happens in American healthcare, solving one problem has exposed another.
The law’s arbitration system, meant to fairly resolve payment disputes between insurers and providers, has become a highly profitable industry, CBS News found. Instead of patients being caught in the middle of billing disputes, insurers and providers now battle behind the scenes over reimbursement rates. Arbitrators are deciding those disputes, often awarding payments well above typical market rates. The consequences extend far beyond insurers’ balance sheets.
According to industry researchers, insurers have been ordered to pay hundreds of dollars for routine laboratory tests that would ordinarily cost between $10 and $30. In one instance, a plastic surgeon received more than $400,000 through arbitration for a breast reduction procedure. The insurer said it had previously paid between $6,000 and $30,000 for the same operation.
While these disputes may appear to be private financial battles between corporations and medical providers, the costs ultimately land somewhere. Much of this additional spending comes from employer-sponsored health plans, which cover more than half of Americans. When healthcare costs rise, employers often respond with higher premiums, larger deductibles, increased employee contributions, or smaller benefit packages. In other words, workers may end up paying for arbitration awards they never see and disputes they never knew existed.
The No Surprises Act addressed a real problem. Patients should not be punished because an anesthesiologist, radiologist, or emergency physician happened to be outside their insurance network. Few would argue otherwise.
But designing a system that both protects patients and controls costs is more complicated. The arbitration process was intended to provide a neutral way to resolve disagreements. Critics argue that it has incentivized providers to pursue increasingly aggressive payment claims and transformed dispute resolution into a profitable business.
For people already struggling with rising healthcare expenses, the findings raise uncomfortable questions. If surprise medical bills are disappearing but insurance costs continue to climb, has the financial burden truly been eliminated? Has it simply been shifted elsewhere?
The answer may determine whether the No Surprises Act remains a model of consumer protection or becomes another example of how healthcare reforms can have unintended consequences. Protecting patients from unfair bills is a worthy goal. The challenge now facing policymakers is ensuring that protection does not come at the expense of affordability for the very people the law was designed to help.
Sources:
Bannow, Tara. “House Democrat Seeks to Scrap No Surprises Act’s Costly Arbitration Process.”STAT, 8 Oct. 2026,https://www.statnews.com/2026/10/08/house-democrat-proposes-change-to-no-surprises-act-arbitration-process/
Rappaport, Samantha, et al. “No Surprises Act Shielded Patients from Big Medical Bills. Now Its Arbitration System May Be Raising Costs.” CBS News, 7 Oct. 2026, https://www.cbsnews.com/news/no-surprises-act-medical-bills-arbitration-system-loophole/