The No Surprises Act has eliminated unexpected medical bills for patients, while its arbitration process has shifted many payment disputes between insurers and out-of-network providers into a formal system. Arbitrators must choose one side’s proposed rate, and the investigation found awards far above typical benchmarks in some cases. The volume of disputes greatly exceeded federal expectations, and both sides pay fees before a decision. Many awards are funded by employer-sponsored plans, creating the possibility of higher premiums or reduced benefits for workers. Rep. Frank Pallone has said he wants to reform arbitration, but the reporting identifies no enacted change or deadline.
TLDR: Patient protections against surprise charges are in place, but disputes now move through arbitration, where awards can greatly exceed benchmark rates. The costs reach employer-sponsored plans, and lawmakers have called for changes without a reported timetable.
The No Surprises Act has eliminated unexpected medical charges for patients, but its arbitration system has opened a costly new front in the health care bill. A CBS News investigation found that providers and specialized firms can use the process to secure payments far above benchmark rates. Those expenses can flow to employer-sponsored health plans and, in turn, affect workers through higher premiums or reduced benefits. The law delivered a direct protection, while leaving insurers, providers and employers to manage a dispute system with substantial costs.
The official rationale was straightforward: Congress created the arbitration system to settle payment disputes between insurers and out-of-network providers as part of eliminating surprise bills. Lead sponsor Rep. Frank Pallone said lawmakers had no choice but to create arbitration if they wanted to end surprise billing. The system took effect in 2022. Its basic design gives each side a chance to propose a price, then requires an arbitrator to choose one of those figures.
That final-choice structure, sometimes called baseball-style or pendulum arbitration, leaves no room for negotiation within the case. The arbitrator selects either the insurer’s offer or the provider’s offer. The typical benchmark considered is the qualifying payment amount, or QPA, and FairHealth offers another rate that can be used in the dispute process. Medicare rates may not be considered. A spokesman for plastic surgeon Dr. Norman Rowe said the insurer benchmark can be artificially low and defended the FairHealth data used by the doctor.
The awards described in the investigation show how far apart the figures can be. Industry researchers told CBS News that insurers were paying hundreds of dollars for routine lab tests that typically cost between $10 and $30. In one case, Rowe received an award of more than $400,000 for a breast reduction, while the insurer said it had previously paid him between $6,000 and $30,000 for the procedure. CBS News analysis found that Rowe was awarded around 170 times benchmark rates. His spokesman disputed the comparison, arguing that insurer offers can be too low and that the initial offer should not be compared with the final award.
A separate example involved Long Island spine surgeon Vadim Lerman, whose awards averaged 280 times benchmark rates, according to CBS News. Lerman declined an interview but said the comparison was incorrect because an insurer’s initial offer may be inappropriately low for complex surgery. Those explanations are part of the dispute over how fair payment should be measured. They also underscore the importance of the benchmark and other evidence considered by arbitrators.
The reported outcomes raise questions about whether the process consistently restrains costs. Leland Robbins of Turquoise Health said arbitrators side with providers in more than 85% of cases, and some certified Independent Dispute Resolution entities have even higher provider win rates. Robbins said the transaction has not disappeared; instead, disagreements have moved behind closed doors into arbitration. The patients may no longer face surprise bills, but costs borne by plans can still reach consumers indirectly.
The scale of the process is another concern. During the first six months of 2025, insurers and providers submitted 1.2 million new disputes, according to research from Georgetown University’s Center on Health Insurance Reforms. Federal officials had expected about 17,000 cases per year. HaloMD, which files cases for providers, said those initial estimates were flawed. The investigation reported that arbitrators had collectively earned more than $2 billion in fees, and that each side pays into the process before a decision is made.
The system has also created a market for intermediaries that help providers file disputes. CBS News found that these firms can take a cut of bills that reach as much as 1,000% above a service’s benchmark rate. Three groups, including HaloMD and two with buyout-firm investments, handled more than 75% of disputes settled in arbitration last year, according to Georgetown researchers; HaloMD itself is not private-equity-backed. Pallone has blamed private equity in part and said he wants to reform the law by changing arbitration. The available reporting does not identify a specific reform deadline.
For patients, the direct protection remains the law’s central result: unexpected charges have been eliminated. For employers and workers, the practical impact is less simple. About 70% of awards are taken from employer-sponsored health plans, Robbins said, and employers may respond to large fees by paying less toward premiums. The process also carries case fees for both sides, uses certified arbitrators, and has handled dispute volumes far above the federal estimate. The reporting does not specify a new compliance form or deadline.
The next step described in the reporting is Pallone’s push to reform arbitration; no enacted change or timetable is identified. Oversight of awards, fees and the process’s effects on employer plans remains necessary to assess how the law is working. The evidence shows both a real patient protection and a costly system for resolving payment disputes, and the work of measuring those consequences is not finished.
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