Arbitration mechanism of the No Surprises Act led to billions of dollars in costs

The arbitration mechanism under the No Surprises Act, enacted in the US in 2022 to prevent patients from facing unexpected medical bills, increased healthcare spending and led to a cost of approximately $16.6 billion in 2025.

Passed by the US Congress and enacted in 2022, the No Surprises Act aimed to limit high out-of-pocket payments faced by patients in emergencies or when receiving out-of-network services from participating institutions. However, the functioning of the system has brought about criticisms that it increases healthcare spending.

According to an analysis published by the Paragon Health Institute, healthcare providers win approximately 85 percent of disputes in the arbitration process. While the median payment amount for decisions issued in 2025 reached nearly four times the median in-network rate, the number of cases brought into the system reached approximately 2.6 million. In a separate analysis published in the journal Health Affairs, the total cost of the arbitration mechanism for 2025 was calculated at $16.6 billion, and it was estimated that the total cost for the 2022-2025 period reached $22.4 billion.

It is stated that the increasing expenditures may be reflected in premiums and other costs by insurance companies over time. The Paragon Health Institute recommends modifying the arbitration mechanism to limit costs and create a more balanced structure in payment decisions.