Arbitration loophole threatens to undo savings of No Surprises Act

Six years after Congress and President Donald Trump enacted the No Surprises Act to shield patients from unexpected out-of-network charges, a new problem has emerged. Investigations reveal that the law’s arbitration mechanism, intended for a limited number of disputes, is now handling more than 17,000 cases every two days, many of which are ineligible under the statute. Arbitrators are paid per decision, creating incentives that have led providers to prevail in about 90 % of hearings, with some awards exceeding in-network rates by over fifty times.

This surge, driven largely by private-equity-backed physician groups, adds roughly $15 billion to healthcare spending and pushes insurance premiums higher. The Congressional Budget Office warns that such outcomes could raise costs for consumers and tilt the market toward large organizations, squeezing independent practices. Experts suggest reforms such as tying awards to comparable in-network rates, pre-screening claims for eligibility, and imposing stricter oversight of arbitrators to restore the law’s original purpose.