As a member of the Coalition Against Surprise Medical Billing, Katy Spangler helped push for the No Surprises Act in 2020. However, on Wednesday, she took the stage at AHIP Forum Medicare, Medicaid, Duals and Commercial Markets to demand changes to the law.
The No Surprises Act protects patients from unexpected bills and eliminates payment friction between insurer and provider. The law requires insurers and providers to enter into 30 days of open negotiations to determine the amount paid to providers. If they cannot reach an agreement, each party can use the Independent Dispute Resolution (IDR) process, in which a provider submits a payment offer and an insurer submits a payment offer, and then a neutral arbitrator (called an IDR entity) chooses one.
Even if the law succeeds in protecting patients from surprise bills, Spangler and others in the industry argue that the IDR process is now being abused by some suppliers. What was intended to be a last resort has instead experienced an explosion in volume, with providers initiating the vast majority of IDR cases and winning most of the time at significantly inflated award levels, she said.
“When we have an in-network surgeon who accepted $800 for reimbursement for this surgery, but an assistant surgeon submits the same case to the IDR and they get $80,000, that’s not sustainable. … It’s crazy — we have to fix this problem,” Spangler said during the panel.
Recently published data from another panelist confirms this. Kennah Watts, a research fellow at the Center on Health Insurance Reforms (CHIR) at Georgetown University’s McCourt School of Public Policy, explained during the panel that there were 3.4 million IDR disputes between 2022 and June 2025. CMS, however, projected there would be about 55,000 over that same period.
Watts added that healthcare providers and institutions initiate 99% of disputes.
“We also see that not only do providers submit the vast majority of disputes, but they also win a majority, and they win at much higher rates than flat rates. …We can see this to date, [when providers] win, they have a median win rate that is about 4.5 times the on-network rate,” she said.
And the IDR process is expensive: From 2022 to 2024, the IDR process incurred a total cost of about $5 billion, according to Watts data.
A health insurance executive on the panel — Josh Goldberg, executive director of health policy at Health Care Service Corporation — echoed these issues. He noted that the company has faced approximately 750,000 IDR disputes and it has been extremely difficult to keep up with that pace.
“Between two months, you might see a 40% change in terms of volume and so it’s very difficult to accurately recruit that fluctuating volume,” he said. “We’re seeing, I think, what might be intentional manipulation of volume to try to concentrate a lot of volume in a short period of time to make it more difficult to respond. … Currently, we have over 400 people working just on IDR conflicts. That’s significant. Those salaries, the cost of all that has to be paid somewhere, and that translates into bonuses.”
He added that due to the volume of IDR litigation, he does not believe that IDR entities are able to give adequate attention to litigation. He noted that a $7,000 claim for a respiratory panel resulted in a $255 million award under the IDR process.
“Now, to their credit, we went back to the IDR institute and said, ‘You want to look and see if there’s an error here, because that can’t be true.’ They recognized that they made a mistake, selected the wrong dominant party, and they went to CMS and got it reopened,” Goldberg said. “But I think it speaks to the stress they’re under to close cases very quickly, and that translates, I think, into a reduction in the quality of work that they’re able to do.”
As for how to improve the IDR process, Spangler argued that the current administration should take regulatory steps to prevent ineligible claims from going to arbitration and address the misguided incentives that encourage inappropriate IDR decisions. However, congressional action may also be necessary.
“We think there are a lot of things that can happen to make the situation less serious, but this is really serious, and I’m so sad to say that,” Spangler said.
Photo: KLH49, Getty Images
