The No Surprises Act ended unexpected medical bills for patients, yet its arbitration system is generating awards far above market rates and shifting costs onto employers and premiums, a problem even the law’s Democratic sponsor now wants to fix.
A 2022 federal law meant to shield patients from out-of-network sticker shock largely worked on that front. Patients stopped getting blindsided by massive bills after emergency care or scheduled procedures involving out-of-network doctors.
But the same statute created a high-volume arbitration machine that is handing providers and middlemen payments many times the usual benchmark rates, CBS News reported in an investigation of public data, company claims, and industry research. Those payouts are landing heavily on employer-sponsored plans, and, over time, on workers’ premiums and benefits.
Congress built the system. Private intermediaries scaled it. Arbitrators collected more than $2 billion in fees. And the dispute count exploded far beyond what federal planners expected.
The No Surprises Act took effect in 2022. It barred surprise balance billing when patients went out of network through no fault of their own, especially in emergencies or at in-network facilities staffed by out-of-network clinicians.
That patient-facing win is real. The charge did not vanish. It moved.
Leland Robbins, a product leader at the data firm Turquoise Health, put it plainly:
"The transaction didn't go away. It went behind closed doors and has moved into this arbitration process when a payer and a provider can't agree what the fair price should be."
Under the law’s independent dispute resolution process, each side proposes a payment figure. The arbitrator must pick one, a “baseball-style” or pendulum design. The qualifying payment amount, or typical in-network benchmark known as the QPA, is supposed to guide the choice. FairHealth market data can also be used. Medicare rates generally may not. Both sides pay into the process before a decision.
In practice, providers are winning at a striking clip. Robbins said arbitrators side with providers in more than 85% of cases. About 70% of the awards come out of employer-sponsored health plans.
He warned what that means for open enrollment:
"Given that 70% of these awards are being taken out of employer-sponsored health plans, consumers are going to start seeing it when it comes time for open enrollment."
And:
"You know, employers are not able to withstand and absorb these kinds of big fees. They're going to be probably not paying for as much of your premiums."
Industry researchers told CBS insurers are paying hundreds of dollars for routine lab tests that typically cost $10 to $30. That is the quiet cost shift: fewer surprise bills at the bedside, more pressure on the plans that cover working families.
CBS’s review of public data found outsized results for some named physicians.
Plastic surgeon Dr. Norman Rowe was routinely awarded around 170 times benchmark rates for his services. In one case, the award topped $400,000 for a breast reduction. The insurer said it had previously paid him between $6,000 and $30,000 for the same procedure.
A spokesman for Rowe said the doctor relies on FairHealth benchmarks and argued insurers had manipulated their own benchmarks to create “artificially low reimbursement rates.” FairHealth, the spokesman said, is a widely recognized independent nonprofit whose data appears in statutes and state programs.
Long Island spine surgeon Vadim Lerman was awarded an average of 280 times benchmark rates in arbitration, per the same CBS analysis. He declined an interview. A spokesman rejected the idea that he was receiving “hundreds of times” above benchmark and said no comparison should be made between an insurer’s initial offer, which can be “inappropriately low for a complex surgical procedure”, and the final award.
Those figures are not abstract. They are the difference between a negotiated market rate and a closed-door award that employers then absorb.
Federal officials had expected roughly 17,000 arbitration cases a year. Research from the Center on Health Insurance Reforms at Georgetown University’s McCourt School of Public Policy found a different reality: 1.2 million new disputes hit the portal in the first six months of 2025 alone.
Last year, 15 government-certified arbitrators earned fees per case. Seventeen are designated now. Collectively, arbitrators have taken in more than $2 billion in fees. None agreed to on-camera interviews with CBS.
Intermediaries sprang up to file and manage cases for providers. CBS found they take a cut of bills that can run up to 1,000% above the benchmark rate.
HaloMD, founded in 2022 by Texas couple Scott and Alla Laroque, bills itself as “the expert” in No Surprises Act arbitration. The company says it has made more than $1 billion for clients and routinely wins awards about nine times benchmark rates. Its cut was not disclosed. Halo said early volume estimates “were objectively flawed in how they calculated expected volume.” The firm is not private equity-backed, according to the reporting.
TeamHealth, HaloMD, and Radiology Partners accounted for the most arbitration cases. Halo and two other groups with buyout-firm investments collectively handled more than 75% of disputes settled in arbitration last year, the Georgetown research showed.
Private equity has been buying anesthesiology, radiology, and emergency practices. Rep. Frank Pallone, the New Jersey Democrat who was a lead sponsor of the law, blames that ownership trend for much of the case surge. Reporting also noted a structural conflict risk: some private equity interests have ties to both physician staffing firms and the dispute-resolution entities that decide payment.
Providers and their intermediaries say insurers game the benchmark by submitting tiny offers, or none at all.
Patrick Velliky, Halo’s chief external affairs officer, argued insurers often forfeit or lowball:
"24% of the time, insurers lose by default. They didn't submit an offer at all. Another 9 1/2% of the time, insurers submit an offer, like a dollar or less."
He offered a stark example:
"So what that actually looks like, a patient goes to the E-D with a heart attack, we go to arbitration and the insurer is offering a total of $1.00."
Velliky said the median in-network rate “is not what the insurer presented” and accused carriers of miscalculating the benchmark.
A federal appellate court sided with providers this summer, describing the benchmark rate as “artificially low” and pulled down by insurers’ $0 or $1 reimbursement offers to doctors. That ruling strengthened the providers’ hand in how benchmarks are treated.
Pallone’s office said “ghost rates”, those token figures, will be excluded from calculations going forward under his planned fix.
Pallone does not pretend the design aged well. He said lawmakers added arbitration because they had no other path to pass a ban on surprise billing.
"We had no choice" but to introduce the arbitration system "if we wanted to actually get rid of surprise billing," he said.
Then came the verdict on results:
"I knew it was not going to go well, but I didn't know it was going to be this bad."
He plans to introduce legislation this week to eliminate arbitration and require that out-of-network providers be paid at in-network rates. He drew a line between clinicians and financial sponsors:
"Whether it's the hospitals, the doctors, the nurse, they're really trying to care for people. Of course, all of them should have a decent income so they can live. But why should these outside investors be making all this money off the backs of, you know, your insurance premiums, essentially?"
That is a late admission from the law’s own camp. Congress banned the visible patient bill, then stood up a payment fight that rewarded volume, intermediaries, and legal process. Working people still pay, through premiums, thinner benefits, and employer costs that do not stay on the corporate ledger forever.
The pattern is familiar. Washington promised relief at the point of care. It delivered a new market in disputes.
Patients got protection from surprise balance bills. Providers and filing firms found a forum where awards can run many times the benchmark. Arbitrators built a fee stream measured in billions. Private equity-backed staffing groups concentrated case volume. Insurers and doctors accuse each other of distorting the starting numbers. Employers sit in the middle, funding most of the awards.
Robbins’s point remains the clearest warning for households: when plans cannot absorb the hits, open enrollment is where families feel it, higher contributions, skinnier coverage, or both.
Pallone’s revision would try to end the arbitration channel and lock payment to in-network rates, while scrubbing token “ghost” offers from the math. Whether that simply shifts the fight to network contracting, narrow networks, or access fights is the next test. The last one already showed how fast a well-intended mandate can grow an industry around it.
Good intentions in Congress do not freeze prices. When lawmakers replace a messy bill with a closed-door prize fight, families should not be surprised when the cost shows up later on the premium line.