The federal government plans to end its contracts with two arbitration firms that handle disputes over medical bills under the No Surprises Act, a consumer protection law facing scrutiny over large payouts to doctors. The law’s arbitration process is intended to settle payment disagreements between providers and insurers without involving patients in the dispute.
Passed in 2020 and effective from 2022, the law protects patients from surprise bills when they receive care from providers outside their health plan’s network, including in emergencies. When providers and insurers cannot agree on a payment, an arbitrator reviews an offer from each side and chooses one.
The system was expected to be used infrequently, with decisions broadly divided between providers and insurers. Instead, doctors have brought millions of cases and won more than 85 percent of them in 2025, the most recent year covered by federal data. Some awards have been dozens of times higher than typical insurer rates.
The arbitration process has also generated substantial revenue for the firms handling cases. The government contracts with 17 firms, whose arbitrators set their own fees of $425 to $800 per dispute. Collectively, they earned $742 million from 2022 through 2025. Federal data also indicates that outcomes vary significantly among arbitrators, despite the firms being subject to the same rules.
Sources: The New York Times Business.