Fresh Scrutiny of NSA IDR Figures Shows a Program that’s Strained, but Working as Intended

A new study from Georgetown University examined the currently publicly available data for the No Surprises Act (NSA) independent dispute resolution (IDR) process during the first two quarters of 2025. 

Two issues have been made very clear with that report and many other analyses that have looked at the Centers for Medicare & Medicaid Services (CMS) data on the process in the past few weeks: it is simply just too overwhelmed and too expensive. 

Frequent readers and those in the industry have likely heard how the federal IDR process has been slammed with a completely unexpectedly high volume. Initial estimates for the IDR process were about 18,000 annually. However, the total volume of disputes submitted in the first six months of 2025 was 1.2 million. Early CMS estimates indicate the next two quarters jumped even higher, to 1.4 million. Add that all up, and the total number of claims that have gone through the IDR since the process started is nearly 5 million – slightly over those first estimates! 

But the process is also resulting in high administrative costs. There are two costs associated with the federal process: an administrative fee that goes to CMS, and a fee paid to the IDR entity that decides the dispute. In the first two quarters of 2025 alone, these two fees cost the industry nearly $900 million, only a bit less than during the previous two years combined. 

A 2025 Health Affairs report estimated that the IDR process incurred $5 billion in total costs for the whole industry since the NSA took effect. In essence, it has become an industry in and of itself, but it’s an industry that our healthcare sector can ill afford at this time.

What about the results of this new “industry?”

Providers continue to initiate and win most disputes. They initiated 99.9 percent of all disputes for that first half of 2025, and won 88 percent: the highest provider win rate to date.

One of the alleged reasons why the system is overwhelmed is the submission of disputes that are ineligible for the federal process. For example, the rules require an open negotiation phase between provider and payer before a claim goes to the IDR process – the idea being that, in most cases, the provider and payer can work the reimbursement out on their own – but many cases are submitted straight to the IDR without going through this phase. In the first half of 2025, IDR entities found about 17 percent of cases as falling into this ineligible bucket. 

In addition to the work IDR entities are doing, other stakeholders are making moves to address the tumult. 

For one, CMS is finalizing a 2023 rule that would modernize the whole IDR process. Right now, the process is based mostly on emails that have to be sent between the participating parties. The CMS rule outlines an IDR portal, whereby all of the parties can track the statuses of their cases and submit all of the necessary documents and notices electronically in one place.

The rule is now at final review with the White House, and assuming it works as hoped, should result in those involved being better able to handle the number of cases and fix some of the errors that are being made because of administrative errors.

While we wait for that rule to be finalized, one state legislature took a noteworthy step to address the challenges of the IDR process.

The Michigan State Senate adopted a resolution addressing a frequently discussed topic related to the IDR process. Michigan was one of the first states to pass a comprehensive balance-billing statutory scheme at the state level, before the passage of the NSA. The resolution cites the CMS data noted in this reporting, and describes the “growing, troubling practice” of providers allegedly choosing to send ineligible claims through the federal process for various reasons. The resolution urges the federal government to issue rules or guidance demanding that claims eligible for the state IDR process go through that process, rather than the federal process. While not legally operative, it is an interesting first commentary from a state on the efficacy of the surprise billing solution.

So, by virtually all reports, the NSA does appear to be working on the part of the consumer. We have seen a dramatic decrease in stories in which patients had devastating effects from surprise bills since the NSA’s passage.

But I think everyone can agree that the process is not perfect, and so we’re left to wonder what changes will make the difference.