Arbitration awards under the No Surprises Act can reach nearly 6% of total commercial medical spend in some regions, UnitedHealthcare CEO Tim Noel said during an Oct. 13 earnings call.
The medical cost trend for UnitedHealthcare’s commercial business is “exceeding” an initial expectation of 11%, Mr. Noel said. While Mr. Noel pointed to clinician cost intensity and expensive specialty drugs as part of that, he also said there has been “an acceleration of costs related to the No Surprises Act.” He cited “ongoing abuse” driven by “a relatively small number of clinician groups and third-party organizations.”
Mr. Noel said this translates to billions of dollars in additional costs that hit consumers and employers.
“The law was intended to protect patients from unexpected bills, and we strongly support that objective,” Mr. Noel said. “We will continue working with policymakers and regulators to ensure the law functions as intended and that healthcare dollars are directed toward appropriate patient care rather than significantly inflated market arbitration awards and volumes along with unnecessary administrative expense.”
During a July earnings call, Dan Kueter, who now serves as UnitedHealth Group’s chief commercial officer, said excessive use of the independent dispute resolution process has added about 50 basis points of incremental cost trend in 2026 and now accounts for at least 100 basis points of the total commercial cost.
Mr. Kueter said upwards of 40% of claims that start the IDR process are ineligible, and about 60% of arbitration cases are brought forward by five entities. He added that when arbiters align with the out-of-network providers, the average payout is now 11 times what Medicare would pay, and some determinations are 30 times Medicare rates.
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