A coalition of more than 60 employer groups, insurers, patient advocacy and labor organizations sent a letter Feb. 24 to the Treasury Department, Labor Department and HHS, urging the Trump administration to crack down on what they describe as systemic abuse of the No Surprises Act’s arbitration process.
The letter, signed by Elevance Health, BCBS Michigan, Blue Shield of California, and Point32Health, argues the independent dispute resolution process, designed to resolve out-of-network billing disputes, has instead become a “profit-seeking tool” for a handful of provider groups that are overwhelming the system with inflated claims.
“The IDR process is increasingly being used in ways that raise costs for patients, plan sponsors, health plans, and the broader healthcare system,” the groups wrote.
The letter lands amid a long-stalled federal rulemaking effort. HHS proposed a rule to overhaul IDR operations in November 2023, but the rule has been tied up by legal challenges from the Texas Medical Association and is now under review at the Office of Management and Budget.
The coalition cited research showing the IDR process has generated at least $5 billion in wasteful spending between 2022 and 2024, including administrative fees and payment amounts that far exceed market rates. The volume of disputes has outpaced expectations, with federal regulators originally projecting 17,000 annual disputes. More than 3.3 million disputes were filed from mid-2022 to May 2025, according to a Health Affairs study published in August.
The letter pointed to data showing that in the first half of 2024, just four provider groups (Team Health, SCP Health, Radiology Partners and Envision) filed 74% of all IDR cases, submitting rates on average 370% higher than Medicare pays for the same services. Providers have been winning roughly 85% of disputes, with median payment determinations reaching 459% of the qualifying payment amount in 2024, up from 327% the year prior.
“Without meaningful oversight and accountability, the IDR process will continue to reward manipulation rather than fairness,” the groups wrote.
The letter comes amid a wave of payer lawsuits alleging providers are abusing the IDR process. In January, Anthem Blue Cross sued 11 Prime Healthcare hospitals in California, accusing them of extracting more than $15 million in improper payments by flooding the IDR process with over 6,000 ineligible claims. UnitedHealthcare sued Radiology Partners in August, alleging the company routed in-network claims through an Arizona affiliate to make them appear out-of-network and initiate arbitration on tens of thousands of claims.
Among the coalition’s core concerns is a lack of clear guidance requiring arbitrators to anchor decisions to market benchmarks. The groups also flagged what they described as a troubling pattern among certain arbitration entities and argued that planned and elective procedures performed by in-network providers at in-network facilities have been improperly funneled into the arbitration process.
“Some IDR entities rule overwhelmingly – 95 to 98% or more – in favor of providers across payers and fact patterns,” the letter said. “These IDR entities should be subject to prompt review.”
“We respectfully urge the Departments to act to restore the IDR process to its intended role by clarifying arbiter guidance, excluding elective procedures from IDR eligibility, increasing transparency into arbitrator decisions, and establishing meaningful oversight and accountability for IDR entities,” the groups said.
