Surprise billing occurs when a patient with health insurance unknowingly or unavoidably receives care from an out-of-network provider and is billed directly for charges not fully covered by their plan. Before the No Surprises Act was passed, patients could be billed for the difference between what a provider charged and what their insurance paid, as well as for additional out-of-network fees.
The No Surprises Act of 2020 protects individuals covered by group and individual health care plans from receiving surprise medical bills after most emergency services and certain non-emergency care at in-network facilities. Beginning in 2022, the law added additional protections to prevent surprise billing. For privately insured patients, these protections include limits on balance billing and a federal dispute resolution process. For uninsured patients or for those who choose not to use their health insurance for a service, the law requires good faith estimates to be provided before you undertake the service.
Despite these additional protections, consumers continue to report disputed charges and billing confusion. According to data from CMS, roughly 1.2 million payment disputes were filed by providers and health insurances in the first half of 2025 alone. This was almost 40% higher than the last half of 2024. This increase has drawn attention to the statute’s Independent Dispute Resolution system (IDR), which is a federal arbitration process designed to settle payment disagreements between insurers and out-of-network providers. Under the IDR, insurers and clinicians submit competing payment offers to a certified arbitrator, who must select one amount rather than splitting the difference. Lawmakers adopted this structure to pressure both insurers and providers to submit realistic numbers instead of inflated demands.
Although the system was designed to keep patients out of reimbursement fights, the large volume of disputes being filed, and surveys suggesting many filed cases may be ineligible under the statute’s terms have raised administrative and enforcement challenges within CMS’s implementation framework. Although the law prohibits balance billing for covered emergency and certain non-emergency services, the continued pace of arbitration filings and associated enforcement work shows that disputes over payment amounts can persist even after protections are in place.
Patients sometimes receive bills while these payment disputes are pending, and they may not know whether the charge is lawful or subject to dispute, reflecting gaps in implementation and public awareness. This creates a legal issue because the No Surprises Act’s promise of protection depends on the proper operation of the arbitration and complaint processes rather than automatic relief, meaning patients can be left uncertain about their rights unless enforcement and administration keep up with disputes. The continuing volume of arbitration cases shows that the No Surprises Act’s consumer protections depend heavily on administrative systems that are clearly still under strain.