Healthcare Dive Trendline on Surprise Billing
CMS released first-half 2025 independent dispute resolution (IDR) data: case submissions approached 1.2 million, up about 40% year-over-year, with arbitration entities processing over 1.3 million cases. However, about 20% of cases were non-compliant, and a few private equity-backed suppliers dominated disputes, raising concerns about abuse.
No Surprises disputes increasing even as arbiters catch up, CMS says
The agency released new data on independent dispute resolution in the first half of 2025. Roughly 1.2 million cases were filed in that period, mostly by the same private equity-backed providers.
Providers and health insurers submitted almost 1.2 million cases to a federal portal meant to resolve disputes over surprise medical bills in the first half of 2025 — almost 40% more than in the last six months of 2024, according to new data from the CMS.
Arbiters are handling the rising volume while cutting into the existing backlog, processing more than 1.3 million disputes in the first half of the year, the CMS said. That’s up almost 50% from the prior six months.
Still, despite faster closures, the independent dispute resolution process remains dogged by problems. Many submitted disputes are actually ineligible for IDR, and parsing through those is the primary cause of delays, the CMS said. And, the lion’s share of disputes continue to be submitted by a handful of mostly private equity backed-provider groups, raising concerns IDR is being exploited for profit.
When the federal IDR portal opened in April 2022, arbiters were quickly slammed with a tsunami of disputes over contested medical bills. The process — set up by the No Surprises Act to stop health insurers and providers from penalizing patients who inadvertantly receive out-of-network care — has proved successful in shielding consumers from surprise charges, but continues to be bumpy.
Along with the backlog in disputes, IDR has been slammed by both payers and providers, both of which argue it unfairly benefits the other side.
In IDR, both a patient’s provider and their health insurer submit a payment rate they think is fair for any out-of-network medical services rendered. An independent, third-party arbiter picks one of the two offers. The process was set up to be as neutral as possible, but has been forced to start and stop over the past few years to comply with a flurry of lawsuits from provider groups arguing the regulatory specifics underpinning IDR favor insurers.
Insurers, meanwhile, point to the fact that a handful of provider organizations — many backed by private equity companies — are responsible for an outsized share of disputes.
The top 10 initiating parties represented almost 70% of all disputes in the first six months of 2025, according to the latest CMS data file released on Wednesday.
The top three initating parties — HaloMD, a middleman that takes on IDR disputes on behalf of providers, along with PE-backed providers Team Health and SCP Health — accounted for approximately 44% of all disputes initiated in the first half of last year, according to the CMS.
Combined with the fact that providers win the large majority of disputes — a whopping 88%, even higher than the 85% in the last six months of 2024 — and are paid three or four times above comparable in-network rates when they win, that’s a big issue for insurers.
Payer groups have raised concerns that the providers are turning to IDR as a business strategy to inflate reimbursement, including by sneaking medical bills that shouldn’t qualify for the process through.
About 20% of disputes submitted in the first six months of 2025 were actually ineligible for IDR, the CMS said. Notably, the percentage of ineligible disputes has been dropping as arbiters get better at processing eligiblity reviews. But they’re still cluttering up the process, regulators say.
Meanwhile, providers point to win rates and high reimbursement amounts to argue that insurers are filing artificially low payment offers.
As the back-and-forth continues, the industry is still waiting for regulators to release a final rule clarifying some IDR operations. In the Wednesday filing, regulators wrote that the rule would “improve the process for determining the eligibility of disputes and ultimately increase the speed with which certified IDR entities render payment determinations.”
But in the meantime, IDR is inflating spending for the entire U.S. healthcare system. According to research published in Health Affairs last summer, IDR resulted in an estimated $5 billion in additional costs in the first three years of its implementation.