Healthcare is one of our economy’s fastest-growing sectors, and the ability of healthcare providers to manipulate Congress is a big reason why. A modest reform meant to shield patients from surprise medical bills has become a multibillion-dollar windfall for hospitals, doctors, lawyers, and arbitrators. Patients pay the price through higher insurance premiums. Congress must fix its mistake.
Congress passed the No Surprises Act to solve a real problem. Patients who followed the rules by paying their premiums and going to in-network hospitals were being ambushed by surprise bills from out-of-network emergency room doctors, anesthesiologists, and radiologists they had not chosen and often had not even met.
Early drafts of the No Surprises Act solved this by requiring insurers to pay out-of-network providers a clear, market-based benchmark rate, usually tied to the median in-network price for the same service in the same area. This was the simplest and fairest solution. Patients would be protected from surprise bills, and providers would no longer be able to stay out-of-network and use the threat of balance billing to demand inflated payments.
But hospitals, physician groups, and medical staffing firms fought back. They complained that a benchmark would give insurers too much leverage to impose prices on providers. What they really feared was losing the out-of-network windfall that surprise billing had created.
So providers lobbied for an arbitration process. When insurers and providers disagreed on a price for a service already provided, each would submit a final offer to an arbitrator, who would choose one.
That was supposed to be a narrow backstop, not the heart of the law. Federal officials estimated that the process would handle just 17,000 disputes a year. Most claims were expected to settle before arbitration.
Instead, arbitration became the business model.
The latest data from the Centers for Medicare and Medicaid Services show how badly the system has gone off course. From the law’s implementation in April 2022 through May this year, more than 6.3 million payment disputes have been initiated. In the first five months of 2026 alone, 1.4 million disputes were filed.
This is not patient protection but industrialized lawfare.
Payments that the arbitrators award are not modest and reasonable corrections. In some cases, they are enormous multiples of the qualifying payment amount, the benchmark meant to approximate median in-network rates. One study found that No Surprises Act arbitrations generated at least $5 billion in costs through the end of 2024, roughly $2.5 billion annually.
Someone is paying that extra $2.5 billion a year, and it isn’t health insurance companies. They pass those losses to consumers in the form of higher insurance premiums.
MAMDANI’S SOCIALIST BUDGETING LIES
The Congressional Budget Office expected the No Surprises Act to reduce commercial premiums by 1% because it would weaken providers’ ability to exploit out-of-network billing. But the CBO now warns that if providers can systematically win high arbitration awards, they have an incentive to remain out-of-network or demand higher in-network rates. That means higher premiums.
Congress needs to end this giveaway to healthcare providers. The fix is straightforward. Go back to the original draft proposal that the providers fought against. Pay surprise-bill claims at a clear market benchmark, such as the median in-network rate, and abolish independent dispute resolution except for exceptional cases. Congress ended surprise bills once. Now it must end the arbitration racket it created.