The federal No Surprises Act is not working the way it was intended.
Here’s how it works in theory: when a patient receives care from an out-of-network provider group, the insurer makes a payment to that provider. If the provider disputes the amount, the two sides have 30 days to reach an agreement. If no agreement is reached, the dispute goes to arbitration, where both sides submit what they believe is a fair price, and the arbitrator picks the most “reasonable” offer.
In these cases, “reasonable” is supposed to mean the insurer’s median in-network rate. If the median rate for an MRI is $750, the side closest to $750 should win.
In practice, that’s not what’s happening.
A new Georgetown University study found that the No Surprises Act has driven $2.24 billion in added payments to providers. In the last quarter of 2024 alone, the median arbitration award was nearly 460 percent above the median in-network rate.
That means higher costs for patients.
As the researchers put it: “This higher spending will likely be reflected in higher overall health costs and consumer premiums in the future.”
Premiums are already rising this year, and the problems with the No Surprises Act are compounding as providers learn the arbitration process is an avenue to increase revenue.
The federal government initially estimated about 17,000 disputes annually. Instead, in the first nine months alone there were 190,000 disputes. Between mid-2022 and May 2025, the total swelled to more than 3.3 million disputes.
Where are these disputes coming from? It’s actually a small number of providers.
A Harvard and Mass General Brigham study found that “a majority of these disputes are filed by a small number of providers that are backed by private equity firms, and they tend to win higher rewards in the resolution process.”
“Profit enhancing middlemen” or third-party, for-profit companies who seek out providers to file arbitration claims on their behalf make up a sizeable number of filers in these disputes.
The result: a $2.24 billion problem.
But it doesn’t have to be North Carolina’s problem.
The No Surprises Act allows states to set their own guardrails.
A few years ago, the North Carolina General Assembly considered a simpler and more effective approach. Instead of costly arbitration, insurers would be required to pay the lesser of three options:
- The Medicare rate for the service.
- The provider’s actual billed charges.
- The median in-network rate for the same or similar service.
That’s it. No drawn-out arbitration, no gaming the system. Patients stay protected, and premiums stay lower.
The federal law isn’t working. North Carolina has a better solution ready to go.
For the state that already ranks as one of the most expensive for healthcare in the country, tackling surprise billing should be a no-brainer.
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