New report data: IDR costs total $22.48B in four years

What employers should know about the No Surprises Act and rising health care costs

The No Surprises Act achieved an important goal: protecting patients from unexpected bills for certain out-of-network care. But the law’s Independent Dispute Resolution (IDR) process, which settles payment disagreements between health plans and out-of-network providers, has grown far beyond what policymakers expected. The result is billions of dollars in added payments, fees and administrative expense that can increase the total cost of employer-sponsored health coverage.

A backstop that became a major cost driver

Initially, federal agencies projected about 22,000 disputes annually. In 2025, providers initiated approximately 2.6 million disputes. In Kansas, IDR volumes grew more than 200% from 2024 to 2025.¹

Nationally, providers prevail in nearly 88% of IDR disputes, with average awards exceeding $7,000 per case and reimbursement amounts often reaching 370-400% of the equivalent in-network payment level, driving billions of dollars in additional health care spending each year.

From 2022 to 2025, estimated IDR costs totaled $22.4B. Here’s where it went: 

• $15.6 billion in payments above in-network rates
• $4.2 billion in internal administrative costs
• $2.7 billion in IDR administrative and entity fees.²

Who ultimately pays?

When an out-of-network provider disputes a health plan’s initial payment, the parties first try to resolve the issue through open negotiation. If no agreement is reached, they move to IDR where an independent arbiter selects one amount. Members generally remain protected: their cost sharing is based on the qualifying payment amount and is not increased by the final arbitration award. The added cost, however, does not disappear.

For employers with self-funded health plans, the financial impact of the No Surprises Act's IDR process can be significant. A 2026 white paper from the ERISA Industry Committee (ERIC) found that IDR awards may increase overall health care cost trends by 1% to 6%, with self-funded employers bearing nearly 90% of those additional costs. For some large employers, the resulting exposure can exceed $10 million in unexpected annual health care spending.³

For fully insured coverage, higher claim and administrative costs become part of the overall cost base used to price coverage. Over time, these costs can place pressure on premiums, employer contributions, employee contributions and benefit design. Members may be protected from the original surprise bill, yet employers and employees can still feel the broader affordability impact.

As a not-for-profit health plan, Blue Cross and Blue Shield of Kansas (BCBSKS) uses more than 86 cents of every premium dollar to pay member claims. The remaining 13 cents covers operating expenses, including the best-in-class service and the programs that support employers and employees.⁴  IDR awards and processing expenses are not a separate profit center, they are added health care costs that affect the resources available to serve members and keep coverage affordable.

What BCBSKS is doing

BCBSKS is addressing the issue operationally and through policy advocacy. Its IDR Task Force brings together experts across the organization to improve outcomes and support reform. BCBSKS points to practical federal changes, including:

• Reduce incentives for ineligible or improper filings, including stronger upfront eligibility review.
• Improve transparency and oversight of arbitrator decisions and performance.
• Increase scrutiny of high-volume providers and third-party middlemen that overuse the process.
• Use a centralized portal and documented negotiation process to improve efficiency, information sharing and accountability.

What We’re Advocating For

Preserve the protection. Fix the process. BCBSKS supports keeping members out of payment disputes while pursuing targeted reforms that reduce improper filings, improve decision consistency and transparency, and better align awards with market-based reimbursement. These steps can protect the law’s consumer safeguards without allowing IDR to continue adding unnecessary cost to employer-sponsored coverage.

IDR may happen behind the scenes, but its costs do not stay there. Reform is important to preserving both patient protections and the long-term affordability of health benefits.