100% waste: Ineligible disputes still getting paid
The federal arbitration system under the No Surprises Act is being flooded with disputes that don't qualify in the first place, but many of them are being paid.
In 2024, 39% of disputes sent to arbitration were ineligible, yet roughly half of them still resulted in mandatory—and grossly inflated—payments.
That's based on a new analysis from AHIP and the Blue Cross Blue Shield Association (BCBSA), drawn from a nationwide survey of health insurance plans covering 154 million people.
What makes a claim ineligible under the No Surprises Act
The No Surprises Act was meant to protect patients from unexpected medical bills. But not every interaction with a provider is eligible for the process.
Common types of ineligible claims include:
- Services payable under Medicare, Medicaid, Children’s Health Insurance Program or TRICARE
- Disputes already resolved and resubmitted
- Claims involving in-network providers
- Claims subject to state surprise billing laws
In one case, a provider filed arbitration for a Medicare-covered claim, clearly ineligible under the No Surprises Act. The insurer flagged it, but the provider was still awarded $2,400.
"When this arbitration process was established, the Centers for Medicare and Medicaid Services estimated 17,000 disputes would be resolved annually. In fact, within months, volume exceeded 10 times that amount as a small percentage of providers—particularly private-equity backed organizations—drove the majority of disputes," said BCBSA President and CEO Kim Keck. "On average, the independent dispute resolution process resulted in payments 400% above—and as high as 10,000% above contracted rates–with many instances far exceeding that amount."
Unchecked, these wasteful practices drive up everyone’s premiums. It's time to restore balance and transparency to this process, and the Blues stand ready to work with policymakers on commonsense reforms.
Real-world impact of ineligible claims
One Blue Cross and Blue Shield company (BCBS) received over 600 ineligible disputes in a single month from a single entity. Another saw nearly 750 per day.
The scale is staggering: One BCBS company paid out nearly $257 million on ineligible claims in 2024 through Aug. 21, 2025.
Gaming a government process like this is the definition of waste and abuse.
Recent research showed the broken process added at least $5 billion in health care spending in just two years, which ripples through the system raising premiums and out-of-pocket costs for everyone.
These examples show how the system is actively rewarding misuse. The flood of ineligible disputes will keep draining resources and increasing health care costs. The No Surprises Act must protect patients—reforming the arbitration process isn't optional.
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