Congress Weighs Future of Healthcare Arbitration System
Healthcare providers should prepare for potential legislative changes to the No Surprises Act payment dispute process.
Updated on Oct. 27, 2026 in Healthcare
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Should the government prioritize standardized payment benchmarks over independent arbitration in healthcare billing disputes?
Congress is weighing new legislative proposals to reform the No Surprises Act as the volume of payment disputes between healthcare providers and insurers continues to surge. The current arbitration system, initially designed for a small fraction of its actual load, now faces significant enforcement challenges regarding unpaid awards.
Why it matters
The massive gap between estimated and actual dispute volume has paralyzed the current arbitration process, leaving providers and insurers in legal limbo over unpaid claims. For operators, this creates a volatile environment for billing, revenue cycle management, and accounts receivable planning.
In 2025, there were 4 million arbitration disputes under the No Surprises Act, a massive increase from the initial federal estimate of 22,000 cases annually. Providers currently prevail in approximately 85% of these proceedings, which are statutorily required to be paid within 30 days.
The players
Frank Pallone
A U.S. Representative who recently introduced legislation aimed at replacing the current healthcare arbitration system.
Greg Murphy
A U.S. Representative who sponsored legislation to impose penalties on insurers that fail to meet 30-day payment deadlines.
The details
The No Surprises Act created an Independent Dispute Resolution process for out-of-network care, requiring parties to negotiate rates before moving to arbitration. However, the system lacks strong enforcement, and providers report insurers often withhold payments. Legislative proposals, including one introduced in October 2026, seek to either replace this system with a default qualifying payment amount or enforce stricter penalties for late payments.
Timeline
The No Surprises Act was passed into law at the end of 2020.
Rep. Greg Murphy introduced a bill regarding award penalties in September 2024.
There were over 4 million arbitration disputes filed in 2025.
Rep. Frank Pallone introduced a bill to eliminate arbitration on October 8, 2026.
Market Landscape
The push to amend the No Surprises Act follows years of severe operational volatility in the arbitration process it established. This legislative movement marks a departure from the statute's original design, attempting to resolve an enforcement gap that has left millions of awards in limbo.
Healthcare operators should anticipate potential changes to the Independent Dispute Resolution process that could fundamentally alter reimbursement strategies. Consult with legal and financial counsel to monitor how legislative shifts or upcoming court rulings may impact current pending arbitration awards.
The takeaway
The current arbitration process is effectively failing due to volume, making future legislative or judicial intervention likely. Operators should track the status of the Pallone and Murphy bills as primary signals for how arbitration-based revenue models will be structured moving forward.
Further reading
For more on evolving regulatory standards, see Healthcare.
Live Poll
Should the government prioritize standardized payment benchmarks over independent arbitration in healthcare billing disputes?
