On September 3, 2026, U.S. House of Representatives Energy and Commerce Committee (Committee) Ranking Member Frank Pallone, Jr. (D-NJ) sent letters to six companies that are certified as independent dispute resolution entities (IDREs) under the No Surprises Act (NSA), which was passed as part of the Consolidated Appropriations Act, 2021 (P.L. 116-260).[i] The Committee requested information about how each company is currently conducting arbitrations and its compliance with the NSA in light of the higher-than-anticipated volume of independent dispute resolution (IDR) cases and resulting awards in favor of the health care providers.[ii]

The letters are the latest developments in an ongoing national discussion about how to establish the proper rate of payment to health care providers when there is no contract between the provider and the responsible health plan. Specific disputes between providers and payors over reimbursement rates have largely moved into the federal IDR process while the policy issues remain under review in the legislative and judicial arenas. These dynamics will continue to impact the economics of the provision of emergency and other non-contracted (out-of-network) health care services and insurance across the United States.

No Surprises Act Background

The No Surprises Act (NSA) was enacted to prevent providers from billing patients for the balance of bills that were not paid by the patients’ health plans.[iii] Such “balance billing” generally occurred when patients received emergency care from providers that did not have a contract with the patients’ health plans.[iv]

The NSA established the federal IDR process as a methodology to determine how much insurers must pay providers in such non-contracted situations.[v] Either the insurer or the provider may initiate the IDR process before a private arbitrator (i.e., an independent dispute resolution entity, or IDRE).[vi] The IDRE ultimately selects one of the parties’ payment offers (aka “baseball arbitration”), employing the statutory factors identified in the NSA.[vii] A key consideration in this process is the qualifying payment amount (QPA), which approximates what the provider would have received from the patient’s health plan if the provider had been in-network.[viii] Federal agencies promulgated rules refining the calculation of the QPA.[ix] After the NSA became consistently “operational” in 2024, use of the IDR system more than doubled from 2023 to 2024.[x]

Related Judicial Developments

On August 11, 2026, the United States Court of Appeals for the Fifth Circuit concluded en banc that QPA calculations were “artificially low” due to agency rules it found to be unlawful.[xi] These rules allowed insurers to include so-called “ghost rates” (rates included in contracts for services the providers do not actually provide) in their calculation of the QPA, and to exclude bonus and incentive payments from QPA calculations.[xii]

The court further noted that artificially low QPAs resulted in: (1) the number of arbitrations “dwarf[ing] the agencies’ expectations by a factor of 84,” (2) providers prevailing in over 80% of arbitrations, and (3) arbitrators selecting a reimbursement rate higher than the QPA in “a whopping 85% of arbitrations.”[xiii]

Recent Congressional Action

The recent congressional inquiry takes a different approach to concerns that the IDR process “is not functioning as Congress intended”, instead focusing on the role of the neutral arbitrators.[xiv] The letters request the neutral arbitrators respond to 14 categories of documents and information, including, among other things: data on disputes handled by the arbitrators; training, credentials, and compensation structure for the arbitrators; IDREs’ use of artificial intelligence (AI); internal audit and quality review practices; identification of organizations that initiated disputes; and disclosure of financial relationships between the IDREs and the parties that initiate or participate in the IDR process.[xv]  Responses are due by September 24, 2026.[xvi]

What to Expect Moving Forward

Given the competing interests and increasing governmental and public attention to the NSA’s effect on the health care industry overall, we anticipate there will be additional legislative action, litigation, and other initiatives designed to address reimbursement of emergency and other out-of-network providers.

Feldesman is continuing to monitor developments related to the No Surprises Act and the related (IDR) process, as well as other initiatives impacting the health care industry. If you have any questions about these developments or their potential impact on your organization, please contact Jesi J. Carlson, Kathryn E. Doi, or Tara N. Ohrtman.

[i]  https://democrats-energycommerce.house.gov/media/press-releases/pallone-seeks-answers-arbitration-firms-no-surprises-act-compliance; https://www.congress.gov/crs-product/R48738

[ii]  https://democrats-energycommerce.house.gov/media/press-releases/pallone-seeks-answers-arbitration-firms-no-surprises-act-compliance

[iii]  https://www.congress.gov/crs-product/R48738

[iv]  Id. at 1.

[v]  Id.

[vi]  Id.

[vii]  Id.

[viii]  Id.

[ix]  Texas Medical Association, et al. v. U.S. Department of Health and Human Services, et al., No. 23-40605 (5th Cir. Aug. 11, 2026).

[x]  https://www.congress.gov/crs-product/R48738, p. 2.

[xi]   Texas Medical Association, et al., No. 23-40605, p. 8.

[xii]  Texas Medical Association, et al., No. 23-40605, pp. 3-12.

[xiii]  Texas Medical Association, et al., No. 23-40605, p 8.

[xiv]  https://democrats-energycommerce.house.gov/media/press-releases/pallone-seeks-answers-arbitration-firms-no-surprises-act-compliance

[xv]  Id.

[xvi]  Id.