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Employer health plans fund 70% of No Surprises Act arbitration awards
Employer-sponsored health plans pay 70% of No Surprises Act arbitration awards, according to Leland Robbins of Turquoise Health. CBS News found those awards running many times benchmark rates, a cost workers may meet in premiums and benefits.
The Board Room · Leadership desk
What happened
- Arbitrators side with providers in more than 85% of No Surprises Act disputes, according to Leland Robbins of the data startup Turquoise Health.
- A CBS News analysis of public data found plastic surgeon Norman Rowe was routinely awarded around 170 times benchmark rates for his services.
- Industry researchers told CBS that insurers are paying hundreds of dollars for routine lab tests that typically cost $10 to $30.
- Insurers and providers filed 1.2 million new disputes to the federal arbitration portal in the first six months of 2025.
- Seventeen government-certified arbitrators now do the work for a fee per case, up from 15 last year.
Compiled by The Board RoomSomething wrong?How this is made
Why it matters
- cost The plan sponsor pays first and the employee pays last, because award money drawn from employer plans has to be recovered through premiums or thinner benefits.
- constraint With Medicare rates off the table and no middle outcome allowed, a plan's only real lever in a dispute is its own offer, and an offer judged too low loses outright.
- decision Benefits committees setting contributions for the next open enrollment must choose between pricing in arbitration exposure now and absorbing it in a later renewal.
- precedent Per-case fees, a provider win rate above 85% and a filing pace near 2.4 million a year give providers and their filing agents reason to keep sending disputes to arbitration.
The cost starts with the rule arbitrators work under. In the dispute process the No Surprises Act set up in 2022 [2], the insurer and the provider each propose a rate, and the arbitrator must choose one of the two [10]. There is no room for negotiation. Arbitrators weigh the qualifying payment amount, the usual benchmark, and a separate FairHealth rate can also be used, but Medicare rates may not be considered [9]. If the arbitrator thinks the insurer's offer is too low, the insurer loses the whole dispute and the provider's figure becomes the payment.
The doctors CBS News analysed say the benchmarks are the problem. A spokesman for Rowe said insurers had manipulated benchmark rates to create "artificially low reimbursement rates" [7]. "Dr. Rowe uses the widely recognized gold standard FairHealth benchmarks set by the independent nonprofit FairHealth.org using reliable and objective market data," the spokesman said [8]. Vadim Lerman, a Long Island spine surgeon who CBS found averaged 280 times benchmark rates, said "the suggestion that a physician is receiving 'hundreds of times' above benchmark rates is incorrect," and that "No comparison should be made to the insurer's initial offer" [18].
That argument is strongest against a benchmark the insurer sets. It is weaker against Rowe's largest case. He was awarded more than $400,000 for a breast reduction, and the insurer said it had previously paid him $6,000 to $30,000 for the same procedure [5]. The award is more than 13 times the top of that range [17]. That comparison uses his own past payments from the insurer, so a lowballed QPA does not explain it.
Volume compounds the price. At the pace of the first half of 2025, filings would reach about 2.4 million a year [16]. Each side pays into the process before the arbitrator decides [15], and arbitrators are paid per case [14]. More disputes mean more fee income for the arbitrators. CBS also describes specialized middlemen who pursue these awards for providers [3].
The money ends up with employers. "The transaction didn't go away. It went behind closed doors and has moved into this arbitration process when a payer and a provider can't agree what the fair price should be," Robbins said [12]. He said "consumers are going to start seeing it when it comes time for open enrollment" [13], and added that "employers are not able to withstand and absorb these kinds of big fees" [20].
For a benefits committee, the trade-off is about timing. If it raises employee contributions this quarter, it is pricing in a cost it expects but cannot yet measure. If it holds them, this year's awards land in next year's renewal instead. CBS's own wording is that workers "may ultimately pay" through higher premiums or reduced benefits [19]. The investigation does not put a dollar figure on that effect. In my view, the provider win rate and the employer share Robbins cites settle which way the pressure on premiums runs, though not how large it will be.
What to watch
- Second-half 2025 filing totals on the federal arbitration portal, to test whether the first-half pace of 1.2 million disputes holds.
- Employer renewal and open enrollment pricing that cites arbitration awards, the first direct measure of the premium effect CBS and Robbins describe.
- Any change to the rates arbitrators may weigh; Medicare rates are currently excluded from consideration.