Employers Urge More Transparency in Surprise Billing Disputes (Correct)

Employers hope a forthcoming rule to improve surprise medical bill arbitration will strengthen their hand against doctors and improve transparency into insurers’ processes.

The Trump administration is expected to release the rule this month on improving the “independent dispute resolution” process under the No Surprises Act, which requires insurers and doctors to settle most unexpected out-of-network bills themselves instead of billing the patient.

Around 63% of employers either fully or partially self-fund their health plans, putting them directly on the hook for extra costs associated with navigating—and losing—surprise billing arbitration. Data show that doctors win 85% of disputes, and industry groups are lobbying lawmakers and regulators to make changes.

Last month, eight major employer groups led by the ERISA Industry Committee sent a letter asking Health and Human Services Secretary Robert F. Kennedy Jr., Labor Secretary Lori Chavez-DeRemer, and Treasury Secretary Scott Bessent to strengthen enforcement against ineligible claims and increase transparency in arbitration decisions.

Insurance companies handle the brunt of surprise billing disputes, and transparency for employers is typically limited across all parties, said Elizabeth Mitchell, president and CEO of the Purchaser Business Group on Health.

“They forget that this money is coming out of us—employers, workers, and their families—and yet, we are an afterthought in terms of visibility into the process, the results, anything,” she said.

Doctors’ advocates argue the data prove that insurance companies chronically underpay clinicians. But employers and insurers allege doctors are abusing the process by refusing to negotiate and submitting ineligible claims for arbitration.

An estimated 19% of all arbitration cases were deemed ineligible in the last six months of 2024, according to the Centers for Medicare & Medicaid Services. The number of arbitration disputes filed overall is increasing—40% more were filed in the last half of 2024 compared with the first half, totaling 853,374 cases.

Growing Scrutiny

Scrutiny on the process is growing. A Georgetown University analysis in September estimated arbitration had cost the health-care system $5 billion.

The 32BJ Health Fund, which represents a division of Service Employees International Union facilities workers across the Northeast, took the radical step of bringing arbitration operations in-house.

The plan had delegated arbitration to its insurance carrier, Anthem, when the law took effect. But the insurer struggled to respond to arbitration cases in time, Director Cora Opsahl said, so the union resumed control in 2025.

32BJ still relies on Anthem for key payment figures like the qualifying payment amount, or median in-network rate, that factors into the decision process. But Opsahl said her team cross-checks that against other private and public data points.

“Most employers can’t do what we do,” she said.

Anthem, for its part, blamed issues on medical providers it says overwhelm the system.

“Anthem has made significant investments dramatically improving our case triage and eligibility screening and enhancing our dispute response capabilities for the customers we serve,” the insurer said in a statement.

The number of arbitration cases 32BJ has steadily climbed from around 1,000 in 2023 to a projected 3,000 in 2025.

The fund is in arbitration for $50 million worth of services this year, compared to $70 million the providers initially billed—far above the in-network amount of $9 million, Opsahl said.

Another employer recently paid a $200,000 air ambulance bill, only to receive a separate $650,000 bill for the same case months later, said Margaret Faso, health policy director at the National Alliance of Healthcare Purchaser Coalitions. The company lost the arbitration battle, but never had any insight into why.

“They’re losing a lot, and they’re losing big,” she said.

Looking Forward

The high win rate for doctors is pushing some employers to negotiate more, but they can’t write a blank check, said James Gelfand, president and CEO of The ERISA Industry Committee.

“As a good fiduciary, you cannot waste the plan’s money. And offering an insane amount of money to make a doctor go away instead of going to IDR—there’s problems with that, right?” he said. “It’s hard to defend.”

Medical groups are accusing insurers in a stream of lawsuits of not paying arbitration awards. But the courts are mostly siding with insurers in concluding that oversight rests with the Department of Health and Human Services, and that the law doesn’t grant courts the authority to force insurers to pay.

Some employers are instructing carriers to not pay arbitration awards for cases they don’t believe were eligible in the first place. Gelfand said some ineligible cases are being awarded to doctors at 400% of the QPA.

“In those cases, yes, we would request our carriers not to make those payments,” he said.

The law doesn’t account for ineligible claims that make it through the system, said Garrett Hohimer, vice president for policy and advocacy at Business Group on Health.

“Employers have a duty with respect to their plans to protect the corpus of the plan and only pay for things that are permissible,” he said.

Determining what is and isn’t an eligible claim is a complex process. Arbitrators are also limited to considering the two offers and supporting information that parties submit.

“Broadening that spectrum, and not making it a binary of one offer that might be on the lower end and one offer that might be quite on the other end I think would result in—certainly the perception of—a more fair outcome,” Patrick Pinnell, managing director of HHS-CMS operations at arbitrator MAXIMUS, said at a Health Affairs event in August.

The forthcoming rule is expected to address many of employers’ complaints, but it could also face legal fights similar to those that overturned a series of previous rules and guidance.

“Honestly, I’m not totally sure how to fix this process,” Opsahl said.