New EBRI research puts a dollar figure on what self-funded and insured employers are paying for IDR
The federal arbitration process created by the No Surprises Act generated an estimated $8.39 billion in additional health plan payment obligations in 2025 – roughly 63 cents for every $100 employers and their workers spend on job-based health coverage – according to new research from the Employee Benefit Research Institute (EBRI) published November 12, 2026.
The figure offers the clearest accounting yet of how much the law's dispute resolution mechanism is adding to plan costs and what that means for premium decisions in the years ahead.
What HR leaders need to understand about IDR
The No Surprises Act, enacted in 2020, was designed to shield employees from unexpected bills when they receive care from out-of-network providers.
The law generally prohibits providers from billing patients beyond their normal cost-sharing amounts and requires that any remaining payment dispute between the health plan and the provider be resolved between those two parties.
When those disputes cannot be settled through negotiation, either side may escalate to the federal independent dispute resolution (IDR) process – a form of baseball arbitration in which both parties submit a proposed payment amount and an independent arbitrator chooses one outright, with no splitting the difference.
Federal agencies originally projected the process would handle approximately 22,000 cases per year. The actual volume has been dramatically higher: about 2.56 million disputes were initiated in 2025 alone, according to the Centers for Medicare & Medicaid Services (CMS) data from the first and second halves of the year.
Where the $8.39 billion comes from
EBRI was able to produce its most precise estimate to date after CMS began adding initial payment amounts and patient cost-sharing data to its federal IDR public-use files in the third quarter of 2025. That addition allowed the institute to calculate what it calls "IDR uplift" – the prevailing arbitration award minus the plan's initial payment minus patient cost-sharing – the net additional amount a health plan owes after a provider wins an IDR determination.
Paul Fronstin, Ph.D., director of Health Benefits Research at EBRI, explained the mechanics at a press briefing attended by HRD America. If an arbitration award came to $1,000, the plan's initial payment was $200, and patient cost-sharing was $100, the additional plan payment obligation for that award would be $700. EBRI applied that calculation across the full CMS database for 2025.
Because the new data fields were only available from Q3 2025, EBRI used two methodologies across the year. The first-half figure of $3.66 billion was estimated using the qualified payment amount (QPA) – roughly the median amount that health plans pay for a given service – as a proxy. The second half, calculated directly from the new CMS data, produced $4.73 billion, bringing the full-year total to $8.39 billion.
What it means for your benefits budget
The $8.39 billion represents approximately 0.625 percent of the $1.34 trillion in national employment-based health plan costs, including premiums and equivalent costs for self-insured plans – roughly 63 cents per $100 of spending.
Fronstin put that in premium terms: with group health premiums rising at mid-to-high single-digit rates in 2025, the IDR uplift amounts to just under 10 percent of a hypothetical 10 percent premium increase. It is not the dominant driver of cost growth, but it is not trivial either.
"It's small. I don't want to say it doesn't have any impact on premiums — it's a small impact," Fronstin said. "These new data provide a clearer picture of what health plans owe for out-of-network services beyond their initial payments, after accounting for patient cost sharing. The $8.39 billion estimate equals approximately 0.625% of employment-based health plan costs, but it does not establish how much the No Surprises Act changed premiums."
Fronstin also flagged a trend to watch: the volume of IDR awards is growing, and with it the potential cost share.
"We know there's a trend towards more awards," he said, "which is one of the reasons why we're not estimating the impact on premiums, because the trend to more awards is going to drive that percentage up closer to 1% and perhaps eventually above 1%."
According to CMS data, providers, facilities, or air ambulance services were the prevailing party in approximately 85 percent of payment determinations in the second half of 2025, down slightly from 88 percent in the first half - meaning plans are on the losing end of the vast majority of arbitration outcomes.
Three things HR leaders should know before acting on this number
EBRI is explicit about what the $8.39 billion does and does not capture.
First, the figure covers only disputes that entered the federal IDR process. Claims resolved outside arbitration – the majority of No Surprises Act disputes – are not included. The number is not a measure of the law's total cost to employers.
Second, the estimate assumes all awards are paid in full. CMS data do not confirm whether or when providers actually received payment. If a meaningful share of awards goes unpaid – as some external data suggest – the true obligation to plans would be lower.
Third, EBRI flagged a behavioral risk the study did not examine: the law may be creating an incentive for some providers to deliberately go out of network to pursue higher IDR awards.
"We're not looking at that," Fronstin said, "but we know that that's possible, and that could have an effect on premiums too." For HR leaders thinking about network strategy and plan design, this is a risk worth raising with your carrier or third-party administrator.
The full report, "The Federal Independent Dispute Resolution Process and Employment-Based Health Plan Costs," is available at www.ebri.org/no-surprises-act.
