San Antonio orthopedic surgeon Adam Bruggeman, MD, said the federal No Surprises Act (NSA) is doing “a great job” of protecting patients from surprise medical bills for certain out-of-network care – but “nobody gets everything right the first time around.”
“The problem is we just need to strengthen [the NSA’s] implementation,” he told Texas Medicine.
Effective Jan. 1, 2022, the NSA requires physicians and insurers to work out payment disputes for certain out-of-network care through an independent dispute resolution (IDR) process, rather than leaving patients responsible for the difference. The system was designed to resolve situations in which health plans and physicians cannot agree on payment amounts, with an independent arbitrator choosing between the parties’ offers.
But four years into the law’s implementation, physicians say flaws in the NSA’s IDR process, persistent insurer network inadequacy, and health plans’ failure to comply with IDR payment requirements are undermining the law’s intended balance. NSA arbitration is intended to resolve payment disputes fairly between insurers and physicians for certain out-of-network care, but physicians contend that when the process rules in their favor, payers frequently fail to pay within the statutory 30-day timeframe, pay only a portion of what they owe, or do not pay at all.
Although the law includes certain federal and state enforcement mechanisms, the Centers for Medicare & Medicaid Services’ (CMS’) own data show that late IDR payments by health plans remain a significant source of physician frustration.
Dr. Bruggeman, who founded a physician-led organization that advocates for effective implementation of the NSA, says current enforcement is not strong enough to hold insurers accountable.
As new federal rules continue refining implementation of the NSA, TMA is pushing for better enforcement of payment protections under the law, calling on federal regulators and lawmakers to take stronger action to prevent health plan practices that place financial burdens on physicians and harm patients’ access to care. TMA has also spent the last several years challenging federal implementation of the NSA across a string of successful court cases, securing a clean sweep of victories over rules the association asserted were unlawful and unfairly disadvantaged physicians in payment disputes with insurers.
“The NSA was created to protect patients, and it does a great job of that. We have millions of patients who don’t receive out-of-network bills anymore because of the law … But when insurance companies don’t pay IDR awards, it’s not just physicians who lose out,” Dr. Bruggeman said. “Anytime we talk about physicians’ financials, the conversation always concerns patients’ access to care.”
For Texas physicians, the conversation about surprise billing isn’t always at the federal level. Texas has its own surprise-billing protections and dispute-resolution system that predate the NSA, and physicians must navigate the state process alongside the federal one.
Which system applies depends on patients’ insurance coverage, among other factors. Fort Worth radiologist Tilden Childs III, MD, who practices with Radiology Associates of North Texas (RANT), says payers don’t always clearly identify which process governs a claim – meaning practices must determine, claim by claim, whether a dispute belongs in the state or federal process.
Filing through Texas’ arbitration system when it is appropriate and applicable has an important advantage, Dr. Childs adds: enforcement. Failure to pay a state arbitration award within 30 days of the final determination is a Texas Insurance Code violation, giving the Texas Department of Insurance (TDI) direct authority to investigate and penalize insurers.
TDI has used that authority in recent years, including $400,000 in penalties against UnitedHealthcare in 2026 and $800,000 against Cigna Healthcare in 2024.
By contrast, while insurers that fail to pay federal IDR awards can be reported to CMS for investigation, enforcement of the NSA’s payment provisions has been limited so far. Dr. Bruggeman says insurers currently face little to no consequences when they fail to comply with federal IDR decisions – forcing physicians to absorb unpaid awards, which places significant financial strain on many physician practices and negatively impacts patient access to care.
Meanwhile, physicians who do not comply with certain NSA provisions can face civil monetary penalties of up to $10,000 per violation under the law.
“Enforcement is already in place against doctors. You look on the insurer side, and there’s zero,” he said. “All we’re asking is for the federal government to level the playing field.”
Dave Walker, RANT’s chief revenue officer, told Texas Medicine that for a large batch of claims, an insurer reached an agreement with the group rather than proceed through state arbitration. On the federal side, however, RANT reports that despite prevailing in approximately 95% of federal IDR disputes, more than $3.5 million in awarded balances remains unpaid by a Texas health plan.
“On the state side, TDI has enforcement capability,” Mr. Walker said. “So, if [insurers] don’t pay awards, TDI can and will issue penalties. The Texas process actually works compared to the federal process.”
Not all claims are eligible for the state system, however. When network negotiations with self-funded plans break down and out-of-network care becomes more common as a result, Dr. Bruggeman says the federal IDR process is often the only path to payment.
“Texas has some of the narrowest networks in the country,” he said. “As a result, physicians are inevitably going to find themselves out of network and dealing with the federal dispute-resolution process.”
TMA has long pursued changes to the federal IDR process through regulatory comments, advocacy, and litigation. This year, TMA co-signed two American Medical Association letters sent April 27 and May 11 that call on federal regulators and lawmakers to take stronger action against health plans that fail to pay IDR awards.
One letter also notes reports that when an IDR determination awards a higher payment to physicians than an insurer initially offered, some health plans recalculate claims to shift additional cost-sharing obligations onto patients.
Dr. Childs says these practices discourage patients from seeking care while forcing physicians to absorb unpaid costs they are legally owed, pressures that could force some financially stressed practices to stop offering certain services, reduce hours, close their practices, or consolidate.
“If physicians can’t provide care, patients are going to suffer,” he said. “TMA’s work here is to ensure physicians can continue to provide the quality of care that patients deserve.”
Organized medicine therefore is calling on the federal regulators to strengthen enforcement, including by imposing penalties on insurers that fail to apply in-network benefits to care protected by the NSA and heightening transparency in how qualifying payment amounts, or QPAs, are calculated.
Organized medicine is also backing the proposed NSA Enforcement Act. Although the NSA gave CMS the authority to oversee implementation of the IDR process, the proposed legislation would help hold health plans accountable when they do not comply with IDR payment determinations.
If approved, the act would authorize key enforcement actions, including placing penalties on any party that does not adhere to IDR payment timelines following a final, binding IDR determination. (See “No Surprises Act at a Glance,” below.)
“What we need is basically to level the playing field so that the payers and physicians are equally exposed to penalties if they don’t follow the final IDR resolution process,” Dr. Childs said.
TMA is also monitoring new federal rules – finalized by HHS, through CMS, the U.S. Department of Labor, the U.S. Department of the Treasury, and the Office of Personnel Management – that make several operational changes related to the federal IDR process.
The rules address several concerns TMA raised in 2024, including a reduced administrative fee, expanded batching options, and a requirement for plans to use claim-adjustment reason codes and remittance-advice remark codes to help communicate whether a claim is eligible for federal IDR.
Among other changes, the new rules reduce the federal administrative fee from $115 to $15 per party per dispute, expand batching for certain claims, and require payers to provide information through claim-adjustment and remittance-advice codes to help physicians determine whether a claim is eligible for the federal IDR process.
On the litigation front, TMA has successfully sued federal regulators four times asserting they failed to implement the NSA dispute resolution provisions as directed by Congress, with negative consequences for physicians and patients.
Most recently, the full 5th U.S. Circuit Court of Appeals released a decision agreeing with all of TMA’s remaining arguments in “TMA III,” the lawsuit that successfully challenged certain rules that set a faulty methodology for calculating the QPA.
The decision had a nationwide effect. Federal agencies must rewrite their rules to recalculate QPAs used in physician-insurer federal arbitrations, and insurers may no longer calculate QPAs under the unlawful, vacated rules and instead must comply with the text of the NSA.
“TMA has repeatedly urged the federal government to implement the NSA in a manner that is lawful and preserves patient access to care and physician practice viability,” said TMA President Bradford W. Holland, MD. “The appellate court’s decision is another step in the right direction for both patients and the physicians who care for them.”
The Aug. 11 decision upheld a lower district court ruling and represents the last outstanding decision among a clean sweep of four separate NSA-related lawsuits TMA has won against federal regulators tasked with implementing the 2020 federal law.
Those lawsuits have addressed a wide range of NSA implementation issues, such as administrative fee hikes, unlawful limitations on batching of claims for federal arbitration, and improper QPA calculations and weightings.
In its third of four lawsuits against federal regulators, TMA argued federal rules issued in 2021 for calculating the QPA allowed payers to artificially lower the QPA, which resulted in payers offering lower amounts in negotiation, forcing physicians to undergo the law’s costly and time-consuming arbitration process.
Even then, because the QPA is one of several factors arbitrators must consider in the federal IDR process, results would still be skewed in health plans’ favor.
TMA argued that, among other issues, federal rules permitted health plans to include rates of physicians who are not in the same or a similar specialty as the physician involved in the dispute and allowed self-insured plans to effectively opt in to a lower QPA for payment disputes with physicians by using the rates of other self-insured plans.
TMA won on all of the challenged provisions at the district court level. Two of the four provisions were dropped from federal agencies’ subsequent appeal, leaving TMA’s favorable district court decision intact. The issues of “ghost rates” – contract rates with physicians and other health care professionals who do not provide the item or service in question – and total maximum payment amounts were appealed to the 5th Circuit, where a three-judge panel ruled in favor of the federal agencies on those two issues, initially giving TMA a split victory in TMA III.
In a rare move, the 5th Circuit granted TMA’s request for a rehearing in 2025 before the entire court, known as an en banc hearing. Nearly a year later, the full court handed TMA a complete victory by reversing the panel’s decision on both the ghost-rate and total-maximum-payment issues.
In its ruling, the 5th Circuit called the inclusion of ghost rates in the QPA calculation “no minor problem ... The agencies’ error has upended the NSA’s dispute-resolution process.” On the bonus and incentive payment rule, the court agreed with TMA and other plaintiffs that the rule “contravenes the plain text of the NSA and artificially deflates the [qualifying payment amount] calculations.”
“These unlawful rules contributed to unfair negotiating practices by insurers and a dramatic increase in physicians and providers having to seek arbitration with insurers in order to obtain fair payment and keep their practices viable enough to provide patient care,” Dr. Holland said.
Dr. Bruggeman called the decision a “direct result” of TMA’s work to protect physician practices – and patients’ access to care.
“This is the latest chapter in a fight TMA has been leading since day one, and I’m proud to be a longstanding TMA member,” Dr. Bruggeman said in a statement. “TMA’s litigation strategy on QPA methodology has been one of the most consequential efforts in the country for protecting independent physician practices.”
No Surprises Act at a Glance
What is the No Surprises Act?
Effective Jan. 1, 2022, the federal No Surprises Act (NSA), among other things, protects patients from certain unexpected out-of-network balance bills, particularly for out-of-network emergency care, out-of-network services provided at in-network facilities, and out-of-network air ambulance services. The NSA generally prohibits balance billing in these situations and limits patients’ cost-sharing to roughly the amount they would have owed for in-network care. A balance bill is the balance that remains (after patient cost sharing) if an insurer does not cover the full out-of-network fee.
What is the federal independent dispute resolution process?
The NSA requires health plans and physicians to resolve certain out-of-network payment disputes through an independent dispute resolution (IDR) process, rather than leaving patients responsible for the difference. Some states, like Texas, have both a state and a federal arbitration process. Some of the key steps in the federal process are:
Open negotiation: If not satisfied with the initial payment, either party can initiate a 30-business-day open negotiation period: The open negotiation notice must be sent by the initiating party within 30 business days of receiving the initial payment or notice of denial of payment. Under new federal rules, the process is initiated through the federal IDR portal, creating a record of when the negotiation period begins and ends.
IDR initiation: If the parties cannot reach an agreement during open negotiation, either party has four business days after the close of the open negotiation period to initiate federal arbitration, at which point the dispute can proceed to a certified IDR entity. The federal government selects an entity if the parties do not jointly select one.
Submission of offers: Each side submits a proposed payment amount and supporting information. The certified IDR entity considers the parties’ offers and factors required by the NSA, including the qualifying payment amount, or QPA, the complexity of the service, the physician’s training and experience, and other statutory factors.
The QPA is generally the median contracted rate recognized by the plan or issuer on Jan. 31, 2019, for the same or similar service furnished by the same or similar specialty and in the same geographic area, with annual inflation updates. It is one of the factors the certified IDR entity must consider when determining a federal IDR award and choosing between the physician’s and health plan’s offers.
Through four separate lawsuits, the Texas Medical Association has successfully challenged certain federal rules implementing the NSA, arguing they conflicted with the language of the federal law and created an unfair process, which was skewed to benefit insurers and negatively impacted physicians and patient access to care.Texas vs. federal surprise billing laws: What’s the difference?
Effective in 2020, Texas Senate Bill 1264 created Texas’ own surprise-billing protections, predating the NSA. State-regulated, fully insured plans (as well as certain other plans discussed below) generally are subject to Texas’ requirements. Self-funded or self-insured employer health plans generally fall under federal regulation unless they opt in to the application of the Texas law regarding IDR for the relevant plan year.
The Texas Department of Insurance (TDI) oversees the state’s surprise-billing protections and its state dispute-resolution system. Although the NSA is a federal law, its enforcement is split between the federal government and the states. Federal agencies are generally responsible for self-funded plans and enforcement when a state lacks authority or fails to substantially enforce the law.
Federal: The NSA applies to most group and individual health plans and self-insured Employee Retirement Income Security Act (ERISA) plans. The law protects patients from certain surprise bills for out-of-network emergency services, out-of-network nonemergency services provided by out-of-network physicians at in-network facilities, and out-of-network air ambulance services.
Texas: The state law applies to state-regulated health plans – PPO, EPO, and HMO plans, as well as Employee Retirement System/Teacher Retirement System plans, and plans offered by certain nonprofit agricultural organizations. The state law also applies when self-funded or self-insured ERISA plans opt in to the law. State protections cover out-of-network emergency care, out-of-network services provided by facility-based providers at in-network facilities, and certain out-of-network diagnostic imaging and laboratory services connected to in-network care. It doesn’t apply to air ambulance services.
At both the state and federal levels, insurers that lose an IDR dispute must pay the additional amount owed under the determination within 30 days.
The NSA and surprise billing law processes are intended to protect patients from surprise out-of-network balance bills. TMA is supportive of the goals of both sets of laws, but believes it is important that the laws make arbitration easily accessible to physicians, as well as contain appropriate factors for consideration and sufficient enforcement mechanisms to motivate payers to make timely payments.
Physicians also note that it is important for the agencies to implement the arbitration process fairly and in a manner that is consistent with the law. When the QPA calculation is illegally skewed, the cost of undergoing arbitration is excessive, or when insurers delay or fail to make payments after physicians win an arbitration, physicians absorb unpaid costs. That, in turn, can negatively impact physician practice viability, forcing some to close their practices, consolidate, or make other decisions that may ultimately impact patients’ access to care.
What is the federal government doing?
In May 2026, the U.S. Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), along with the U.S. Department of Labor and the U.S. Department of the Treasury, and with the Office of Personnel Management, finalized new rules intended to improve the operation of the federal IDR process by streamlining communication, clarifying timelines, and making it easier to determine whether a dispute is eligible for IDR.
The final rules include language to address several concerns TMA raised in 2024, including the reduced administrative fee, expanded batching options, and the requirement for plans to use claim-adjustment reason codes and remittance-advice remark codes to help communicate whether a claim is eligible for federal IDR.
Health plans must provide information through claim-adjustment and remittance-advice codes for items/services furnished on or after Jan. 1, 2027. In guidelines, CMS says it will release functional support for batched IDR services by Nov. 1. Batching will apply to disputes with open negotiation period start dates on or after Nov. 1.
Congress also introduced the NSA Enforcement Act in 2025. The proposed legislation would increase enforcement when health plans and insurers violate the NSA’s balance-billing requirements. If approved, the act would:
TMA has long pursued changes to the federal IDR process through regulatory comments, advocacy, and litigation. This year, TMA co-signed two American Medical Association letters sent April 27 and May 11, asserting that when the NSA’s IDR process results in an award in physicians’ favor, some health plans are not paying within the statutory 30-day timeframe, are paying only a portion of what they owe, or are not paying at all. The letters urged federal officials and lawmakers to strengthen enforcement of the NSA, including by supporting the NSA Enforcement Act.
TMA has filed and won four lawsuits against federal agencies challenging how the NSA’s federal IDR system has been implemented. The lawsuits have addressed a wide range of NSA implementation issues, such as administrative fee hikes, unlawful limitations on batching claims for federal arbitration, and improper QPA calculations and weightings.