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UnitedHealthcare is joining the choir of insurers calling for No Surprises Act arbitration reform, arguing the system’s independent dispute resolution process has strayed far from its original congressional intent.
Why UnitedHealthcare Is Pushing for No Surprises Act Arbitration Reform
“The IDR process is not working, certainly not as Congress intended it, and it needs to be reformed,” Dan Kueter, CEO of the insurer’s employer and individual business, said on UnitedHealth Group’s second-quarter earnings call July 16. Kueter said the independent dispute resolution process is “being exploited by select providers and select geographies,” adding about 50 basis points of incremental cost trend in 2026 and now accounting for at least 100 basis points of total commercial cost at the company.
Concentration Among a Few Disputing Entities
According to the insurer, upwards of 40% of claims that enter the IDR process are ineligible, and roughly 60% of arbitration cases are brought by just five entities, a concentration Kueter said marks a shift from prior years. When arbiters side with out-of-network providers, the average payout is now 11 times what Medicare would pay, with some determinations reaching 30 times Medicare rates, he said.
Other Cost Pressures Behind the Push for No Surprises Act Arbitration Reform
NSA arbitration is one of several pressures the insurer said is keeping commercial costs elevated. Kueter also cited rising provider coding intensity, particularly for office visits and emergency department care, along with specialty drug spending that includes anti-inflammatory medications and GLP-1s.
Dispute Volume Far Exceeds Original Projections
UnitedHealthcare told Becker’s it is now seeing roughly 100,000 IDR disputes a month. CMS originally projected about 22,000 disputes a year across the entire process, and more than 5 million disputes have been filed since the portal launched in 2022, according to the Congressional Budget Office. Providers won 85% of disputes in 2024 at median payment determinations of 459% of the qualifying payment amount, according to a study published in Health Affairs.
Who Actually Bears the Cost Under Current Arbitration Rules
UnitedHealthcare also noted that much of the cost lands outside its own book of business. For self-funded plans, which cover most people with employer-sponsored coverage, arbitration awards are paid by the plan sponsor versus the insurer administering the benefits, a distinction that adds nuance to how No Surprises Act arbitration reform would actually redistribute financial impact.
Commercial Cost Trends Running Above Expectations
“Commercial costs are stubbornly high, rising above expectations, which we believe is consistent with what is being experienced across the sector,” UnitedHealthcare CEO Tim Noel said on the earnings call, adding that medical cost trends are running modestly above the 11% level the insurer previously reported. He said commercial margin recovery “will remain a focus area longer than originally anticipated” and extend past 2027.
Courts Continue Rejecting Insurer Arguments Ahead of Any No Surprises Act Arbitration Reform
Federal courts, meanwhile, have not been receptive to insurers’ ongoing arguments that the arbitration system is being gamed. On July 10, a federal judge dismissed with prejudice a lawsuit from Elevance Health’s Blue Cross Blue Shield of Georgia that accused billing company HaloMD and two physician groups of defrauding the insurer through the IDR process. Judge Thomas Thrash Jr. wrote that it was “highly plausible to infer that the Plaintiff engages in a consistent practice of submitting lowball offers to out-of-network providers in an effort to maximize its profits.” Elevance said it plans to appeal.
A Pattern of Dismissed Lawsuits
Judges in California and Texas dismissed similar insurer lawsuits against HaloMD in April and May, ruling that judicial review of arbitration determinations is narrowly constrained. Last August, UnitedHealthcare filed a lawsuit against Radiology Partners and its Arizona affiliate Sonoran Radiology, alleging the companies misused the IDR process by routing in-network claims through Sonoran to make them appear out-of-network and initiating arbitration on tens of thousands of claims.
Recent Regulatory Changes Amid Calls for No Surprises Act Arbitration Reform
The Trump administration finalized an overhaul of the process in late May that established a centralized disputes portal, created a federal payer registry and cut per-dispute administrative fees from $115 to $15, though insurers and employer groups are pressing for further action. On July 13, the Coalition Against Surprise Medical Billing, which includes industry trade group AHIP, launched a six-figure ad campaign opposing the No Surprises Act Enforcement Act, a bipartisan bill that would raise penalties on plans and providers that miss payment deadlines after arbitration.
UnitedHealth Group’s Strong Quarterly Results
UnitedHealth Group raised its full-year 2026 earnings outlook and posted nearly $5.5 billion in profit in the second quarter, up sharply from the same period last year. UnitedHealthcare’s earnings from operations were $3.9 billion, a 90% increase year over year, with an operating margin of 4.6% compared to 2.4% in Q2 of 2025. The insurer has nearly 30 million commercial members.
What This Means Going Forward
With UnitedHealthcare now joining Elevance, Aetna, and other major insurers in publicly pushing for No Surprises Act arbitration reform, pressure on federal lawmakers to revisit the IDR system’s structure is likely to continue building. Given that courts have consistently declined to intervene in individual arbitration disputes on insurers’ behalf, legislative reform, rather than litigation, appears to be emerging as insurers’ primary remaining avenue for addressing what they describe as a system increasingly exploited by a concentrated group of providers and billing companies.
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