Balance Billing After the No Surprises Act: What's Still Falling Through the Cracks

The Law Didn't Fix Everything

The No Surprises Act was supposed to end surprise medical bills. For a narrow set of situations, it helped. But your employees are still getting balance billed. And most of them don't know why it's still legal.

The law has real gaps. Ground ambulance. Scheduled non-emergency care. Facility fee arbitrage. And the dispute resolution process behind it is being gamed by private equity-backed provider groups at a scale nobody anticipated.

Since the IDR process launched, 4.8 million disputes have been filed through the end of 2025. That's not a system working as designed. That's a new front in the billing war, and self-funded employers are paying for it.

What Does the No Surprises Act Actually Cover?

The core protection is narrow. The law bans balance billing for:

• Emergency services at any facility, regardless of network status.
• Non-emergency services at in-network facilities from out-of-network providers (the anesthesiologist you didn't choose, the radiologist you never met).
• Air ambulance services from out-of-network providers.

In those situations, patients owe only their in-network cost-sharing amount. The provider and insurer fight it out through the IDR process.

Both self-funded and fully-insured plans get identical front-end protection under the federal law. Your employees won't see a surprise bill for a covered scenario. But "covered scenario" is doing a lot of work in that sentence.

Where Are Employees Still Getting Balance Billed?

Ground ambulance is the biggest gap. The No Surprises Act explicitly excludes ground ambulance services. That's not a loophole. It's written right into the law.

Only 22 states have implemented protections against ground ambulance balance billing as of 2026, according to the Commonwealth Fund. That leaves patients in 28 states with zero protection.

And here's the part that matters most for self-funded employers: state ground ambulance laws don't apply to ERISA plans. Since roughly 60% of workers with employer coverage are in self-funded plans, the majority of your employees have no protection at all. A federal advisory committee recommended capping patient cost-sharing for ground ambulances at the lesser of $100 or 10% of the bill. Congress hasn't acted on it.

Median ground ambulance balance bills run about $450 nationally, but in states like California they average $1,200. If your workforce spans multiple states, the patchwork gets complicated fast.

The other gap: scheduled, non-emergency care at out-of-network facilities. If your employee chooses to get a knee replacement at an out-of-network hospital, the law doesn't help. Neither does it cover post-stabilization transfers where the patient consents to out-of-network care. These are the situations that produce five-figure bills.

Who's Winning the IDR Process?

Providers. Overwhelmingly.

According to CMS data for 2025, providers win 88% of IDR disputes. Eighty-seven percent of award amounts exceeded the qualifying payment amount (QPA). The mean winning offer was 2.65 times the QPA.

But the averages hide the real story. A handful of private equity-backed provider groups have turned the IDR process into a profit center.

Georgetown CHIR data for Q1-Q2 2025 shows the scale:

Radiology Partners, a PE-backed firm, filed 136,784 disputes alone. The top three initiating parties accounted for 43% of all disputes in the second half of 2024. All ten of the top ten filers are affiliated with private equity, according to the PE Stakeholder Project.

These aren't small practices fighting for fair reimbursement. They're well-capitalized firms with dedicated arbitration teams systematically extracting above-market payments through a process designed to protect patients, not generate profit.

How Much Is the IDR Process Costing Your Plan?

More than you think. Georgetown CHIR estimates the IDR process has added at least $5 billion in total costs to the healthcare system since 2022. That includes $218 million in administrative fees, $636 million in IDR entity fees, and roughly $1.9 billion in internal processing costs.

For self-funded employers, these costs hit directly. When a provider wins an IDR award at 2.65 times the QPA, your plan pays it. There's no carrier buffer. That's showing up in stop-loss renewals and driving carriers to reprice risk.

And there's an enforcement gap making it worse. Twenty-two percent of insurers failed to pay IDR awards in the most recent year surveyed. The Supreme Court declined in January 2026 to review whether providers can enforce IDR awards in federal court. So the system generates above-market payments when it works and unpaid awards when it doesn't. Neither outcome helps employers.

There's one positive regulatory change. In May 2026, HHS slashed the IDR administrative fee from $115 to $15 per party per dispute and raised the batching limit from 25 to 50 items. That'll reduce per-dispute costs but won't fix the structural incentive that drives PE-backed groups to file in volume.

Why Do Facility Fees Keep Climbing?

This isn't technically a No Surprises Act gap, but it's the same problem wearing different clothes. When a physician practice gets acquired by a hospital system, the same office visit in the same building can suddenly cost 2 to 4 times more because it's now classified as a hospital outpatient department.

A chest x-ray that costs $17.22 in a physician office costs $66.52 in a hospital outpatient department, according to KFF. Radiation therapy: $155.65 vs. $376.93. Same service. Same clinician. Different billing code.

CMS expanded site-neutral payment policies in 2026, reducing rates for drug administration services at off-campus hospital departments by roughly 60%. That saves an estimated $290 million in the first year. But the Congressional Budget Office estimates full site-neutral alignment would save $157 billion over the next decade.

Your employees are paying the difference. And so is your plan. If your network is routing members to hospital-owned facilities when independent alternatives exist, you're absorbing a facility fee premium on every visit. Centers of excellence and ambulatory surgery centers can deliver the same care without the markup.

Does the No Surprises Act Protect Self-Funded Plans Differently?

At the federal level, no. Both self-funded and fully-insured employees get the same balance billing protections under the No Surprises Act.

But the real-world gap is significant. Fully-insured plans must comply with both federal and state surprise billing laws. Many states go further than the federal floor. Self-funded ERISA plans are subject only to federal law. State protections, including ground ambulance laws now in 22 states, don't apply.

That means your employees in a self-funded plan have:

• No ground ambulance balance billing protection in any state (unless your plan voluntarily opts in).
• No access to state arbitration processes that may produce different (sometimes better) outcomes.
• Direct exposure to IDR costs that flow straight to the plan.

If you're evaluating the transition from fully insured to self-funded, this is one of the trade-offs worth modeling. The cost savings from self-funding are real. But so is the exposure in these specific gaps.

What Should Self-Funded Employers Do?

The No Surprises Act took the biggest surprise bills off the table. But the gaps are real, and self-funded plans are more exposed than most employers realize.

1. Review your plan document for ground ambulance coverage. Does your plan voluntarily apply balance billing protections to ground ambulance services? If not, your employees in 28-plus states have no protection. You can adopt protections unilaterally in your plan design.
2. Track IDR costs. Ask your TPA how many IDR disputes hit your plan in the last 12 months, what the average award was relative to QPA, and which provider groups are initiating. If PE-backed staffing companies are driving above-market awards against your plan, that's a claims trend worth flagging before stop-loss renewal.
3. Audit facility fee exposure. Pull your claims data and look for procedures billed at HOPD rates that could have been done in a physician office or ASC. The differential can be 2-4x for the same service.
4. Steer toward lower-cost settings. Centers of excellence and direct primary care arrangements route your employees to settings where facility fee arbitrage doesn't apply.
5. Stay ahead of the compliance calendar. The No Surprises Act's regulatory landscape keeps shifting. New IDR rules, QPA enforcement timelines, and potential ground ambulance legislation all affect plan design. The Benefits Blake Compliance Calendar tracks all of it.
6. Model the exposure. Ground ambulance gaps, IDR cost pass-through, and facility fee inflation compound over time. The 5-Year Benefits Blueprint projects where these trends take your plan spend.

The No Surprises Act made things better. But "better" isn't "fixed." And the gaps that remain hit self-funded employers harder than anyone else.