The Trump administration wants to reform a federal system for resolving medical billing disputes it says is being “gamed,” a Medicare spokesman said Wednesday.
Congress passed the No Surprises Act in 2020 to eliminate the surprise bills that patients received after emergency care from doctors that did not take their insurance. The law created an arbitration system in which out-of-network doctors and insurers could settle on a fair price.
While the law has been widely seen as successful in protecting patients from medical bills, it has also generated huge paydays for certain doctors and the billing firms that help them file cases.
The New York Times has reported on plastic surgeons who collected a total of $440,000 for one breast reduction operation, and a doctor who was awarded $196,566 for assisting a scoliosis operation.
“The system is being gamed to get higher prices, and C.M.S. is actively working to clean it up,” said Christopher Krepich, a spokesman for the Centers for Medicare and Medicaid Services, which runs the program and published new data on cases and payments Wednesday. The agency declined to comment on any specific actions officials were pursuing.
Doctor payouts under the No Surprises Act hit almost $15 billion in 2025, after $4 billion was paid out in 2024, according to new data that C.M.S. released Wednesday.
The data included a few implausibly large awards, like nine payments for emergency room visits that were more than $200 million each in 2025. It is unclear if those amounts were actual awards or errors.
The Wall Street Journal first reported the rising payments.
The number of cases filed grew to 2.5 million last year, from 1.4 million in 2024. Doctors won more than 85 percent of them.
Arbitration firms, which decide the cases, have also profited, collecting $1.3 billion last year, compared with $559 million in 2024.
The Trump administration has taken few actions to modify the system so far. The statement Wednesday is the first public indication that health officials think something is amiss.
“This is the first time that someone at C.M.S. has specifically said that the system is being gamed,” said Lawson Mansell, a senior health policy analyst at the Niskanen Center, who has been calling for policy changes.
When legislators wrote the No Surprises Act, they focused on emergency treatment — the patients who went to the emergency department at a hospital that accepted their insurance only to be treated by doctors who didn’t.
Under the system, each side submits its final offer to an independent arbitrator who picks the most reasonable one. Compromise awards are not permitted, and appeals are not allowed. In one case The Times reported, an arbitrator had to decide between offers of $105 and $100,000 for work assisting in a breast reconstruction surgery. The arbitrator selected the doctor’s bid.
Lawmakers expected arbitration would be rarely used, with one government forecast estimating 17,000 disputes filed each year.
A growing number of medical providers and billing firms have begun using it to obtain higher payments for scheduled procedures, such as back operations and insertions of long-term contraceptives, The Times reported earlier this year.
They are often requesting and winning payments that are tens or hundreds of times as high as what insurance typically pays.
Two large health insurers, UnitedHealthcare and Elevance, formerly Anthem, have told investors that the high payouts were leading to an increase in premiums for employers and individuals. Smaller plans covering unions, employers and state workers have also cited the law as a factor in rising insurance prices.
Doctors and billing companies have argued that insurers are trying to underpay doctors, leading arbitrators to repeatedly rule against them.
“The only gaming of the system is being done by insurers,” said Christopher Sheeron, president of Action for Health, a group that represents medical providers. “They are losing in federal arbitration on purpose in an effort to overhaul the law in their favor.”
HaloMD, the medical billing company that files the most arbitration claims on behalf of doctors, acknowledged that “a handful of organizations” may be taking advantage of the No Surprises Act.
“We support C.M.S.’s desire to weed out bad actors,” the spokesman Patrick Velliky said, so that the arbitration process “can remain available to the vast majority who are using it as intended to secure fair and sustainable reimbursement.”
The Trump administration finalized one regulation under the law earlier this year, largely focused on technical aspects of how the disputes are filed. The administration lowered the fees required to file a case because the government was collecting more money from filing fees than it needed to run the program. Officials estimated the change would cause an additional 30 percent increase in the number of filings.
Legislators have shown little appetite for revising the No Surprises Act, citing its success in protecting patients from surprise medical bills. The law passed with wide bipartisan support, overcoming fierce lobbying battles.
The only bill to reform the law that has been introduced would increase penalties for insurers who fail to promptly pay doctors after losing cases.
