Pallone proposes replacing arbitration in surprise medical billing law
Rep. Frank Pallone Jr. introduced a bill to revise the No Surprises Act by removing its arbitration process for out-of-network payment disputes. The proposal would instead set payments using the median in-network rate and require payment within 30 days of a claim. Pallone argued that the current arbitration system is being abused and is driving up premiums, while providers have opposed median-rate payment models.
Pallone, the House Energy and Commerce Committee’s ranking Democrat, introduced the bill Thursday. It would revise the 2020 No Surprises Act, which aimed to protect patients from large bills after out-of-network care. Under current policy, insurers and providers arbitrate certain payment disputes; providers usually win, with awards averaging more than six times local in-network rates and $15 billion added in 2025.
When the 2020 law was drafted, insurers and some lawmakers wanted median in-network rates, but providers objected, arguing that insurers would gain too much leverage. The Ways and Means Committee, then led by Richard Neal, preferred arbitration; Neal has criticized its rollout. Quick enactment appears unlikely, but Pallone could set committee priorities if Democrats win the House.
If arbitration were replaced, out-of-network providers—hospitals, physician groups, and others—could receive lower payments, while insurers might gain more predictable costs. Patients and employers may benefit if premium growth slows, though provider participation or access could be affected if payments fall. A 30-day payment requirement might speed claims but could add compliance pressure. Since near-term passage is unlikely, these effects remain speculative.