In Contested Payment, Participation Beats Merit
Analysis · Pinnacle Services Corporation · September 2026
When Congress wrote the No Surprises Act, regulators projected that its arbitration process would handle about 17,000 disputes a year. In 2025 there were 2.5 million. In the first five months of 2026 there were 1.4 million more. Ten filing organizations account for roughly two-thirds of the volume, and providers prevail in more than 85% of determinations, at a median award more than four times the insurer's benchmark rate. Awards in 2025 came to nearly $15 billion, against about $4 billion the year before.
Those figures come from three places at once: a Georgetown University analysis published on August 26, which put the process's excess cost at $22.4 billion over four years, $16.6 billion of it in 2025 alone; a Fifth Circuit ruling on August 11 that found the benchmark rate had been built partly on "ghost rates," one-dollar contract placeholders for services a provider never performs; and a set of oversight letters sent on September 3 by the ranking Democrat on the House Energy and Commerce Committee to six arbitration firms, with answers due September 24. The letters ask, among other things, whether automated or algorithmic tools take part in payment determinations.
Read as an operating statistic rather than a scandal, the arbitration record says one thing clearly. In a contested-payment system, outcomes track participation far more than merit. The parties who file, win. The parties who absorb the write-off are not judged at all.
Winning is not collecting
Even the winners have to chase the money. An Emergency Department Practice Management Association survey found that 24% of arbitration determinations went unpaid or were paid incorrectly within thirty days. On August 24, Dignity Health sued a Medi-Cal managed-care plan over more than $30 million in unpaid bills across more than 5,000 claims; the complaint describes a claims system installed in 2024 without sufficient testing, non-compliant remittance advices, unpaid contracted rates and improper denial codes on tens of millions of dollars of claims. The plan declined to comment. Becker's counted a dozen state fines for claims handling this year — $1.3 million against Health Net in California for mishandling provider payment disputes, $80,000 against Cigna in Maryland for an automatic downcoding policy the state had not allowed — sums that do not change the arithmetic for anyone who is not a hospital system with litigation counsel.
The mechanism underneath all of it is the same. Adjudication is software, and software ships with defects. When the payer's system is wrong, the remittance is still final until someone contests it, and the correction is the provider's job.
Who is not in the argument
Independent laboratories are conspicuously absent from the arbitration dockets, and not from indifference. The arithmetic of a laboratory denial queue is the arithmetic of silence.
In the composite book of Recovr's laboratory customers — 1.76 million denied claims over twelve months — 74.6% of denied claims were never touched again after the first remittance posted. Only 13.6% received more than one rework attempt. The balance was absorbed as write-off or aged into the payer's filing limit. On the twelve-month book of a national collection of more than 12,000 physicians, the models identified 77,500 denials worth $8.6 million that were recoverable but passed their filing deadlines unrecovered, scored at 52% average odds of success and $4.4 million in expected recovery. That money was not lost in an argument. It was lost to the calendar.
Even the long-odds motions pay when they are actually filed. Between February and July, Recovr agents filed 932 reconsiderations on timely-filing denials — claims every conventional workflow writes off — after finding that payers were applying a 90-day limit to Medicare Advantage plans whose contractual window is 365 days. Of the 463 decided by July 20, 48 came back overturned or revised. A 10.4% win rate on money that was booked at zero is found money, and it costs the agent minutes rather than the industry-benchmark forty-five of staff time.
The window
Washington is already being urged to rein the arbitration process in, and the September letters are the beginning of that, not the end. The premium on contesting payment is a window, not a fixture. What it has demonstrated, in four years and six million filings, is that the right to contest a claim is universal and the capacity to contest at scale is engineered. Payers built that capacity first. The provider organizations that filed two-thirds of the disputes built it second. Laboratories, for the most part, have not built it at all.
Reimbursement does not go to the strongest claim. It goes to the party still in the argument.
Sources: Healthcare Dive, "No Surprises dispute resolution has generated $22B in extra costs, research finds," August 26, 2026, on the Georgetown Center on Health Insurance Reforms analysis; Becker's Payer Issues, "The never-ending No Surprises saga," August 13, 2026, on the Fifth Circuit ruling of August 11, the WSJ analysis of award totals and the EDPMA survey; House Energy and Commerce Committee Democrats, press release of September 3, 2026, and Fierce Healthcare and Becker's Payer Issues coverage of September 3–4; Becker's Payer Issues, "Dignity sues Medi-Cal plan, claiming $30M in unpaid bills," and "12 recent payer fines from states," both September 10, 2026. Laboratory composite figures are from Recovr's July 2026 case study; physician-book figures are from Recovr's denial analytics for a national collection of more than 12,000 physicians and are model-identified, not realized recoveries.
