The No Surprises Act’s Surprises: Arbitration, Provider Network, and Insurer Pricing

The No Surprises Act (NSA) capped patients' liability for surprise bills and established federal final-offer arbitration for insurer–provider payment disputes. Linking arbitration records to the national longitudinal provider-insurer network panel and plan design data in the ACA marketplace, we find that the NSA reduced provider network participation in the specialties and states most affected by the reform, contrary to the standard prediction that removing balance billing makes network participation more attractive. The decline is consistent with arbitration strengthening providers' outside option: arbitration is high-volume and provider-favorable, with awards well above the statutory benchmark; and network participation declines after provider groups' first favorable arbitration outcomes. Suggestive evidence indicates that insurers more exposed to arbitration raise premiums. These results reveal an unintended consequence of the NSA: the law's direct consumer protections may be accompanied by narrower networks and higher premiums.