Taking the Disputes Out of Dispute Resolution: Lessons from State Balance Billing Laws

An older woman sits at a kitchen table looking at her mail.

An analysis of states’ experiences resolving surprise medical payment disputes between health care providers and insurers offers important lessons for the development of a national independent dispute resolution (IDR) system.


The Issue

Under a federal law enacted last year, patients are no longer held financially responsible for surprise medical bills, which typically occur when a health care provider who is not in a patient’s insurance network bills for services at a higher rate than an in-network provider. Fourteen states currently operate IDR systems, which use arbitration to resolve payment disputes, yet their structures and dispute outcomes vary. Congress has charged the U.S. Departments of Health & Human Services, Labor, and Treasury with creating a national IDR system to resolve payment disputes between health care providers and insurers before the law takes effect in January 2022.  

Key Findings

Researchers carefully examined four states—Colorado, Washington, Texas and New Jersey—and highlight these key differences.

  • In Colorado and Washington, states that sparingly resort to arbitration, physicians report that the risks of the arbitration process outweigh the benefits. Physicians in Colorado risk paying arbitration costs in full if they lose the dispute.

  • In Texas and New Jersey, states that see an exceptionally high rate of disputes, the arbitration process more often tilts in favor of providers. One factor could be that arbitrators in both states consider the provider’s full billed charge, which is not competitively determined.


Federal agencies must consider a diversity of IDR approaches and outcomes, as well as various external forces at play in states across the United States, to build a balanced and effective federal structure for IDR.

About Georgetown University’s Center on Health Insurance Reforms

The Center on Health Insurance Reforms (CHIR), based at Georgetown University’s McCourt School of Public Policy, is composed of a team of nationally recognized experts on private health insurance and health reform. CHIR works regularly with a multidisciplinary group of faculty and staff dedicated to conducting research on issues related to health policy and health services. CHIR faculty and staff study health insurance underwriting, marketing and products, as well as the complex and developing relationship between state and federal rules governing the health insurance marketplace. CHIR provides policy expertise and technical assistance to federal and state policy-makers, regulators and stakeholders seeking a reformed and sustainable insurance marketplace in which all consumers have access to affordable and adequate coverage.