WASHINGTON — The federal agency that runs Medicare has removed two companies from the programme that sets doctor pay for surprise medical bills, after new data showed payouts under the law surged to almost $15 billion in 2025. It is the first such removal since the system began in 2022, and a sharp crackdown on a process the Trump administration says doctors and billing firms have gamed.

The Centers for Medicare & Medicaid Services (CMS) said on Wednesday, November 4, 2026, that it had decertified Island Peer Review Organization Inc. and Network Medical Review Company LLC. The two firms were among the independent arbitrators — formally, independent dispute resolution entities — settling payment disputes between doctors and insurers for out-of-network care.

New CMS figures show how large, and how lopsided, the system has become: payouts under the No Surprises Act reached almost $15 billion in 2025, up from $4 billion in 2024. Cases filed grew to 2.5 million from 1.4 million, and doctors won more than 85 percent. One firm sided with doctors in 96 percent of its cases, and firms collected $1.3 billion in fees last year, up from $559 million.

Key Points

• CMS decertified Island Peer Review Organization Inc. and Network Medical Review Company LLC on November 4, 2026 — the first since the programme began in 2022.
• Doctor payouts hit almost $15 billion in 2025, up from $4 billion in 2024, per new CMS data.
• Cases rose to 2.5 million from 1.4 million; doctors won more than 85 percent of disputes.
• One firm ruled for doctors in 96 percent of its cases; firms collected $1.3 billion in fees in 2025, up from $559 million.
• CMS says the system is being gamed for higher prices and is working to clean it up.

What Happened

The two firms are no longer certified to decide surprise billing disputes, in what appears to be the first such removal since the programme began in 2022. CMS released the decision with fresh data on the programme.

Payouts nearly quadrupled in a year, filings jumped from 1.4 million to 2.5 million, and doctors won more than 85 percent of disputes. The firms have become big earners: $1.3 billion in fees last year, more than double the $559 million of 2024, with the losing side generally paying the fee. The move follows New York Times reporting on billing firms winning payments tens or hundreds of times what insurance typically pays — including $440,000 for one breast reduction operation.

Background: How the No Surprises Act Works

The No Surprises Act, passed in 2020 and in effect since January 2022, protects patients from one of the most dreaded features of American health care: the surprise bill. Before the law, a patient at an in-network hospital could be treated by an out-of-network doctor and receive a bill for the full charge, sometimes tens of thousands of dollars. Under the law, patients pay only what they would have owed in network.

The rest goes to negotiation between the provider and the insurer. If they cannot agree within 30 days, either side can take the dispute to an independent arbitrator, who runs a "baseball-style" process: each side submits its best offer and the arbitrator must pick one. The arbitrators are private companies certified by CMS. Congress meant the process as a rarely used backstop; instead it has become a high-volume industry, with 2.5 million cases in 2025 alone.

Surprise Billing Arbitrators Under Scrutiny

The scale of the system is now the central issue. Almost $15 billion flowed to doctors through arbitration in 2025, nearly four times the year before, and doctors won more than 85 percent of disputes. One firm's 96 percent win rate for doctors has drawn particular attention: arbitrators are supposed to be neutral referees choosing between two offers.

Fee income is a second concern. Firms collected $1.3 billion in 2025, up from $559 million in 2024. Critics argue the fee structure gives arbitrators a financial interest in a busy docket, since the losing side pays. Supporters say the fees reflect the volume of disputes. The $440,000 breast reduction payment reported by The New York Times has become the emblem of the row.

Reactions and Quotes

CMS did not mince words: "The system is being gamed to get higher prices, and C.M.S. is actively working to clean it up," spokesman Christopher Krepich said. It is the administration's most concrete step yet to back up that claim. Insurers have argued the same for months; the trade group AHIP says the administration agrees the law is being gamed by doctors.

Doctors' groups argue the opposite: insurers use the law's payment benchmark to underpay, and arbitration is the only mechanism forcing a fair price. They cite the same win rates as proof insurers' opening offers are unreasonably low. Neither firm has publicly responded so far; CMS has not said whether they can appeal or reapply.

Why It Matters

Patients do not pay the arbitration awards — the law still shields them, and nothing in Wednesday's announcement changes that. But the fight over who pays lands on patients eventually, as higher payments feed into higher premiums and $15 billion in payouts flows into what families pay for coverage. The scale also matters for the law's credibility: if the backstop looks like a money machine for one side, support could fray, and with it patient protection.

What Happens Next

The remaining firms will absorb the two companies' caseload; the question is whether the system can handle the volume without long delays. CMS says it is "actively working to clean it up," suggesting further changes — new arbitrator rules, tighter certification, or fee changes — though rulemaking takes months. The decertified firms could challenge the decision, and Congress may face pressure to revisit the design.

Frequently Asked Questions

What is a surprise medical bill? A charge for out-of-network care a patient did not choose, such as treatment by an out-of-network doctor at an in-network hospital. The No Surprises Act limits what patients in those situations must pay.

What do surprise billing arbitrators do? When a doctor and an insurer cannot agree on payment, an independent arbitrator certified by CMS picks one side's offer in a baseball-style process. The decision sets the payment, and the losing side generally pays the fee.

Why did CMS remove the two firms? CMS decertified the two firms on November 4, 2026, saying the system is being gamed for higher prices. It was the first decertification since the programme began in 2022.

How much are doctors winning under the law? Doctors won more than 85 percent of disputes in 2025, with payouts reaching almost $15 billion, up from $4 billion in 2024. One firm sided with doctors in 96 percent of its cases.

Does this change what patients pay? No. The Act still protects patients from surprise bills, and the decertifications do not change patient cost-sharing. The dispute is between doctors and insurers over provider pay.

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