Profiting on all sides: Private equity and the No Surprises Act

Private equity has played a major role in the issue of surprise medical billing. The 2020 bipartisan No Surprises Act[1] attempted to address the issue of patients receiving high out-of-network bills after being treated at a supposedly in-network facility. While patients now face fewer surprise bills because of the law, recent research shows that the legislation has led to an estimated $5 billion in costs, which will likely hit patients in the form of higher premiums.[2] How did this happen? The answer has to do with an arbitration process that was built into the final version of the law – a provision that provider groups, including a private equity-backed dark money group, lobbied for.[3]

The arbitration process is a venue to address conflicts regarding payment between those providing care, such as physicians and the staffing companies they work for, and those paying for the care, such as health insurance companies. This arbitration process—called the independent dispute resolution (IDR) process—gives providers and payers a forum to determine out-of-network payment amounts when providers/facilities and health plans cannot reach an agreement on costs for patient care after it has been provided.[4]

Private equity-backed providers have consistently dominated the list of companies bringing cases to the IDR process, which has been overwhelmed by the sheer volume of disputes. In addition, multiple entities that contract with Centers for Medicare & Medicaid Services (CMS) to implement dispute resolution are private equity-backed. At least two private equity firms have investments in both a provider using the IDR process as well as a certified IDR entity that arbitrates disputes, raising concerns about conflicts of interest.

This research brief provides a short history of the problem of surprise billing and how the No Surprises Act and IDR process came to be. It then synthesizes recent research on private equity’s outsized role in the implementation of the No Surprises Act, and presents new research on the extent of private equity’s investments in certified IDR entities. The evidence is clear – private equity-backed companies are profiting off a reform that was intended to rein in healthcare costs. Policymakers will need to address the flaws in the No Surprises Act, and more specifically the IDR process, if the law is to succeed in protecting patients from the ever-rising costs of healthcare.

Surprise billing as a business model

Surprise medical billing refers to when a patient is hit with an unexpected bill after receiving healthcare services at an in-network facility. This happens because many hospitals and providers contract with third-party physician groups to provide services such as emergency room staffing, radiology, or anesthesiology, which negotiate their own billing rates with insurers. Historically, some of these physician groups remained out-of-network, either in the short term or long term, in order to charge higher rates,[5] although this practice has decreased following increased scrutiny and regulation, including from the No Surprise Act.[6]

Providing emergency care can be very lucrative, as people cannot anticipate or plan for emergencies, and thus cannot research ahead of time if the emergency department where they receive care (and the clinicians there who will take care of them) are in-network. As such, emergency physician staffing groups that contract with healthcare facilities were a desirable target by private equity firms looking to extract money out of the healthcare system. Two companies in particular, TeamHealth (owned by Blackstone) and Envision Healthcare (previously owned by KKR), have used out-of-network billing, or the threat of it, to juice higher payments from patients and payers.[7]

The No Surprises Act

In the summer of 2019, the bipartisan No Surprises Act was introduced in Congress with the goal of protecting consumers from surprise medical bills from out-of-network providers.[10] Very quickly, the original bill was amended with a polarizing arbitration provision supported by many doctors and hospitals but deeply unpopular with the insurance industry.[11]

Around this time, a shadowy group called Doctor Patient Unity was running ads and sending mailers in multiple states, targeting politicians up for re-election and suggesting that government “rate setting” posed a risk to patient care and would benefit insurers.[12]  Later that month, the New York Times reported that private equity-backed companies Envision and TeamHealth were the primary funders behind the dark money group and detailed their extensive campaign. By September, the campaign had already totaled over $28 million in spending.[13]

An ad made by private equity-backed Doctor Patient Unity, advocating for the arbitration process that would become the independent dispute review process.

By April 2020, private equity-backed Doctor Patient Unity had spent at least $57 million on ads.[14] Meanwhile, the insurance industry-backed group, Coalition Against Surprise Medical Billing, also began an ad campaign, arguing that the arbitration provision was a “handout to health providers backed by private equity firms.”[15]

Doctor Patient Unity and other provider-affiliated groups were ultimately successful in winning the arbitration provision (the IDR process) in the final version of the No Surprises Act, which became law in December 2020 and went into effect in January 2022.[16]

Recent research on the high costs of the implementation of the No Surprises Act

Since implementation of the law began, private equity-backed companies have consistently dominated the use of the IDR process. And the large number of claims by private equity-backed companies have a cost. An August 2025 report in Health Affairs found that in the first three years of implementation, the IDR process has resulted in a total estimated $5 billion in additional costs. $228 million have gone to administrative fees, $656 million to IDR entity fees, $1.9 billion to plan and provider internal costs, and $2.24 billion have gone to payment amounts.[17]

The federal agencies establishing the IDR system estimated that 17,333 claims would be submitted as part of the IDR process annually.[18] The agencies also predicted that 25% of disputes would be resolved in negotiation before even entering the IDR process.[19] Analyzing public use files on IDR outcomes, the researchers found that these estimates were far off, noting: “In the nine months after the system opened in 2022, about 190,000 disputes were filed—more than ten times the number expected for the first full year alone.”[20] Air ambulance companies filed twice the number of disputes expected.[21]

The Health Affairs research also found that the IDR process often results in a payment determination beyond the original payment to providers and often those payments are above in-network rates.[22] Many of these cases are brought by providers, who win the vast majority of disputes. In 2024, providers won 85 percent of the line-item claims decided that year, up from 81 percent in 2023.”[23] When providers win, they generally receive fees that are three to four times the typical in-network rate, according to the researchers.[24]

Perhaps most notably, the researchers found that the high volume of provider disputes and associated costs have been driven by private equity-backed groups.[25] Just two private equity-backed provider organizations – Radiology Partners and TeamHealth and their affiliates – filed 43% of resolved line-item claims in IDR processes in 2023 and 2024.[26]

These findings reinforce research from PESP on private equity’s participation in the IDR process that was published in 2023 and 2024. In early 2023, PESP reported that initial public data from the IDR process revealed private equity-backed companies to be among the top initiating parties in the disputes. In the program’s first six months, four PE-owned companies accounted for 41% of all 86,807 disputes. Two additional PE-owned companies accounted for more than half of all air ambulance disputes.[27]PESP also found that for IDR data covering the first half of 2023, the highest numbers of disputes were separately initiated by four companies, all of which were owned by private equity firms. Together they initiated 191,785 disputes, representing 70% of the 274,432 total claims (excluding air ambulances) filed in the first half of 2023. From this same time period, private equity-owned companies initiated 67% of the total 14,378 air ambulance billing disputes.[28]

The growth of third-party organizations in the IDR process to file and track disputes is also notable. HaloMD is one example of a middleman organization specializing in IDR disputes on behalf of providers.[29] Researchers found that HaloMD was responsible for 1% of line-item claims in 2023, but by 2024, it accounted for 6% of line-item claims, making it the fourth most active participant.[30] While HaloMD is not itself backed by private equity,[31] its involvement in the IDR process may obscure the extent of participation by private equity-backed companies which may contract with the company.

Private equity investments in certified IDR entities

Private equity is also involved in the dispute process from the arbitrator side. Private equity firms back at least five of the 15 certified IDR entities as of October 2025.[32] These are entities that contract with CMS to adjudicate disputes. The private equity-backed IDR entities include:

A investigation into the most active provider organizations involved in IDR cases in 2023 and 2024[43] indicates that Sedgwick Claims Management Services shares investors with two providers with large shares of IDR cases: TeamHealth and SCP Health. Both Sedgwick Claims Management Services count Caisse de dépôt et placement du Québec (CDPQ) as a minority investor.[44] Sedgwick and SCP Health share Onex as a backer.[45] The fact that at least two private equity firms have investments in both providers using the IDR process and certified entities arbitrating disputes raises concerns about conflicts of interest. However, the publicly available files from CMS do not provide information on which IDR entity arbitrated each case, so without further information it is difficult to know if there is a conflict of interest. Comparing the private equity backers of certified IDR entities with the backers of providers with disputes warrants further research.

The Coalition Against Surprise Medical Billing has also indicated concern about the possibility of conflicts of interest. Most recently, the group raised opposition to the petition by Bain Capital-backed Guidehouse, Inc. to become a certified independent dispute resolution entity in an August 8, 2025 letter to the Department of Health and Human Services, the Department of Labor, the Department of the Treasury, and the Center for Consumer Information & Insurance Oversight. [46]

In another Health Affairs study published in 2025, researchers found that outcomes vary across IDR entities.[47] Four entities favored providers in more than 90% of the cases they resolved in the first half of 2024, whereas a different entity favored providers in only one third of the cases before it.[48] The researchers state that, “Given that IDR entities determine case eligibility and are only paid for eligible cases, some stakeholders suggest that IDR entities are incentivized to determine ineligible cases as eligible.”[49] Due to the wide differences in outcomes among different IDR entities and the possibility of conflicts of interest, additional guardrails on the process may be necessary to protect consumers.

The need for independent dispute resolution reform

Every step of the way, private equity has been a key player in the No Surprises Act, beginning with why it was needed in the first place, then the watering down of the final version of the law, and finally the implementation phase on both the provider side and the arbitration side of the IDR process.

Private equity-backed staffing companies contributed to the surprise billing problem in the US, where patients were hit with out-of-network rates even when they went to facilities that were in network. When Congress worked to pass legislation to protect patients from surprise billing, a private equity-backed dark money group – Doctor Patient Unity – fought to have the IDR process included in the final bill. Since the implementation of the bipartisan No Surprises Act, private equity-backed providers have overwhelmed the IDR process, leading to an estimated $5 billion in costs in the first three years. And private equity-backed companies have profited from the IDR process through their contracts with the federal government to serve as certified IDR entities, arbitrating the disputes between providers and payers and issuing rulings which have disproportionally been in providers’ favor. PESP identified at least two private equity firms that invested in both a provider that has used the IDR process and a certified IDR entity that arbitrates disputes.

In 2022, an editorial published in STAT highlighted how the final version of the No Surprises Act did not go far enough:

“The No Surprises Act did not aim to improve the design of insurance, control costs, or encourage peace treaties between payers and caregivers. Consequently, the financial games continue. Caregivers can still extract high payments, and insurers can employ cost controls that are ineffective but nonetheless generate unpredictably high out-of-pocket cost-sharing for Americans unlucky enough to need care. Lawyers, as always, will be busy. By amputating gangrenous surprise bills, the No Surprises Act helps preserve business as usual — for now.”[50]

Indeed, the authors’ analysis, published in the first year of the law’s implementation, has been borne out. The growing body of evidence available three years into implementation demonstrates that while the No Surprises Act has reduced surprise bills for patients, it has led to ballooning health system costs that will likely be passed on to patients in the form of higher premiums.[51] Private equity-backed companies remain key players in the costly IDR process – as providers that successfully extract high payments from payers through their high volume use of the IDR process and as certified IDR entities that receive fees to arbitrate disputes.

The story of the No Surprises Act highlights multiple ways in which private equity has driven up healthcare costs in the US, as well as how industry lobbying has successfully weakened legislation. Even though the law has reduced out-of-pocket spending for patients, the high costs of IDR will likely end up in higher premium costs for individuals and their employers.[52] In order to truly protect patients against rising healthcare costs, policymakers should reform the IDR process and the No Surprises Act. The Health Affairs researchers suggested several updates that could help protect consumers, including methods for screening out ineligible claims and providing greater transparency and consistency among IDR entities for payments.[53] Greater scrutiny of private equity-backed actors, including providers, IDR entities, and third-party middlemen to eliminate potential conflicts of interest may also be required to protect consumers from rising costs.

Resources

[1] CMS.gov. “No Surprises: Understand Your Rights against Surprise Medical Bills | CMS,” January 3, 2022. https://www.cms.gov/newsroom/fact-sheets/no-surprises-understand-your-rights-against-surprise-medical-bills.

[2] Jack Hoadley and Kennah Watts, “The Substantial Costs Of The No Surprises Act Arbitration Process,” Health Affairs, August 25, 2025, https://doi.org/10.1377/forefront.20250820.13433.

[3] Hoadley and Watts, “The Substantial Costs Of The No Surprises Act Arbitration Process.”

[4] “Overview of Rules & Fact Sheets | CMS.” Accessed January 9, 2023. https://www.cms.gov/nosurprises/policies-and-resources/overview-of-rules-fact-sheets.

[5] Pg. 10; Pg. 22; Cooper, Zack, Fiona Scott Morton, and Nathan Shekita. “Surprise! Out-of-Network Billing for Emergency Care in the United States.” Cambridge, MA: National Bureau of Economic Research, July 2017. https://doi.org/10.3386/w23623.

[6] Creswell, Julie, Reed Abelson, and Margot Sanger-Katz. “The Company Behind Many Surprise Emergency Room Bills.” The New York Times, July 24, 2017, sec. The Upshot. https://www.nytimes.com/2017/07/24/upshot/the-company-behind-many-surprise-emergency-room-bills.html; Butt, Rachel, and Paula Seligson. “Envision Healthcare Losses Deepen on Wage Pressures, Contract Fight.” Bloomberg.Com, August 23, 2022. https://www.bloomberg.com/news/articles/2022-08-23/envision-adds-to-losses-amid-wage-pressures-contract-fight.

[7] Bugbee, Mary. “Envision Healthcare: A Private Equity Case Study.” Private Equity Stakeholder Project, December 2022. https://pestakeholder.org/wp-content/uploads/2022/12/Envision_CaseStudy_Final_Dec2022.pdf, and Cooper, Zack, Fiona Scott Morton, and Nathan Shekita. “Surprise! Out-of-Network Billing for Emergency Care in the United States.” Cambridge, MA: National Bureau of Economic Research, July 2017. https://doi.org/10.3386/w23623

[8] Adler, Loren, Conrad Milhaupt, Bich Ly, and Erin Trish. Private Equity-Owned Air Ambulances Receive Higher Payments, Generate Larger and More Frequent Surprise Bills. Brookings, USC-Brookings Schaeffer Initiative for Health Policy, 2021. https://www.brookings.edu/essay/private-equity-owned-air-ambulances-receive-higher-payments/.

[9] Adler, et al.

[10] Pallone, Frank. “H.R.3630 – 116th Congress (2019-2020): No Surprises Act.” Legislation, July 11, 2019. 2019/2020. https://www.congress.gov/bill/116th-congress/house-bill/3630.

[11] Luthi, Susannah. “Providers Notch Wins in House Surprise Billing Legislation.” Modern Healthcare, July 17, 2019, sec. Politics & Policy. https://www.modernhealthcare.com/politics-policy/surprise-billing-ban-amended-help-hospitals-doctors.

[12] Evers-Hillstrom, Karl. “Secretive Front Group Targets Vulnerable Senators with $2.3M Ad Blitz over Surprise Medical Bills Fight.” OpenSecrets News, August 6, 2019. https://www.opensecrets.org/news/2019/08/secretive-front-group-targets-vulnerable-senators-with-2-3-million-ad-blitz-over-surprise-medical-bills-fight/.

[13] Sanger-Katz, Margot, Julie Creswell, and Reed Abelson. “Mystery Solved: Private-Equity-Backed Firms Are Behind Ad Blitz on ‘Surprise Billing.’” The New York Times, September 13, 2019, sec. The Upshot. https://www.nytimes.com/2019/09/13/upshot/surprisebilling-laws-ad-spending-doctor-patient-unity.html.

[14] Isaac Arnsdorf, “Medical Staffing Companies Cut Doctors’ Pay While Spending Millions on Political Ads,” ProPublica, April 20, 2020, https://www.propublica.org/article/medical-staffing-companies-cut-doctors-pay-while-spending-millions-on-political-ads.

[15] Roubein, Rachel. “Health Groups Backed Dark Money Campaign to Sink ‘surprise’ Billing Fix.” POLITICO, September 13, 2019. https://www.politico.com/story/2019/09/13/health-groups-dark-money-hospital-bills-legislation-1495697.

[16] American Medical Association. “Implementation of the No Surprises Act.” Accessed October 26, 2022. https://www.ama-assn.org/delivering-care/patient-support-advocacy/implementation-no-surprises-act.

[17] Hoadley and Watts, “The Substantial Costs Of The No Surprises Act Arbitration Process.”” Health Affairs, August 25, 2025. https://www.healthaffairs.org/content/forefront/substantial-costs-no-surprises-act-arbitration-process.

[18] “Requirements Related to Surprise Billing; Part II,” Federal Register, October 7, 2021, https://www.federalregister.gov/documents/2021/10/07/2021-21441/requirements-related-to-surprise-billing-part-ii.

[19] Federal Register, “Requirements Related to Surprise Billing; Part II.”

[20] Hoadley and Watts, “The Substantial Costs Of The No Surprises Act Arbitration Process.”

[21] Hoadley and Watts, “The Substantial Costs Of The No Surprises Act Arbitration Process.”

[22] Hoadley and Watts, “The Substantial Costs Of The No Surprises Act Arbitration Process.”

[23] Hoadley and Watts, “The Substantial Costs Of The No Surprises Act Arbitration Process.”

[24] Hoadley and Watts, “The Substantial Costs Of The No Surprises Act Arbitration Process.”

[25] Hoadley and Watts, “The Substantial Costs Of The No Surprises Act Arbitration Process.”

[26] Hoadley and Watts, “The Substantial Costs Of The No Surprises Act Arbitration Process.”

[27] Bugbee, Mary. “No Surprises Here: PE Takes Center Stage in the No Surprises IDR Process.” Private Equity Stakeholder Project PESP, January 11, 2023. https://pestakeholder.org/news/no-surprises-here-pe-at-center-of-surprise-billing-controversy/.

[28] Fenne, Michael. “Private Equity Firms Overwhelm Federal Dispute Process.” Private Equity Stakeholder Project PESP, February 28, 2024. https://pestakeholder.org/news/private-equity-firms-overwhelm-federal-dispute-process/.

[29] “HaloMD – Home,” HaloMD, accessed October 18, 2025, https://halomd.com/.

[30] Hoadley and Watts, “The Substantial Costs Of The No Surprises Act Arbitration Process.”

[31] “PitchBook Profile – HaloMD,” accessed October 10, 2025, https://my.pitchbook.com/profile/655748-92/company/profile.

[32] “List of Certified Organizations | CMS,” accessed October 14, 2025, https://www.cms.gov/nosurprises/help-resolve-payment-disputes/certified-idre-list.

[33] “About Us – Acentra Health,” accessed October 15, 2025, https://acentra.com/about-us.

[34] “Acentra Health BFCC-QIO,” accessed October 15, 2025, https://www.acentraqio.com/acentrahealth/.

[35] “Acentra Health | Carlyle,” accessed October 15, 2025, https://www.carlyle.com/our-business/portfolio-of-investments/acentra-health.

[36] “Livanta BFCC-QIO,” accessed October 15, 2025, https://www.livantaqio.cms.gov/en.

[37] “Deals – Commence. – Company Profile,” accessed October 15, 2025, https://my.pitchbook.com/profile/375377-14/company/deals#deal-244211-50T.

[38] “Deals – MCMC – Company Profile,” accessed October 15, 2025, https://my.pitchbook.com/profile/11968-48/company/deals#deal-47958-67T.

[39] Iris Dorbian, “Sedgwick Buys York Risk Services Group,” Content, PE Hub, September 4, 2019, https://www.pehub.com/sedgwick-buys-york-risk-services-group/.

[40]Sedgwick Announces Closing of $1B Equity Investment from Altas Partners | Sedgwick. Press Release. November 12, 2024. https://www.sedgwick.com/press-release/sedgwick-announces-investments-from-altas-partners-carlyle-and-stone-point/.

[41] “Investments” view on “ExamWorks – Company Profile.” Accessed October 24, 2025. https://my.pitchbook.com/profile/50847-67/company/profile#investments.

[42] “Post | LinkedIn.” Accessed October 24, 2025. https://www.linkedin.com/posts/alexmginsberg_i-am-incredibly-proud-to-share-that-on-february-activity-7315376222966861824-ZLZB/.

[43] Hoadley, Jack, Kennah Watts, and Zachary Baron. “2023 Data From The Independent Dispute Resolution Process: Select Providers Win Big.” Health Affairs, August 19, 2024. https://doi.org/10.1377/forefront.20240815.699234; Hoadley, Jack, Kennah Watts, and Zachary Baron. “Independent Dispute Resolution Process 2024 Data: High Volume, More Provider Wins.” Health Affairs, ahead of print, June 11, 2025. https://doi.org/10.1377/forefront.20250609.318536.

[44]Sedgwick Strengthens Strategic Position in Quebec With Claims Solutions | Sedgwick, Press Release, September 22, 2025, https://www.sedgwick.com/press-release/sedgwick-strengthens-strategic-position-in-quebec-withclaims-solutions/.; “Completes Previously Announced Transaction with Blackstone,” TeamHealth, n.d., accessed October 18, 2025, https://www.teamhealth.com/news-and-resources/press-release/blackstone/.; PitchBook. “Team Health Holdings – Company Profile.” Accessed October 31, 2025. https://my.pitchbook.com/profile/10295-11/company/profile#investors.

[45]Sedgwick Announces Closing of $1B Equity Investment from Altas Partners | Sedgwick, Press Release, November 12, 2024, https://www.sedgwick.com/press-release/sedgwick-announces-investments-from-altas-partners-carlyle-and-stone-point/.; “SCP Health,” accessed October 18, 2025, https://www.onex.com/portfolio/OP-OpCo-SCPHealth.

[46] Coalition Against Surprise Medical Billing, “Coalition Against Surprise Medical Billing Opposes Guidehouse’s Petition to Become a Certified Independent Dispute Resolution Entity,” August 8, 2025, https://stopsurprisebillingnow.com/wp-content/uploads/2025/08/CASMB-Letter-Opposing-Guidehouse-IDRE-Petition.pdf.

[47] Kennah Watts and Jack Hoadley, No Surprises Act Arbitrators Vary Significantly In Their Decision Making Patterns, n.d., https://doi.org/10.1377/forefront.20250623.200571.

[48] Watts and Hoadley, No Surprises Act Arbitrators Vary Significantly In Their Decision Making Patterns.

[49] Watts and Hoadley, No Surprises Act Arbitrators Vary Significantly In Their Decision Making Patterns.

[50] Rowin and Marc Rodwin Sager Alan, “The No Surprises Act: A Band-Aid Protecting Business as Usual,” STAT, August 31, 2022, https://www.statnews.com/2022/08/31/the-no-surprises-act-a-band-aid-protecting-business-as-usual/.

[51] Hoadley and Watts, “The Substantial Costs Of The No Surprises Act Arbitration Process.”

[52] Hoadley and Watts, “The Substantial Costs Of The No Surprises Act Arbitration Process.”

[53] Hoadley and Watts, “The Substantial Costs Of The No Surprises Act Arbitration Process.”