Since the bipartisan No Surprises Act (NSA) went into effect on January 1, 2022, there has been a flood of lawsuits by providers over insurance underpayments. NSA bans surprise out-of-network bills for patients, including by out-of-network providers working at in-network hospitals. It also caps patient costs to standard in-network cost-sharing amounts (copay, coinsurance, and deductibles). And NSA shifts responsibility over disputes from patients to a negotiation between insurance and medical providers working through independent arbitrators. The element cluttering the courts now (with hundreds of thousands of cases filed by providers against insurers) is that NSA does not include a “private right of action” that would allow doctors to sue insurers in federal court over skipped payments. Without this wording, federal courts have been dismissing an avalanche of filed direct federal enforcement suits.
Without this right, insurers have been taking defensive actions such as not paying the fair amount even after the federal Independent Dispute Resolution (IDR) votes against them. Instead of pursuing a losing strategy, providers such as Dr. Jonathan Nissanoff have been finding loopholes such as California’s quantum meruit and Unfair Competition Law (UCL).
Nissanoff v. Blue Shield of California (2026) began when Dr. Nissanoff performed an emergency orthopedic service to a Blue Shield enrollee. After submitting this case to the insurer, Nissanoff determined Blue Shield’s initial payment was “substantially below the reasonable and customary value” for such procedures. Dr. Nissanoff filed an IDR complaint under NSA and it determined on September 17, 2024 in favor of Dr. Nissanoff, ordering Blue Shield to pay an adjustment amount of $56,623.40 for the services. Blue Shield refused to pay this full sum, so this case moved forward in a state court to force Blue Shield to cover to award. Only the equitable and California UCL pars of the lawsuit survived, while the claims under NSA (impossible to enforce decisions of IDR), Knox-Keene Act (does not apply to private parties), common law contracts and ERISA (failure to plead administrative exhaustion) were dismissed.
Doctors never have time to check insurance before an emergency procedure, so testing the law in this case is relevant for many similar cases. And Dr. Nissanoff’s claim specifies that this is not an isolated case, but rather that in his experience Blue Shield has demonstrated a pattern of “lowballing initial payments, forcing IDR, and refusing to honor the results.” It is absurd that the current law forces an arbitration process, but lacks a firm recourse for the winners of this process to enforce what the process decides. Insurers are succeeding in avoiding following a bipartisan decision for them to bill fairly by unfairly refusing to grant sums judged to be fair. An Act of Congress can made the decisions of IDR legally enforceable with an amendment to NSA by adding wording specifically granting a private right of action or a streamlined confirmation process. Though according to the Center on Health Insurance Reforms, there have been 2.6 million IDR disputes filed by providers in 2025 alone (77% increase). Providers win in around 90% of cases. If all of these wins are enforceable, insurers might have to drastically raise their rates. Are doctors really asking for the fair rate, or are they asking for as much as possible? Since America’s medical industry is already costing Americans more than twice the second-highest paying country (Switzerland), if these costs climb still higher because of a law that tips the scale in favor of doctors pressuring for maximum payouts, the public might end up losing. The rational solution to keeping costs low is for arbitrators to enforce a qualifying payment amount (QPA) or a median per-procedure in each geographic region to keep costs steady. But following these median rates has been prevented by litigations against this barrier.
