Healthcare Groups Push Trump to Streamline Payer-Provider Dispute Resolution

A coalition of 48 employer and consumer organizations delivered a formal letter to the Trump administration on May 18, 2026, documenting what may be the most consequential structural failure in U.S. healthcare payment policy since the Affordable Care Act: the independent dispute resolution process under the No Surprises Act has mutated from a patient protection mechanism into a high-volume arbitration extraction engine, driven in large part by private equity-backed providers capturing 55% of all disputes through just four companies.

The numbers dismantle any claim that the IDR system is functioning as designed. Federal projections at the time the No Surprises Act was implemented estimated the process would handle roughly 17,000 arbitration cases per year . In the first half of 2025 alone, the system processed over 1.2 million cases, a volume that renders the original model unrecognizable . The four companies responsible for more than half of first-half 2025 disputes were Team Health, Radiology Partners, SCP Health, and HaloMD. Team Health, Radiology Partners, and SCP Health are private equity-backed . Providers win approximately 88% of IDR cases, with resulting payments running at 300% to 900% of the median in-network rate .

The letter was submitted to the Departments of Treasury, Health and Human Services, and Labor. Signatories included the American Benefits Council, Families USA, the National Alliance of Healthcare Purchaser Coalitions, the Purchaser Business Group on Health, and the ERISA Industry Committee . "This is not organic dispute resolution," the organizations wrote. "It is a coordinated, high-volume strategy being systematically exploited by a small number of bad actors at the direct expense of American employers, workers, and families." The letter further stated: "These are many of the same firms that spent years deliberately remaining out-of-network to exploit patients and then pivoted to IDR when the No Surprises Act ended direct patient billing. Now, they are operationalizing arbitration at industrial scale."

The stakes extend far beyond a regulatory procedural dispute. The costs extracted through IDR arbitration flow directly into premium increases, higher deductibles, and expanded out-of-pocket expenses for the roughly 23 million Americans enrolled in ACA marketplace plans . Those enrollees are already under acute financial pressure: average ACA plan deductibles grew 37%, rising from $2,759 in 2025 to $3,786 in 2026, the steepest single-year increase on record, according to a KFF analysis released May 19, 2026 . Average premiums rose 26% this year . The IDR arbitrage loop accelerates exactly the cost spiral that is now eroding ACA enrollment, with sign-ups down approximately 1.2 million from last year's record level .

The Arithmetic of Arbitrage: 300%-900% Overpayments Are Not Rounding Errors

The IDR payment premium disclosed in the coalition letter is not a marginal wedge. At 300% to 900% above median in-network rates, every dollar a PE-backed provider extracts through arbitration represents two to eight dollars of excess cost relative to the contracted benchmark . That excess is not absorbed by the insurer's balance sheet in isolation. It recirculates into the premium and cost-sharing structure that enrollees, employers, and ultimately taxpayers fund.

The volume mechanics compound the problem. At 1.2 million cases in six months, even a modest average payment differential produces aggregate dollar outcomes that dwarf the system's original scope. Terms on individual case awards were not disclosed in the coalition letter, so precise aggregate extraction figures cannot be calculated from available source data. What can be stated precisely: a system designed for 17,000 cases annually is processing cases at a rate approximately 141 times that projection . The structural incentive driving that volume is explicit. The coalition letter notes that IDR arbitrators are compensated on a per-case basis, creating financial incentives to prioritize throughput over impartiality .

The coalition also flagged a potential conflict-of-interest structure that adds another layer of concern for institutional investors evaluating healthcare services exposure: some private equity firms reportedly hold investments in both the provider entities filing IDR claims and the IDR entities adjudicating those claims . The coalition letter calls for the Trump administration to investigate the independence of certified IDR entities and require full disclosure of ownership structures and compensation arrangements .

ACA Enrollment Collapse Closes the Cost Loop

The IDR arbitrage story and the ACA enrollment deterioration are not parallel narratives. They are the same story.

KFF Health News reported May 19, 2026 that Georgia saw a 28% drop in premium-paying enrollees in April compared with the same period a year earlier, based on an analysis by healthcare policy analyst Charles Gaba . An internal Centers for Medicare and Medicaid Services dataset reported by the news website NOTUS on May 12, 2026 indicated that roughly 21% of people using the federal ACA marketplace, covering 30 states, failed to pay their January premiums, a figure described as substantially higher than the comparable prior-year period . CMS declined to respond to questions from KFF Health News about the enrollment data .

Ellen Montz, a managing director with Manatt Health who oversaw ACA implementation during the Biden administration, stated: "We can't yet quantify how much worse it will be than in previous years, but it will absolutely be worse because of the sticker shock" .

For insurers, the enrollment deterioration is a classic adverse selection scenario. Healthy enrollees exit first when premiums rise. Sicker, higher-cost enrollees remain. The risk pool degrades. Rates rise again. Insurers are described as likely to raise rates further in 2027, following this year's already elevated hikes . That cycle creates persistent margin pressure for the commercial insurance businesses of UnitedHealth Group, CVS Health's Aetna, and Elevance Health, all of which carry significant ACA marketplace exposure.

PE Platform Strategy: Regulatory Arbitrage as a Business Model

The three PE-backed companies named in the coalition letter, Team Health, Radiology Partners, and SCP Health, represent a specific and well-documented private equity platform strategy in healthcare services: aggregate out-of-network physician groups at scale, maximize billing leverage, and monetize the spread between negotiated network rates and out-of-network collections.

The No Surprises Act, enacted in 2020 and effective from January 2022, was designed to end the patient-facing component of that strategy by removing patients from the billing dispute entirely. The coalition letter argues that the same PE-backed platforms adapted by redirecting volume from direct patient balance billing to IDR arbitration, with the same economic objective pursued through a different mechanism .

The letter describes this as a deliberate operational pivot rather than incidental use of a legal process: "They are operationalizing arbitration at industrial scale" . The word "operationalizing" is precise. It describes a workflow built around arbitration volume, not a sporadic dispute resolution backstop.

For PE limited partners with exposure to these platforms, the regulatory risk is now explicit and named at the federal level. The coalition's recommendations include decertification of conflicted IDR entities and upfront eligibility screening to filter ineligible claims before they enter the portal . If implemented, those reforms directly compress the revenue model that drives valuations for out-of-network physician staffing platforms.

GHO-CBC Merger Signals PE's Continued Healthcare Commitment, Complicating the Regulatory Picture

Against this regulatory backdrop, the announced merger of European healthcare investor GHO Capital and asset management firm CBC Group, forming an entity projected to manage over $21 billion, signals that institutional capital is not retreating from healthcare services . Terms of the merger were not disclosed in available reporting. The combined entity would represent what Endpoints News described as potentially the largest healthcare specialist investor in existence .

The juxtaposition matters. Capital formation in healthcare private equity is accelerating even as the regulatory environment for one of PE's most profitable healthcare strategies, out-of-network arbitrage, faces the most organized pushback in the No Surprises Act's history. That creates a bifurcated opportunity set: platforms built on IDR extraction face regulatory compression, while diversified healthcare investors with exposure to drug development, medical technology, and international markets may benefit from continued capital concentration.

Investment Positioning: Follow the Regulatory Money

For institutional investors, the coalition letter is a formal early-warning signal with three actionable dimensions.

First, out-of-network physician staffing platforms, particularly those backed by PE with significant IDR revenue dependency, carry elevated regulatory risk. The specific naming of Team Health, Radiology Partners, and SCP Health in a letter addressed to three federal departments raises the probability of targeted enforcement action. Investors in these platforms or their debt should price in scenario analysis around IDR reform.

Second, commercial health insurers face a structural premium adequacy problem if IDR payment rates remain at 300% to 900% of in-network benchmarks. The cost ultimately exits through premium increases that are now visibly eroding the ACA risk pool. Margin pressure for Aetna, Elevance, and others is compounded by adverse selection as enrollment quality deteriorates.

Third, the GHO-CBC merger signals that diversified, geographically distributed healthcare PE remains a destination for institutional capital . Platforms with limited U.S. out-of-network exposure and stronger positioning in drug development services, medtech, or non-acute care settings carry lower regulatory tail risk in this environment.

The Plocamium View

The market is pricing this as a regulatory compliance story. It is not. It is a valuation story.

The IDR arbitrage model embedded in Team Health, Radiology Partners, and SCP Health is not a fringe revenue line. For PE-backed out-of-network physician staffing platforms, the spread between in-network rates and IDR awards, running at 300% to 900% of the in-network median, is core to the earnings model that justified the acquisition multiples paid for these assets. If the Trump administration implements even a subset of the coalition's recommended reforms, specifically upfront eligibility screening and IDR entity decertification, the volume compression alone would materially impair EBITDA for platforms that have operationalized arbitration at scale.

The second-order effect is on PE sponsor carry and LP returns. These platforms are held in funds that are approaching or past typical hold periods. A regulatory crackdown that compresses IDR revenue ahead of exit events forces a choice between accepting a lower exit multiple, extending hold periods, or accelerating exits at distressed valuations. None of those outcomes are priced into current healthcare services fund NAV marks, in our assessment.

The parallel to prior PE healthcare regulatory cycles is instructive. The 2012 enforcement surge against hospital-based physician groups for balance billing practices forced rapid consolidation and model pivots, but not before significant LP value erosion in affected portfolios. The current situation differs in one important respect: the named companies are already identified, the letter is in the public record, and the federal departments receiving it have explicit authority to act without new legislation.

The GHO-CBC combination to manage over $21 billion in healthcare-focused capital represents the other side of this trade . Sophisticated healthcare PE is not exiting the sector. It is concentrating in segments with durable regulatory positioning. The smart capital flow right now is away from U.S. out-of-network arbitrage dependency and toward diversified global healthcare platforms, drug development infrastructure, and non-acute care models where reimbursement is tied to value-based or capitated structures rather than fee-for-service arbitrage.

The ACA enrollment deterioration connects the two stories directly. As premium non-payment rates rise toward 21% in the federal marketplace and deductibles climb to an average of $3,786 , the political pressure on the Trump administration to demonstrate healthcare cost control intensifies. IDR reform is one of the few levers the administration can pull through executive and regulatory action, without congressional action, that produces a visible consumer benefit. The probability of action is higher than the current market implies.

The Bottom Line

Forty-eight organizations have put Team Health, Radiology Partners, SCP Health, and HaloMD on record as the primary actors in a system that processed 1.2 million arbitration cases in six months against a projected annual capacity of 17,000. Three of those four are PE-backed. The data trail from IDR overpayments to premium increases to ACA enrollment collapse is now documented and cited to federal departments with the authority to act. Institutional capital with exposure to out-of-network physician staffing platforms should model IDR reform scenarios into exit timelines and valuation assumptions before regulators do it for them.