As a physician and part-time Scottsdale resident, I’ve watched Arizona’s health care costs climb with growing alarm. When I see health insurance premiums for Arizona families jump 29% in a single year, I think about the small-business owner in Tempe weighing whether to keep offering coverage, or the startup founder in Chandler losing a recruit to a company in a lower-cost state.

That’s why I was encouraged to see Arizona legislators take a hard look at a growing problem hiding behind a well-intentioned federal law: doctors and hospitals staying out of network, on purpose, because it pays better.

In 2022, Congress passed the No Surprises Act to stop patients from getting blindsided by massive bills from out-of-network providers they never chose. The law worked on that front. But it created a backdoor problem now hitting Arizona harder than almost any other state.

When an out-of-network doctor and an insurer can’t agree on payment, the dispute goes to a federal arbitration process called Independent Dispute Resolution, or IDR. Each side submits a number, and a third-party picks one. In the first half of 2025, providers won 88% of IDR disputes nationally, with payment amounts routinely exceeding in-network rates by 400%-600%.

This isn’t a niche issue for Arizona, it’s a crisis. Providers in our state filed more than 216,000 IDR disputes in 2023 and 2024, nearly 9% of all disputes nationwide. Arizona ranks second only to Texas in volume, and providers here won nearly 80% of the time. Nationally, IDR has added an estimated $5 billion in costs to the health care system since 2022.

Arizona’s outsized share of that burden isn’t random. A single radiology company accounts for roughly 40% of all Arizona IDR disputes. These aren’t small practices fighting for fair pay. They are sophisticated operations turning arbitration into a revenue strategy.

In 2026, ACA marketplace premiums in Arizona spiked roughly 29% for silver-tier plans. An unsubsidized family of four now pays an average of $2,189 per month, more than many Arizonans pay for their mortgage. Enrollment has plummeted 17% as a result.

A recent Gallup survey found that roughly one-third of Americans have cut back on daily living expenses to afford health care, and nearly half of middle-income households have delayed major life decisions because of health care costs. These aren’t just personal hardships; they’re drags on workforce mobility and economic growth.

For Arizona’s business community, this is an existential pressure point. The state has worked hard to attract companies from higher-cost markets: semiconductor manufacturing, tech firms and financial services. When employer-sponsored family coverage nationally averages nearly $27,000 a year and is rising faster than wages, Arizona can’t afford a broken arbitration system piling additional costs onto its employers.

Arizona’s HB 2211, introduced by Rep. David Livingston, takes a straightforward approach. The bill would establish that any IDR offer exceeding 300% of Medicare rates or the qualified payment amount constitutes a “clearly excessive fee”, exposing providers to disciplinary action up to license revocation. It also holds insurers accountable, requiring them to pay arbitration awards within the 30-day federal timeline. Balanced guardrails on both sides.

Arizona isn’t alone. In Idaho, the state Senate advanced Senate Bill 1319, which would require freestanding emergency rooms to accept in-network market rates. The pattern is clear: legislators are recognizing that a subset of providers has turned a patient protection law into a profit machine.

The fix isn’t complicated. Arbitration decisions should be anchored to prevailing in-network rates. Providers who operate in a community should be expected to contract with the insurers serving that community’s patients. And states like Arizona should set guardrails that prevent a handful of bad actors from inflating costs for everyone.

Arizona’s economy is booming, but health care affordability is becoming a competitive vulnerability. I’m glad Arizona’s legislators recognized the problem. Now it’s time to finish the job, for patients, for employers, and for the long-term health of our state’s economy.

Dr. Richard Popiel is a health care delivery expert and part-time Scottsdale resident.