TL;DR: A story about a 28,000-life going 16% over its healthcare budget because a free-standing ED chain in the region leveraged the No Surprises Act. It’s a story that highlights the practical implications of the rapid growth of the Independent Resolution process.
Summary:
San Antonio Express News highlighted how San Antonio’s 28,000-person health plan for city employees is running $40 million over its $250 million annual budget in 2026, due to employees using a freestanding ED operator, Prestige Emergency Rooms, which is heavily leveraging the IDR process. A city health plan memo in May encouraged employees to use hospital-based EDs due to the costs associated with Prestige, which accounted for 53% of the plan's ED volume, despite Prestige having only 4 EDs in the market out of 50. At that time in May, the city was $20 million over budget.
More Details:
The city of San Antonio’s health plan covers 12,000 employees and 16,000 dependents, roughly 28,000 lives
There are 50 freestanding and hospital EDs in San Antonio, but Prestige Emergency Rooms, which has four locations in San Antonio, accounted for 53% of emergency department claims for city employees
The article reports that part of what makes Prestige so popular with employees is that it waives out-of-pocket costs and deductibles (according to city employees), which makes it more attractive compared to other EDs. Prestige denies this.
Police officers started going to Prestige during COVID-19 because of quick access to vaccines
Prestige noted it started submitting claims via the IDR process in August 2025 because of low payments from Blue Cross Blue Shield, the TPA for the San Antonio city health plan. The parties are currently in negotiations for Prestige to go in-network with BCBS
Prestige is winning 99.6% of claims it is submitting via the IDR process, and it has apparently more than doubled what San Antonio city employees are paying, going from $886 to $1,846
Prestige claims its rates are average for Bexar County, and that it is simply making up for the low rates BCBS had previously charged
San Antonio employees will face premium increases, starting at an increase of $6 per month for employees on the cheapest plan.
A quote from the article
When asked about concerns that providers are gaming the IDR process, here was Prestige Emergency Room’s response:
“I will say the vast majority of providers do not do that, but there are some that are doing it,” Wright said. “We want to put an end to that kind of stuff because it’s just not good for the system. It’s not good for patients. It’s not good for anybody.”
The HTN Perspective
While providers and payors argue in DC and in courts over both the legality and legitimacy of IDR outcomes under the No Surprises Act, this story provides a clear example of the downstream implications of the IDR process.
Here at HTN, we spend a lot of time talking about the Iron Triangle, the idea that there are inherent trade-offs among cost, access, and quality. You can see those trade-offs at play in this story – a free-standing ED pops up in San Antonio, creating new access at reasonable quality in the market, as evidenced by the fact that people are going there. The article notes that 53% of San Antonio city employees' ED claims were at Prestige in 2025, despite the fact that Prestige has only four EDs in the market, out of a reported 50. It is not surprising, then, that the access provided here is coming at an increased cost to the city of San Antonio health plan, as Prestige notes the NSA is now enabling it to be paid in line with what it deserves. Presumably, other employers in the San Antonio market would be experiencing this dynamic as well.
It seems indicative of the challenging nature of the NSA conversation today, and the tension between providers and payors in these conversations:
If you’re the payor, the NSA represents a bad outcome — here, you have a provider gaming a system to double what they are paid, resulting in the plan going 16% over budget and premiums increasing for employees moving forward. It’s worth noting here that this isn’t actually BCBS that’s facing the issue here; it is the self-insured employer.
If you’re the provider, the NSA represents an outcome that makes providers closer to whole. The perception is that health plans have been underpaying provider groups, as evidenced by Prestige winning 99.6% of the NSA cases it submits, bringing it up to the county average.
Prestige notes that some providers are gaming the IDR process, but it does not feel that it is doing so. It is simply using the IDR process to be paid what it deserves, after BCBS has underpaid it historically. Yet the article raises the notion of gaming when it notes that city health plan employees are apparently going to Prestige en masse in part because Prestige is waiving any co-pays or deductibles, which Prestige denies. In so many ways, this gets to the crux of the challenge — what is the appropriate amount for a provider to be paid for their services, particularly when there is no agreement between a payor and a provider on said amount?
Regardless of where one lands on the legitimacy of this IDR process and the games that may or may not be occurring here, the end result seems pretty clear — providers are leveraging it to get paid more, and that is driving up healthcare costs. National headlines have already highlighted how the IDR process awarded $15 billion in claims in 2025. For a plan like the city of San Antonio, that is causing a 16% increase in healthcare spending over budget, which will be passed through to employees in the form of higher premiums. And keep in mind that while the IDR process numbers for 2025 were high, those numbers were before groups like Prestige began leveraging the process. This issue seems to be growing in real time.
Right now, that premium increase is small, starting at $6 per month. But if you play out the rationale behind the provider-side of the argument to its end, what happens? The provider's argument is essentially that they’re being underpaid by plans, so this increase is justified because it’s what they're due. In San Antonio, this is just one ED operator driving this 16% cost increase. If I’m managing any of the other EDs in town, looking at the fact that a four clinic chain is taking 53% of volume in the market, what am I going to do? Act more like that four clinic chain! It’s a strategy that we’ve seen other organizations, like Nutex Health in the public markets, pursue, staying out-of-network with the local Blues plan and leveraging the NSA to be paid a higher rate.
It serves as yet another reminder that the NSA has effectively solved one problem in eliminating surprise medical bills, but is now feeding directly into a broader affordability problem. And given the reaction thus far in the courts and DC to the NSA IDR process outcomes, it seems reasonable to expect more providers to enter this process. It all feels like we’re in the very early innings of this IDR conversation, and unless we adjust the process, we’re going to see more and more stories like this pop up.
