TL;DR: A local San Antonio employer highlights the practical implications of the rapid growth in the No Surprises Act IDR process
The story:
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 that is heavily leveraging the IDR process. A memo in May encouraged employees to use hospital-based EDs instead of the freestanding operator. At that time in May, the city was $20 million over budget.
The details:
San Antonio’s health plan covers 12,000 employees and 16,000 dependents.
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 claims for city employees
Apparently, part of what makes Prestige so popular with employees is that it waives out-of-pocket costs and deductibles, which makes it more attractive. 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
“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.”
—One of Prestige’s co-owners, when asked about concerns that providers are gaming the NSA IDR process
Our Perspective
While providers and payors argue in DC and in courts over the legality and legitimacy of IDR outcomes under the No Surprises Act, this provides a clear example of the downstream implications of the IDR process.
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 here – a free-standing ED pops up in San Antonio, creating new access and 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. The tradeoff inherent in this, not surprisingly, is that city employees are paying more for healthcare and will face premium increases as a result.
You can see the multiple sides of this argument playing out in real time in San Antonio. Prestige clearly feels like the NSA is helping them get paid what they feel like they deserve. That amount is roughly double what BCBS is suggesting paying them. There is the implication of games being played on each side. The net result is unambiguously that costs are increasing 16% for the city of San Antonio, and employees are facing premium increases as a result. The employer is now trying to help steer employees to hospital-based EDs by making them aware of this. The flow here is entirely predictable at this point.
It’s another reminder that the NSA has effectively solved one problem, surprise medical bills, but is now feeding a broader affordability problem. If I’m running a freestanding ED, I’m looking at these outcomes and adopting a similar strategy. It 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.
