Final Rule on Independent Dispute Resolution Operations

Background on IDR implementation

Most plans became subject to the No Surprises Act in 2022. The No Surprises Act prevents providers from balance billing patients who receive emergency services in the emergency department of a hospital, at an independent freestanding emergency department and from air ambulances. The law also protects patients who receive certain non-emergency services from an out-of-network provider at an in-network facility. (See our insight, “New Law Requires Transparency and Prohibits Surprise Billing” and “The No Surprises Act Requires Changes to Your Plan Coverage.”)

The law established the federal IDR process, allowing for the negotiation for payment of out-of-network claims between payers and providers. In 2021, the Departments issued two interim final regulations in 2021, which included regulations regarding the qualifying payment amount (QPA) as well as initial regulations regarding the IDR process. (See our webinar recording, “The No Surprises Act Independent Dispute Resolution Process” and our insights, “Guidance on the No Surprises Act’s Qualifying Payment Amount” and “No Surprises Act Rule on 2022 Independent Dispute Resolution.”)

In 2023, the Departments issued two proposed rules on IDR operations generally, one regarding fees and one regarding operations.

Since its implementation in 2022, the IDR process has faced legal and implementation challenges including litigation related to the qualifying payment amount (QPA) calculation, a higher volume of claims submitted for IDR than was anticipated by regulators, as well as functional difficulties related to the administration of the IDR process through the federal portal. In response to the QPA litigation, the Departments issued enforcement discretion which was originally provided in FAQs Part 62 and extended through FAQs Part 67, 69, 71 and most recently set 73 published in April 2026. (See our insight, “Continue No Surprises Act Compliance Despite Court Decision.”)

The final rule does not address the QPA calculation or enforcement approach. Further, as implementation has progressed, new challenges have surfaced, including potential provider abuse of the IDR process in some circumstances. The final rule does not address policy issues related to those challenges.

The final rule on IDR includes procedural changes

The final rule focuses on operational improvements and specifically finalizes rules related to claims adjudication communications, open negotiations, batching, eligibility determinations, administrative fees and other procedural requirements. The guidance, which was published in the June 4, 2026 Federal Register, is aimed at standardizing the IDR process in a manner intended to reduce delays and costs and increase efficiency, including lowering the number of ineligible claims entering the system and facilitating the proper handling of claims by the responsible entity. The following changes are applicable August 3, 2026, unless otherwise noted.

Changes related to payer communications and IDR registration

The Departments are working to create standardization early in the claims process. Specifically, under the rule, payers must use specific claim adjustment reason codes (CARCs) and remittance advice remark codes (RARCs) when they provide any paper or electronic remittance advice to an entity that does not have a contractual relationship with the payer. The Departments indicate that they will establish an applicability date for the use of CARCs or RARCs through guidance posted on the DOL websites by December 4, 2026. It is anticipated that such guidance will provide regulated entities no less than four months to come into compliance.

The final rule addresses certain disclosures that must be shared with respect to the qualified payment amount (QPA) if the recognized amount for an item or service is the QPA. Plans and insurers must make certain disclosures about the QPA with each initial payment or notice of denial of payment and must also provide certain additional information upon request. These provisions will apply to disclosures required to be provided on or after August 3, 2026.

Further, any payer subject to the No Surprises Act must now register with the Departments and will receive a registration number, which must be be included with an initial payment or notice of denial of payment, as well as in subsequent notices. Registration-related requirements will be applicable 90 business days after the Departments issue guidance announcing that the functionality supporting the registry provisions has become available.

Generally, along with the registration ID, the rule aims to improve inclusion of identifying information that will support the claims process and clarifies content requirements related to open negotiation notices, notices of open negotiation response, notices of IDR initiation and notices of IDR initiation response. Among other requirements, where applicable, plans and insurers must ensure the inclusion of the legal business name of the self-insured group health plan or insurer relevant to the claim.

Changes to the open negotiation process

The Departments have introduced changes to establish a process for tracking open negotiation through the federal IDR portal in anticipation of initiation of a federal IDR process dispute and to promote transparency and meaningful engagement in the negotiations process.

As discussed above, under the final rule, payers must include a statement explaining that providers must notify the Departments to initiate open negotiation. A party must send an open negotiation notice to the other party and the Department through the federal IDR portal to initiate open negotiations. The Departments clarified that the 30-business-day open negotiation period begins on the day on which the party first submits the open negotiation notice, including the remittance advice.

In addition, a party to an open negotiation notice must now send an open negotiations response within 15 business days of receiving a complete notice. The final rule includes specific content requirements for the open negotiation notice, which should help better identify the entities involved. Pursuant to the final rule, open negotiations will run through the federal IDR portal and proprietary portals will not be used for the negotiation process. The provisions regarding the open negotiation notice, open negotiation response notice, notice of IDR initiation, and notice of IDR initiation response are applicable 90 days after the effective date or November 1, 2026.

Eligibility and batching

The Departments are continuing to improve the IDR eligibility determination process. Under the final rule, certified IDR entities have five business days to make an eligibility determination.

When a certified IDR entity encounters an eligibility determination issue that requires additional data, it must notify both parties and the Departments within five days of receiving the assignment. In turn, each party must submit the requested proof within five days. If a party fails to provide the information within the time frame, the certified IDR entity will either decide the matter using only the existing information or dismiss the matter entirely, if necessary.

The rule aims to facilitate processing efficiency and discusses rules related to batching IDR claims. Under the rule, parties may batch up to 50 related services in a single IDR claim, provided the services all meet certain requirements. Batching is permitted to encourage efficiency and minimize cost and permitted in specific circumstances detailed in the regulation. The changes to the batching rules are applicable November 1, 2026.

Fees and extensions

The cost of the IDR administration fee is reduced from $115 to $15 per party, per dispute. This fee change is effective for disputes initiated on or after June 11, 2026. The Departments codified existing guidance that if either party fails to pay the administrative fee or the IDR entity fee by the time the party’s offer is due, that party’s offer will not be considered received. The Departments plan to limit extensions in the IDR process to cases where “systematic delays in processing disputes” cause the delay.

Implications for sponsors of group health plans

Sponsors of plans that directly administer their IDR process will need to ensure they comply with the new process requirements as of the various applicability dates. Those that rely on a third-party administrator (TPA) will want to monitor the TPA for compliance. These changes are likely to have an impact on the numbers of disputed claims filed as well as claims settled during open negotiation.

Although these changes will improve the process, the overall challenges group health plans presently face are still an issue. Sponsors of plans that rely on a TPA or insurer should request information regarding IDR claims under their plan to help determine if they are impacted by the unfavorable trends and to seek solutions to improve the plan’s IDR negotiation outcomes.