Employee Benefits
What Plan Sponsors Need to Know About the Federal Independent Dispute Resolution (“IDR”) Operations Final Rules – Five Takeaways
On May 28, 2026, the federal government issued Final Rules and a Fact Sheet that change how payment disputes between health plans and out-of-network providers are handled under the No Surprises Act’s (“NSA”) binding arbitration system. These changes affect how a group health plan communicates with out-of-network providers, participates in payment negotiations, and resolves billing disputes. Because self-insured group health plans are ultimately responsible for ensuring compliance with these new IDR requirements, plan sponsors should work with their third-party administrator (“TPA”) to confirm that existing processes meet the new standards. Where gaps exist, plan sponsors may want to revise the TPA services agreement to address the requirements summarized below and consider including indemnification provisions or performance guarantees to protect the plan in the event the TPA fails to comply.
For more information regarding the NSA see our SW Benefits Update, “Not All Surprises Are Good – Phase I of the Surprise Billing Rules.”
- The Plan Must Register with a New Federal IDR Registry – Starting 90 business days after the new Federal IDR Registry goes live, the group health plan must register with the registry and provide basic information about how the IDR process applies to services covered by the plan. Once registered, the plan will receive an IDR registration number that will be used in future communications.
- New Information Must Be Included in Payment and Denial Notices – Whenever the plan sends an initial payment or a denial notice to an out-of-network provider, in addition to the qualifying payment amount (“QPA”) the notice must now include: (1) the legal business name of the plan; (2) the legal business name of the plan sponsor; and (3) the plan’s IDR registration number. The notice must also tell the provider how to start the open negotiation process. In addition, effective August 3, 2026 and subject to future guidance, the plan must use specific standardized codes, called claim adjustment reason codes (“CARCs”) and remittance advice remark codes (“RARCs”), on all payment communications sent to out-of-network providers. These codes indicate whether a claim is subject to the NSA’s surprise billing protections and the federal IDR process.
- The Open Negotiation Process Has Changed Significantly – Starting 90 business days after the IDR Registry goes live, any party that wants to begin the 30-business-day negotiation period must submit an open negotiation notice, along with the payment or denial notice, to the other party and to the federal government through the Federal IDR portal. The notice must contain new required details to help identify the disputed item or service and confirm that the IDR process applies. The party that receives an open negotiation notice must also file a new open negotiation response notice with the other party and the government by the 15th business day of the 30-business-day negotiation period.
- New Rules for Batching Disputes and Tighter Deadlines – Starting November 1, 2026, the rules change how claims can be grouped (or “batched”) into a single IDR dispute. Going forward, no more than 50 individual items or services (“line items”) may be included in a single batched dispute. The IDR entity assigned to handle a dispute must determine whether the dispute is eligible within 5 business days and notify both parties and the government. If the IDR entity requests additional information, each party has only 5 business days to respond. If a party does not respond in time, the IDR entity may proceed without that party’s input or close the dispute entirely if it cannot move forward.
- Lower Fees May Mean More Disputes and Missed Payments Have Consequences – As of June 11, 2026, the administrative fee for the IDR process has been reduced from $115 to just $15 per party per dispute, regardless of the amount at issue or whether the dispute is ultimately found eligible. However, if a party fails to pay the administrative fee or the IDR entity’s fee by the time its offer is due, that party’s offer will not count and the party will still owe the fees. The government has also expanded the situations in which IDR deadlines can be extended, such as when there is an unexpectedly high volume of disputes or technical problems with the Federal IDR portal. The government will publicly announce any such extensions.
Because providers prevail in over 80% of IDR determinations, plan sponsors may want to consider how the NSA’s IDR framework impacts their cost-containment strategy. The IDR process uses “baseball-style” arbitration, in which an independent arbitrator selects either the plan’s or the provider’s proposed payment amounts. If a plan sponsor fails to comply with procedural requirements, the arbitrator may rule in favor of the provider by default, unnecessarily increasing plan costs. As noted above, to mitigate this risk, plan sponsors can work with their TPAs and include protective provisions in their TPA services agreement.
