Two years and eight months after the release of the proposed federal IDR operations rule, the Departments of Health & Human Services, Labor and Treasury (“Departments”) have issued, at long last, the final rule that outlines sweeping changes intended to streamline future IDR proceedings (“Final Rule”).

A great deal of ink has already been spilled in the two weeks since the Final Rule was first released.  The Departments’ own May 28, 2026 Fact Sheet does an excellent job summarizing the high points of the Rule.  The focus of this particular post is the “big picture”: what the release of the Final Rule means in the larger context of the evolving No Surprises Act (NSA) landscape, and where the IDR process is headed.

There’s Nothing Wrong with the No Surprises Act!

For the past several years, payors have been sounding the alarm about the NSA’s supposedly catastrophic shortcomings. They have issued breathless press releases about billions in alleged “wasteful” healthcare spending caused by the NSA, such as $2.24 billion in additional payment to deserving providers awarded through the IDR process.  And they have complained vociferously about “ineligible” disputes (even though a certified IDR entity determines each dispute is eligible before ruling upon it).[i]

National insurers have even brought a wave of lawsuits accusing health providers and their IDR vendors of utilizing the IDR process as a “vehicle for fraud.”  These lawsuits are without merit. They merely seek to relitigate the outcome of IDR proceedings or to reopen procedural and policy debates that were settled when Congress passed the NSA, when the Departments issued prior interim and final rules[ii], or when the courts resolved APA challenges to NSA regulations[iii].  Remarkably, courts have dismissed at least four of these so-called “fraud” cases with prejudice in the past 60 days.[iv]

Against this backdrop, it is notable that the Final Rule reduces the per-party administrative fee from $115 to $15, effective June 11, 2026.  The push to make IDR more accessible to physicians and other providers, not less, undercuts the payors’ narrative – and their contention that IDR should be difficult to access and rarely used. It also reaffirms the valuable role played by IDR in resolving payor-provider disputes while keeping the patient out of the middle.

The Final Rule also represents a refreshing change from the federal government’s prior approach.  When the NSA was still new, the Departments sought to minimize the number of IDRs filed by essentially forcing arbiters to select the offer closest to the payer-calculated Qualifying Payment Amount (QPA).  That approach was repeatedly overturned in the courts before the Departments abandoned it.[v]

The many thoughtful, granular improvements to the IDR process established in the Final Rule will ultimately help minimize the number of ineligible disputes that are sent to IDR – which is the core of the health plans’ grievance.  This further weakens the payor rationale for sharply limiting access to IDR (or ending it entirely).

Improved Processes for Better Understanding and Determining Eligibility

The Departments openly acknowledge that deciding eligibility is one of the trickiest and most complex issues to be resolved in IDR.  Encouragingly, the Final Rule makes real changes that, taken together, help minimize the risk of ineligible determinations:

• Requiring payors to include denial codes (known as CARC/RARC codes) on all provider explanations of benefits (PEOBs) for out-of-network services, whether paper or electronic, and regardless of whether they are subject to the No Surprises Act. Payors, not providers, are the only ones with complete knowledge of whether a claim is IDR-eligible. There has been great variation and ambiguity in PEOBs across payors, and sometimes even for the same payor.  This makes it difficult if not impossible for providers to determine if a claim is eligible for IDR. Requiring the use of  standardized CARC/RARC codes will keep providers informed of whether the payor believes, based on its superior knowledge, that the claim is eligible for IDR – and enable providers to initiate IDR in appropriate circumstances.  But while a generalized obligation to use CARC/RARC codes will be imposed as of the effective date of the Final Rule, the Final Rule itself does not actually require payors to use any specific CARC/RARC codes yet.  Many of those codes have not yet been approved by the committees convened to do so, and further CMS guidance will be required.
• Requiring payors to register in a new Federal IDR registry and be issued a registration number; which must be disclosed, along with the legal business name of the plan /plan sponsor on the initial payment or payment denial. Anyone who has tried to initiate an open negotiation or IDR proceeding knows how difficult it can be to identify the appropriate payor.  An EOB may simply identify “Aetna” or another third-party administrator, for instance.  Rather than permitting payors to hide behind an administrator or a fictional business name, the Departments’ approach requires complete transparency.  (Unfortunately, the functionality for payors to register and receive a registration number is not yet live, and further CMS guidance also needs to issue.)
• Giving IDR entities more time to decide eligibility – 5 business days instead of the current 3 business days.[vi] The Departments note that IDR entities are already routinely deciding eligibility issues within this timeframe. They have also left open the possibility, however, that late eligibility challenges should be considered.
• Requiring initiating parties to attest that the item or service at issue “is a qualified IDR item or service,” or to attest why the item or service is not qualified. The idea is to provide sufficient evidence for the arbiter to determine eligibility. (Notably, page 22, footnote 41 of the preprint Final Rule emphasizes that the mere use by a payor of a CARC/RARC code indicating that a claim is ineligible for IDR is “not a dispositive determination of eligibility.” This prevents payors from gaming CARC/RARC codes.)

Big Procedural Changes to Open Negotiation…Once the IDR Portal Catches Up

The Final Rule also revamps the Open Negotiation process in ways that will force payors to increase their (historically very low) level of engagement prior to, and during, the IDR process:

• Open Negotiations will be brought into the IDR Portal[vii]. The 30-business day “open negotiations” period – the first required step before an IDR can be brought – currently happens outside the federal IDR portal. The Departments’ goal is to require the Open Negotiations notice to be filed in the IDR portal, not just served upon the other side.
• EOB / Remittance Advice (RA) to be attached to the Open Negotiations notice. This is a basic improvement that will increase transparency for both sides. Under the new rules, the 30-business-day open negotiation period does not begin to run until the EOB/RA is submitted to the IDR portal along with the open negotiations notice itself.
• New “Open Negotiation Response Notice” requirement. For the first time, payors and other responding parties will be required to file a Response Notice on the IDR portal no later than the 15^th business day (halfway through the 30 day period).  Interestingly, the response will require payors to confirm (among other things) that the initial amount paid and the QPA disclosed on the open negotiation notice are accurate. (If the payor disagrees, it must provide supporting documentation.) The Departments declined to finalize a requirement from the proposed rule that the responding party make a counteroffer, citing “the private nature of negotiations.”
• New “IDR Initiation Response Notice” requirement. Payors and other responding parties will also be required to file a response on the IDR portal within 3 business days following the initiation of IDR. This will permit the responding party to object to eligibility, to object to the proposed choice of certified IDR entity and propose a different entity, or to correct any information in the notice of IDR initiation.  By statute, responding parties are already obligated to object to a proposed IDR entity within 3 business days (or suggest alternate entities). So this new Response Notice requirement is best viewed as an enhancement of the existing response obligation.  (The Final Rule also helpfully clarifies that a payor cannot delay an IDR by failing to file a response notice – the IDR process will still proceed.)

Moving the initiation of open negotiations onto the federal IDR portal makes sense. Payors frequently complain that an IDR has been untimely initiated. But IDR entities usually lack the information to verify the accusation because open negotiation activity occurs outside the portal.  Once this capability is rolled out on the IDR portal, the Final Rule should help lessen confusion and bring greater transparency and insight.

Batching: Nice-to-Have Clarity, But No Longer Groundbreaking

The NSA’s statutory language around batching is ambiguous. It says only that different IDR-eligible healthcare items and services can be batched in a single IDR if they are “related to the treatment of a similar condition.”  The meaning of that phrase gave rise to endless speculation.  Some commenters guessed that language might only apply to the same or similar service provided to different patients – meaning, for instance, that numerous instances of CPT code 99283 could be batched.

One of the most anticipated features of the 2023 proposed operations rule was that it clearly stated that all the different service codes (such as CPT codes) rendered by a single provider in connection with a single patient encounter (emergency room visit, inpatient stay, procedure in a hospital) could be batched together, as long as the same payor was involved.  This proposal was not finalized for nearly three years, however. During that time, individual certified IDR entities filled the gap by adopting their own interpretations as to what codes can and cannot be batched together in a single IDR.  While these interpretations were largely aligned with what was proposed in 2023, they varied somewhat among arbiters.

The Final Rule now clearly states that items and services are “related to the treatment of a similar condition” if they are furnished to a single patient during the same patient encounter on consecutive dates and billed on a single claim form. The Rule also confirms that similar or identical codes rendered to different patients on non-consecutive days (as is common with as radiology services) can also still be batched, even though they are not billed on a single claim form. These, too, are “related to the treatment of a similar condition.”

Last, the Rule finalized the 2023 proposed rule’s requirement that no more than 50 individual items and services can be batched in any one IDR proceeding.  While this is a reasonable limitation in many instances, it remains to be seen how this rule will apply to lengthy inpatient stays that result from an emergency room admission.  In instances where they are out-of-network with a payor and intend to pursue IDR, hospitals may have to adapt how they split up bills for long inpatient stays, for instance.

Conclusion – We Still Have to Wait for the Good Stuff

In many ways, the publication of the Final Rule is a huge relief. It ends the long wait for certainty on many important aspects of IDR.  And it vindicates that IDR is a legitimate forum for resolving payment disputes and protecting patients, not some unsightly aberration.

In other ways, however, the Rule’s release is just a starting point because many of its greatest impacts are yet to come.  Some of the Rule’s features are dependent upon future CMS guidance and committee proceedings (as in the case of CARC/RARC codes).  Many others must wait for IDR portal functionality that is still being built.  It will also be interesting to see how that new functionality dovetails with the separate “IDR Gateway” features that CMS teased on March 16, 2026, which will provide new “dispute dashboards” for tracking the progress of IDRs across an organization.[viii]

For more information about the Final Rule, the No Surprises Act, or how to get the most out of the IDR process, please contact Eric Chan (eric@athenelaw.com, (310) 913-4013), or Long Do (long@athenelaw.com, (415) 680-7419).

[i] BlueCross Blue Shield, “100% Waste: Ineligible Disputes Still Getting Paid,” https://www.bcbs.com/news-and-insights/article/ineligible-arbitration-disputes-under-no-surprises-act.

[ii] Requirements Related to Surprise Billing; Part I, 86 Fed. Reg. 36,872 (July 13, 2021) (“IFR, Part I”); Requirements Related to Surprise Billing; Part II, 86 Fed. Reg. 55.980 (Oct. 7, 2021) (“IFR, Part II”); see also Requirements Related to Surprise Billing, 87 Fed. Reg. 52,618 (Aug. 26, 2022).

[iii] See Texas Medical Ass’n v. U.S HHS (TMA I), 587 F. Supp. 3d 528 (E.D. Tex. 2022); Texas Med. Ass’n v. U.S. HHS et al. (TMA II), 654 F. Supp. 3d 575 (E.D. Tex. 2023), aff’d 110 F. 4th 762 (5th Cir. 2024).

[iv] HaloMD, California Federal Court Delivers Landmark Victory for Healthcare Providers in a No Surprises Act Dispute, https://halomd.com/california-federal-court-victory-no-surprises-act/; Anthem Blue Cross Life and Health Insurance Company, et al., v. Halo MD, LLC, et al., No. 8:25-cv-01457 (C.D.Cal. April 9, 2026) (order granting motion to dismiss with prejudice); Aetna Health Inc. et al. v. Radiology Partners Inc. and Mori, Bean and Brooks, Inc., No. 3:24-cv-1343-BJD-LLL (M.D. Fla. Apr. 16, 2026) (order granting motion to dismiss with prejudice); UnitedHealthcare of Penn., Inc. v. Northstar Anesthesia of Penn. LLC, No. 25-7187 (E.D.Pa. Apr. 28, 2026) (dismissing action for lack of subject matter jurisdiction); Blue Cross Blue Shield of Texas v. HaloMD, LLC et al., No. 5:25-cv-132-RWS (E.D.Tex. May 22, 2026) (similar).  Of note, Athene Law filed an trial-court level amicus brief on behalf of the California Medical Association in the California HaloMD litigation.

[v] See TMA I, supra, 587 F. Supp. 3d 528; TMA II, supra, 654 F. Supp. 3d 575.

[vi] The NSA uses HHS’s definition of business day, found at 45 C.F.R. § 30.2, which is Monday through Friday except for federal holidays.

[vii] The current IDR portal can be accessed at: https://nsa-idr.cms.gov/paymentdisputes/s/.

[viii] The May 26, 2026 CMS fact sheet (referenced at the beginning of this article) ends with a helpful, though incomplete, section at the end titled “Applicability Dates and Effective Dates” that outlines when each of the various new requirements of the Final Rules will take effect.  Here is the link again for convenience: https://www.cms.gov/newsroom/fact-sheets/federal-independent-dispute-resolution-operations-final-rule.