What the New No Surprises Act Final Rule Means for Providers and Insurers

The Problem the Law Was Built to Solve

Surprise medical billing occurs when a patient receives care from an out-of-network provider they did not choose and cannot control, such as a trip to the emergency room, or an out-of-network anesthesiologist or assistant surgeon working at an otherwise in-network facility. The provider bills the patient directly for the gap between the insurer’s payment and its full charges. This is called “balance billing.” The No Surprises Act (“NSA”), which became effective January 1, 2022, ended that practice by removing patients from the process entirely and places the burden of resolving out-of-network reimbursement on providers and payors.

Under the NSA, out-of-network providers cannot balance bill patients for emergency care, for out-of-network care delivered at in-network facilities, or for air ambulance services. Patients pay only their in-network cost-share. The law applies to employer-sponsored, individual, and family health plans.

How IDR Was Supposed to Work, and Why It Failed

If providers and insurers cannot agree on a payment amount, either party can initiate a dispute through the federal Independent Dispute Resolution (“IDR”) process, administered by an HHS-certified third party decisionmaker (an “IDR Entity”) using a baseball-style model designed to encourage settlement. “Baseball-style” means that each party submits their final offer to the IDR Entity, who then chooses between one of the two offers. In practice, the number of disputes filed quickly exceeded Congress’s original projections.  As a result, the IDR system became overwhelmed, and federal courts were flooded with challenges to both awards issued in IDR and the NSA itself. Since inception of the process in 2022, CMS has shut down the IDR process completely for weeks at a time to address these challenges.

What the Final Rule Does

On May 28, 2026, the Trump administration finalized new IDR regulations (CMS-9897), issued jointly by the U.S. Departments of Health & Human Services, Labor, and Treasury (the “Departments”). The rule represents the most significant procedural overhaul of the IDR system since its launch in 2022, addressing the core dysfunctions that have plagued the process: an overwhelming volume of disputes, inconsistent eligibility screening,  administrative fee structures that incentivized high-volume bulk filings, and a lack of standardized procedures. The rule aims to streamline the review process and enhance its auditability.  The rule’s most consequential changes are:

1. New Disclosure Requirements. Plans and issuers must now include unique registration numbers in initial payment notices, addressing a long-cited source of procedural friction that arises when a single issuer administers multiple distinct plan structures.
2. Standardized Billing Communication Codes. Plans and issuers must use standardized claim adjustment reason codes (“CARCs”) and remittance advice remark codes (“RARCs”) in remittance advice furnished to entities without a contractual relationship with the plan or issuer, with the goal of reducing administrative ambiguity and improving the accuracy of information entering the IDR system. The specific codes to be used will be identified in future regulatory guidance, and plans and issuers will not be required to comply with this requirement until an applicability date is specified in that guidance.
3. Overhauled Initiation, Eligibility Review, and Open Negotiation. Parties must submit additional information upfront for eligibility assessment. This is perhaps the most significant process change. A large number – and possibly a large proportion – of the disputes that have been through the IDR process were arguably ineligible for the process. A party now initiates open negotiation by submitting a notice to the other party and the Departments through the Federal IDR portal and the receiving party must respond no later than the 15th business day of the existing 30-business-day Open Negotiation Period (“ONP”). The rule expressly prohibits plans and issuers from requiring duplicative submission through proprietary portals. Eligibility determinations are made by the certified IDR Entity within 5 business days after final IDR Entity selection.
4. Mandatory Federal IDR Portal Registration. Plans and issuers are now required to register in the federal portal, creating a more auditable and traceable process for all parties. Registration must occur no later than 90 business days after the registry becomes available, or before the plan or issuer begins offering coverage subject to Federal IDR, whichever is later. Failure to register by the applicable deadline constitutes a violation.
5. Revised Batching and Bundling Rules. The rule restructures the conditions under which disputes can be grouped and processed jointly. A new 50 line-item cap applies to batched disputes. The rule simultaneously expands permissible batching categories, including by single patient encounter, by same or comparable service code, and for anesthesiology, radiology, pathology, and laboratory services, by Category I CPT code ranges to be specified in future guidance. The cooling-off period for batched disputes is reduced from 90 calendar days to 30 business days.
6. IDR Entity Accountability. Certified IDR Entities are now subject to enhanced monitoring, with corrective action available, under which any party may submit a petition to the Departments to revoke a certified IDR Entity’s certification.
7. An 87% Fee Reduction. The per-party administrative fee drops from $115 to $15. This reduces the financial barrier to legitimate disputes and IDR Entities’ incentives to accept ineligible disputes while eliminating much of the strategic advantage of high-volume bulk filing.

What This Rule Likely Will Not Fix

Despite the rule's far-reaching effects, two distinct legal questions remain unresolved. Both questions relate to the Qualifying Payment Amount, or QPA. To oversimplify, the QPA is the median price a payer pays its contracted providers for a particular service.  The first open question is how the QPA should be calculated. A federal district court vacated the calculation rules in 2023.[1] A panel of the Fifth Circuit partially reversed, but the en banc Circuit vacated the panel opinion and ordered en banc rehearing.[2] The en banc decision remains pending, and in the interim the Departments are exercising enforcement discretion, permitting payers to use the original 2021 calculation methodologies. Second, how much weight IDR Entities must give the QPA when balanced against the other factors the NSA states the IDR Entity should consider when choosing between the two offers before it, such as provider training, clinical complexity and patient acuity. Prior rules that had elevated the QPA as the presumptive benchmark were vacated and the Final Rule does not fill that void, leaving IDR Entities without a clear decisional hierarchy. Compounding both issues, the Fifth Circuit and most district courts that have considered the issue have ruled that providers lack a private right of action to compel payment of IDR awards in federal court, leaving enforcement to HHS. All of these issues await the Fifth Circuit en banc decision, further litigation, or congressional action.

Key Takeaways

For providers, the rule brings new disclosure obligations, revised IDR initiation timelines, mandatory portal registration, and tighter batching rules. Dispute eligibility will face heightened scrutiny, directly affecting those who have used bulk filings as a revenue strategy. For payers and plan administrators, standardized billing codes, more detailed initial payment disclosures, and portal registration are now required. The fee reduction removes a practical justification for defaulting, and the IDR Entity accountability framework applies across the board.

This is the most comprehensive procedural overhaul of the IDR process to date. It will not resolve every outstanding issue, but by cutting fees, tightening eligibility review, standardizing communications, and introducing IDR Entity accountability, the final rule offers a more workable foundation for a system that badly needed an overhaul. Whether it results in meaningful change will depend on how courts, providers, and insurers respond, and whether pending litigation reshapes the landscape before the ink is dry.

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