CMS Finalizes Federal IDR Operations Rule: Key Changes to the No Surprises Act Dispute Resolution Process for Providers

I. Communication and Open Negotiation

The rule requires payers to use specific Claim Adjustment Reason Codes (CARCs) and Remittance Advice Remark Codes (RARCs) on all remittance advice sent to out-of-network providers, indicating whether a claim is subject to the NSA's surprise billing provisions. Payers must also disclose additional information with initial payments or denials, including the plan's legal business name, plan sponsor name (if applicable), and IDR registration number.

The rule also restructures the open negotiation process. Providers must now submit open negotiation notices through the Federal IDR portal, and the responding party must furnish an open negotiation response notice by the 15th business day of the 30-business-day negotiation period. Both notices require expanded content elements, including eligibility documentation and information sufficient to identify the parties and items at issue.

II. Batching

The rule expands the criteria for batching multiple items or services into a single dispute. Providers may now batch items furnished to a single patient during a single patient encounter (same or consecutive dates of service, same claim form); items billed under the same service code or comparable code across patients; and for anesthesiology, radiology, pathology, and laboratory services, items billed under service codes in the same Category I CPT code range. Batched disputes are capped at 50 line items.

III. Eligibility, Fees, and IDR Registry

Certified IDR entities must now determine eligibility within five business days of final selection and notify both parties and the Departments. Parties must respond to requests for additional information within five business days, or the determination proceeds without it.

The administrative fee is reduced to $15 per party per dispute. If either party fails to pay the administrative or the certified IDR entity fee by the time offers are due, that party's offer will not be considered received, which is effectively a default in favor of the other party. The Departments retain the right to collect unpaid fees under federal debt collection laws.

To address difficulty identifying the correct payer, the rule establishes a new Federal IDR registry. Payers must register with the Departments and provide information on plan type, state law opt-in status, and contact information. Providers will access registration numbers through the Federal IDR portal to use in initiating disputes.

IV. Timeframes

Most of the rule's procedural changes, including the new open negotiation, IDR initiation, batching, and eligibility provisions, take effect 90 days after the Departments announce that supporting Federal IDR portal functionality is available. The $15 administrative fee applies to disputes initiated on or after June 11, 2026. The IDR registry provisions become applicable 90 business days after the Departments announce registry functionality.

V. Enforcement

Despite commenter requests for monetary penalties and default judgments, the Departments declined to adopt new enforcement mechanisms to address payer noncompliance with IDR outcomes. The Departments expressly declined to adopt additional penalties or default judgment frameworks and instead continue to rely on existing statutory enforcement authorities. The Departments indicate that they will monitor for non-compliance subject to workforce availability.

As a practical matter, providers should be aware that this leaves a gap between IDR determinations and actual payment, particularly where payers delay or fail to remit amounts consistent with IDR awards. Enforcement of IDR awards has been an ongoing challenge for many providers, and the lack of an additional framework to ensure payment following a favorable award provides increasing complexities for providers. In this environment, proactive documentation, escalation through existing regulatory channels, and, where appropriate, consideration of contractual or legal remedies remain critical to enforcing payment rights.

VI. Implications for Providers

 In light of the Final Rule, providers should take the following actions to support successful IDR processes:

• Update IDR Intake and Workflow Processes. Align internal workflows with the portal-based submission requirements for open negotiation notices and IDR initiation. Ensure required data elements (including payer identification information and eligibility documentation) are consistently captured at the outset.
   
• Implement Timeline Controls. Build and monitor internal ticklers for key deadlines, including:
  • Submission of open negotiation notices through the Federal IDR portal;
  • The 30-business-day negotiation period; and
  • The 15-business-day deadline for payer open negotiation response notices.
    Timely escalation protocols should be in place where payers fail to respond.
     
• Enhance Remittance Review and Documentation. Train revenue cycle teams to identify and track required CARC and RARC codes on remittance advice. Any deficiencies should be contemporaneously documented to support extension requests or potential compliance complaints. The use of CARC and RARC codes helps define an IDR strategy with regard to challenging payment determinations as well as identifying payor patterns and practices.
   
• Leverage Expanded Batching Opportunities. Reassess dispute strategy in light of expanded batching flexibility (including cross-patient and code-based batching where permitted), while remaining mindful of the 50-line-item limitation. This may provide a more consistent approach to disputing certain claims and prevent inconsistencies in IDR awards that relate to the same, or similar, claim determination rationale, services, and patient encounter.
   
• Confirm Payer Identification Through the IDR Registry. Incorporate use of the IDR registry into dispute initiation workflows to reduce rejected or delayed filings resulting from incorrect payer identification.
   
• Strengthen Documentation for Disputes. Given ongoing scrutiny of eligibility and timelines, develop standardized support packages for IDR submissions, including documentation sufficient to establish NSA applicability, service categorization, and compliance with process requirements.
   
• Track and Escalate Payer Noncompliance. Maintain a centralized log of payer failures, including incomplete remittance advice, missed negotiation deadlines, and failures to comply with IDR determinations. The Departments have encouraged reporting such issues to the No Surprises Help Desk, and documentation will be important to support any escalations and potential further rulemaking to provide a uniform pathway toward enforcement of IDR awards.

For more information about the Final Rule or further analysis regarding the impact of the Federal IDR Operations Final Rule on your organization, please contact Layna Cook Rush, Alissa D. Fleming, Samuel Cottle, or any other member of Baker Donelson's Health Law Group.