No Surprises Act Final Rule: Something for Everyone to Love, but Challenges Remain
After more than two and a half years of deliberation, on June 4, 2026, the Health and Human Services, Labor, and Treasury Departments (the Departments) issued a Final Rule (the Final Rule) updating the rules governing the Federal Independent Dispute Resolution (IDR) process under the No Surprises Act (NSA). Both providers who submit disputes to the IDR process and payors who respond to those disputes will find aspects of the Final Rule that are helpful. For all participants, the Final Rule provides useful clarity on several key provisions in the IDR rules.
The backdrop for the Final Rule is a Federal IDR program that has vastly exceeded expectations. Regulators anticipated roughly 22,000 disputes in the program's first year. Instead, the program received more than 5.1 million disputes since the program launched. The Departments attribute the volume to several factors: allegations that plans' qualifying payment amount (QPA) calculations are artificially low, lack of meaningful engagement during the open negotiation period, repeated litigation-driven shutdowns of the portal, and large numbers of allegedly ineligible disputes. The Final Rule is primarily aimed at addressing some of the operational failures created by this unanticipated volume by forcing earlier information exchange and tightening procedures before disputes reach arbitration. But some of the changes, like the imposition of numeric limits on the number of items that can be submitted to an IDR process, may pose challenges for providers.
Our analysis below addresses some of the key changes made by the Final Rule.
New Requirement That Payors Notify Providers if a Claim Is Subject to IDR
In response to provider complaints that they do not always know whether a claim is subject to the No Surprises Act and the IDR process, and to address payor objections to ineligible claims being submitted to the IDR process, the Final Rule finalizes a requirement that payors use 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 payor. Payors will provide the applicable CARCs and RARCs to indicate whether a claim for an item or service furnished by a non-contracted provider is or is not subject to the NSA's surprise billing provisions and the Federal IDR process.
Notably, the Final Rule did not mandate the use of specific CARC or RARC codes. The Centers for Medicare & Medicaid Services (CMS) has issued a list of RARC codes that payors could use on a voluntary basis, but there was no requirement that they use those codes, and adoption has been inconsistent. CMS has convened committees to issue mandatory CARC/RARC codes, but until that guidance is issued, providers can expect continued inconsistency in the CARC/RARC codes they receive from payors.
New Portal Submission and Disclosure Requirements During Open Negotiation
Both providers and payors will have new obligations during the mandatory 30-business day open negotiation period that precedes the submission of disputes to the IDR process. The Final Rule will require that providers initiate the open negotiation through the federal IDR portal, a change from current practice in which providers interface directly with payors during the 30-business day period without providing notice to any federal entity. The Final Rule also enhances information-sharing during the 30‑day period, including a new requirement that the non‑initiating party respond to an open negotiation notice through the IDR portal no later than the 15th business day of the 30-business day open negotiation period.
These requirements are designed to improve transparency and encourage resolution before arbitration. Note that these requirements will not go into effect until further guidance is issued by the Departments, so providers should watch for updates.
Reduced Administrative Fee for IDR
One of the most notable changes is the dramatic reduction in the administrative fee required to initiate the IDR process. Under the Final Rule, for disputes initiated on or after June 11, 2026, the fee decreased from $115 to $15 per party per dispute.
The Departments explained that the prior fee created barriers for providers to challenge underpayments. By lowering the fee, the aim is to increase access to the arbitration process and promote more equitable dispute resolution between providers and plans.
The practical impact for providers will be that the reduced fee may make it economically viable to challenge smaller underpayments that previously would not justify the cost of submitting a dispute to the IDR process. With fewer barriers to entry to the IDR process, providers anticipate that payors may need to reassess their settlement approach during the mandatory open negotiation period.
Clarified and Expanded Batching Rules
The Final Rule also clarifies when multiple claims may be batched into a single IDR proceeding, a critical issue for providers seeking to efficiently resolve large volumes of similar disputes. Before the Final Rule, items could be batched under the following circumstances:
- Services were rendered by the same provider or facility;
- Payment of the disputed claims was made by the same group health plan or insurance issuer; and
- The services occurred within the same 30-business-day window.
Under the Final Rule, the Departments revised another criteria that existed before the Final Rule—that batched items or services arise under the "same or similar code"—to allow for three additional opportunities to submit batched items:
- items and services are furnished to a single patient on the same, or consecutive dates of service, and billed on the same claim form (a patient encounter);
- items and services are furnished to one or more patients and are billed under the same service code or a comparable code under a different procedural code system (e.g., CPT and HCPCS); and
- anesthesiology, radiology, pathology, and laboratory items and services that are furnished to one or more patients under service codes belonging to the same Category I CPT code section, as specified in guidance by the Departments.
These clarifications are intended to streamline the dispute process and reduce administrative burden. For providers that routinely encounter systemic underpayment patterns, expanded batching may provide a more efficient path to pursuing recovery.
In addition, the Departments finalized a limit of 50 items that can be submitted to a single IDR dispute. While some may view this as a win for providers as it represents an increase from the 25-item cap that was originally proposed in the 2023 proposed rule, the imposition of any cap is a departure from the original IDR process, which did not impose a cap on the number of items that could be submitted to a single IDR process. The imposition of the 50-item cap could complicate matters for providers that have high volumes of claims needing resolution.
The modifications to the definition of a batched dispute will be applicable for disputes with open negotiation periods beginning on or after August 3, 2026, and the modifications to the treatment of batched and bundled IDR items and services will apply to disputes with open negotiation periods beginning 90 days after the Departments issue guidance announcing that the functionality supporting these provisions has become available.
Key Takeaways for Providers
The operational changes to the federal IDR process are likely to reshape the payment dispute landscape. Lower arbitration costs may incentivize providers to pursue disputes that previously went unchallenged, and expanded disclosure obligations may provide additional opportunities to resolve disputes before submitting them to arbitration. But new numeric limitations on batching disputes could complicate providers' planning.
Providers should consider reviewing internal processes for identifying underpaid claims and evaluating whether implementing a revised IDR strategy may help recover outstanding reimbursement.
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John Barnes is a partner and Rawan Khalili is an associate, both located in DWT's San Francisco office. For any questions or more insights, please contact the authors or another member of our healthcare team and sign up for our alerts.