Deanna J. Sizemore, Director, Benefits Compliance
For nearly four years, the No Surprises Act’s (“NSA”) Independent Dispute Resolution (“IDR”) process has been the mechanism insurers, providers, and self-funded group health plans (“plans”) use to settle out-of-network payment disputes when negotiation fails. This past summer, a sweeping federal operations rule, a major appellate ruling, and new enforcement guidance together redefined the IDR process. Plans now face the most consequential set of IDR changes since the program launched on January 1, 2022.
On June 4, 2026, the Departments of Labor, Health and Human Services, and Treasury, together with the Office of Personnel Management (“the agencies”), published a final rule overhauling how the Federal IDR process operates. The rule took effect August 3, 2026, with several provisions phasing in through early 2027. Under the new rule, plan sponsors face several changes.
Plans will be required to obtain their own federal IDR registration number in the new registry, within 90 business days after it goes live. The IDR registry is expected to roll out in phases later this year. A third-party administrator (“TPA”) or insurer may register on behalf of the plan, but this is a plan-level compliance obligation. Once registered, plans will receive an IDR registration number that will be used in future communications. In addition to the IDR registration, the agencies will roll out a new centralized federal IDR portal beginning in 2027. The portal will manage open negotiation, dispute initiation, and arbitrator selection.
The final rule reduces the per-party administrative fee for initiating a dispute from $115 to $15, effective for disputes initiated on or after June 11, 2026. It also allows for a larger number of claims to be bundled together and requires tighter timeframes for responses. Beginning on or after November 1, 2026, up to 50 items or services can be bundled into a single dispute (previously capped at 25). The time limit to determine if a dispute is eligible will be five business days. The IDR entity must notify each party and the agencies of their determination. If a party disputes the claim, the other party and agencies must be notified through the IDR portal, which kicks off a 30-business-day open negotiation period. The receiving party must provide a response by the 15th day of the 30-day period.
Initial payment and denial notices to out-of-network providers must now include the plan’s legal name, the plan sponsor’s legal name, and the plan’s registration number, along with standardized claim adjustment reason codes (“CARCs”) and remittance advice remark codes (“RARCs”). These codes identify if a claim is subject to the IDR process.
On August 11, 2026, the Fifth Circuit Court of Appeals ruled in Texas Medical Association, et al. v. United States Department of Health and Human Services et al. (“TMA III”), striking down two federal regulations governing how the Qualifying Payment Amount (“QPA”) is calculated. The QPA is the benchmark rate used in IDR proceedings.
The court struck down two practices as artificially reducing QPAs: (1) allowing insurers and TPAs to include “ghost rates,” (contracted rates for services a provider does not actually furnish), and (2) excluding bonuses and incentive payments from the contracted-rate calculations. With the ruling, the agencies are expected to issue new QPA guidance. In the meantime, FAQ Part 73, issued April 1, 2026, extends enforcement discretion allowing plans and issuers to keep using the pre-existing 2021 QPA methodology through at least October 1, 2026, for both cost-sharing calculations and IDR submissions. We anticipate follow-up guidance reconciling the FAQ with the Fifth Circuit’s ruling before year-end.
Self-funded plan sponsors should work with their TPAs or insurers to prepare for the upcoming IDR changes, including the registration process, compliance with the new IDR requirements, and QPA calculation methodology. Furthermore, plan sponsors should review service agreements and understand the cost impact to the plan. This should be a priority for plan sponsors between now and early 2027. The Baldwin Group will continue to monitor and provide additional guidance as it becomes available.
Employer action items
01. Confirm IDR registration.
- Verify if the plan, TPA or insurer is completing registration for the plan and obtain written confirmation of who is initiating the request and who is responsible for maintaining it once the registry opens.
02. Request the TPA or insurer’s current QPA methodology in writing.
- The plan should ask whether the TPA or insurer’s QPA calculations include ghost rates or exclude bonuses and incentive payments, and how they plan to respond to TMA III once new guidance is issued.
03. Understand the TPA or insurer’s IDR process.
- What is the TPA or insurer’s process for triaging, batching, and responding to disputes efficiently within the new 15-business-day open negotiation response window?
- If there are gaps in the process, plan sponsors should revisit the TPA service agreement or insurer administrative services agreement to address the new requirements and confirm performance guarantees are in place to protect the plan in the event the TPA fails to comply.
04. Understand the IDR cost impact to the plan.
- Your Baldwin Group team can work with the TPA or insurer to help identify and quantify how much the plan’s cost is attributable to IDR and out-of-network arbitration. How does this information impact the plan’s cost-containment strategy?
Summary
A sweeping CMS operations rule, a landmark Fifth Circuit ruling, and new guidance have reshaped the No Surprises Act’s IDR process over the second half of 2026. Self-funded plan sponsors now face a new plan-level registration requirement, a reduced IDR filing fee, and a QPA benchmark change following the TMA III ruling—against a backdrop of $22.4 billion in cumulative IDR costs already flowing into plan trend and premiums. Plan sponsors should treat the period between now and first quarter 2027 as a critical compliance and cost-planning window and should engage their TPA or insurer now on registration, QPA methodology, and service-agreement gaps.
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