Recently, the Departments of Health and Human Services, Labor, and the Treasury, together with the Office of Personnel Management, finalized the Independent Dispute Resolution (IDR) Operations rule under the No Surprises Act (NSA). While third-party administrators (TPAs) typically handle much of the day-to-day compliance work, self-insured employers remain ultimately responsible for their plan’s compliance. Employers should use this rule as an opportunity to confirm that their TPAs are operationally prepared, as outlined below.

Background

The NSA established a federal independent dispute resolution process to determine the out-of-network payment amount for certain surprise billing claims when the parties cannot resolve the dispute through open negotiation. For additional details, see our article No Surprises Act: New Final Rule and Guidance.

Since the IDR process launched, dispute volume has far exceeded federal expectations, creating delays and highlighting gaps in payer identification, eligibility determinations, and information-sharing. The final rule is intended to streamline communication among payers, providers, and certified IDR entities and reduce the number of ineligible disputes submitted to the federal IDR process.

Operational Updates to the Federal IDR Process

Highlights of the key provisions of the IDR operational rule include:

  • Administrative Fee Reduction. The federal IDR administrative fee is reduced from $115 to $15 per party, per dispute, for disputes initiated on or after June 11, 2026. The lower fee may reduce cost barriers to initiating IDR, which could increase dispute volume and make TPA monitoring even more important.
  • IDR Registry. The final rule establishes a Federal IDR Registry for payers subject to the federal IDR process. Self-insured group health plans and health insurance issuers must register with the Departments and obtain an IDR registration number. The registry is intended to help parties identify the correct payer, plan type, contact information, state law opt-in status, and enforcement jurisdiction. Plans and issuers must register within 90 business days after the registry becomes available, or by the date coverage first becomes subject to the Federal IDR process, if later. TPAs and other service providers may complete registration on behalf of group health plans, but self-insured plan sponsors should confirm who will be responsible for registration and ongoing maintenance of the required information. Additional guidance is anticipated once the registry is available.
  • Restructured Negotiations Process. Once available, the Federal IDR Registry portal will serve as the central platform for initiating open negotiations. A party will start the 30-business-day open negotiation period by submitting written notice through the portal using standardized forms developed by the Departments. Plans and issuers must respond by the 15th business day. If the parties do not reach agreement, either party may initiate the IDR process through the federal portal within 4 business days after the open negotiation period ends, and the other party must respond within 3 business days. This centralized process is intended to improve information-sharing and may help address employer concerns that some IDR awards involve claims that were never eligible for IDR.
  • IDR Eligibility Determination. Certified IDR entities will continue to determine whether disputes are eligible for the federal IDR process. The final rule adds a 5-business-day deadline for eligibility determinations after final selection of the IDR entity.
  • Disclosure and Remittance Code Requirements. Plans and issuers must include standardized claim adjustment reason codes (CARCs) and remittance advice remark codes (RARCs) in initial payment or denial communications for NSA-related claims. This is intended to help providers more quickly determine whether a claim may fall under the NSA, whether federal IDR is available, and which plan or issuer is responsible. Additional guidance is anticipated before payers must comply with this requirement.

The rule is officially effective August 3, 2026, although applicability dates vary by provision, and several requirements will require additional guidance before implementation.

Employer Takeaways

The Operational Rule is expected to primarily affect TPAs and other service providers that administer claims and IDR processes for self-insured group health plans. However, because self-insured plans remain ultimately responsible for compliance, plan sponsors should take the following steps:

  • Review administrative services agreements to ensure they address the TPA’s obligations under the final rule, including timelines, reporting, use of required codes, and cooperation with certified IDR entities – and confirm overall TPA readiness.
  • Determine responsibility for IDR Registry registration, including who will register the plan, maintain registration information, and provide the IDR registration number in required disclosures.
  • Monitor IDR activity and outcomes, including dispute volume, eligibility challenges, administrative fees, IDR entity fees, and awards involving the plan.

Sequoia will continue to monitor implementation guidance, including future guidance on the Federal IDR Registry, and communicate updates as appropriate.

Additional Resources

Connect with a Sequoia consultant to learn how Sequoia’s compliance services are integrated in our benefits services and tailored solutions. And if you’re already a Sequoia client, stay on top of your employer obligations with your Compliance Checklist that highlights important compliance dates, action items, and resources.  

The information and materials on this blog are provided for informational purposes only and are not intended to constitute legal or tax advice. Information provided in this blog may not reflect the most current legal developments and may vary by jurisdiction. The content on this blog is for general informational purposes only and does not apply to any particular facts or circumstances. The use of this blog does not in any way establish an attorney-client relationship, nor should any such relationship be implied, and the contents do not constitute legal or tax advice. If you require legal or tax advice, please consult with a licensed attorney or tax professional in your jurisdiction. The contributing authors expressly disclaim all liability to any persons or entities with respect to any action or inaction based on the contents of this blog.

Diane Cross — Diane is a Compliance Director for Sequoia, where she works with our clients to optimize and streamline benefits compliance. In her free time, Diane enjoys spending time with her family, live music, and cycling.