No Surprises Act Final Rule Released
The long-awaited final rule addresses technical issues raised by stakeholders to improve and streamline the arbitration process established under the No Surprises Act.
On September 28, 2026, the final rule for the No Surprises Act (NSA) was released. The rule focused on improving the implementation of the NSA-established independent dispute resolution (IDR) process. The IDR process was established to facilitate the settlement of disputes between providers and payors regarding out-of-network claims. There have been growing concerns about the IDR process, which recently made splashy headlines in the mainstream media. Government regulators have indicated that this final rule is intended to “make dispute resolution more streamlined and lower the costs for participating companies.”
Background
The NSA, enacted on December 7, 2020, as part of the Consolidated Appropriations Act of 2021, was created to protect patients from receiving unexpected and large “balance bills” when out-of-network care is provided. While it applies broadly to patients covered by group and individual health plans, the law primarily affects emergency care, anesthesiology, radiology, and air ambulance services.
The NSA banned balance billing and established the IDR process in 2022. Providers and payors must resolve disputes through binding arbitration rather than billing patients. Most analysts agree that the NSA has largely shielded patients from surprise bills, but concerns about the IDR process have persisted since its implementation. Payors complain that providers win most cases and are awarded payments significantly higher than standard network rates. In contrast, physicians complain about the administrative backlog of complaints, insurer nonpayment, and a lack of transparency in the arbitration process.
Since 2022, numerous lawsuits have challenged aspects of the law, and advocacy efforts have sought to reform the process. The Biden Administration released a proposed rule on November 3, 2023, to address concerns about the IDR process, and the Trump Administration has now finalized the rule.
Key Provisions
Key provisions of the final rule are highlighted below.
Communication Requirements: Two provisions are designed to address concerns about communication between payors and providers.
Standardized claim codes: Health plans must use standardized claim adjustment reason codes (CARCs) and remittance advice remark codes (RARCs) when providing any paper or electronic remittance advice to a non-contracted provider. This will help providers more easily determine whether a service is eligible for the IDR process.
Additional information:Payors must provide additional information at the time of payment or upon receipt of a notice of denial of payment. This includes the legal name, IDR registration number, and a standard statement of the departments to notify to initiate an open negotiation. This requirement is designed to address concerns reported by payors and providers regarding communication difficulties.
Open Negotiations: The NSA established a 30-day open negotiation period before initiating the IDR process to encourage discussion between the parties and help avoid arbitration, if possible. The final rule includes several provisions to facilitate these discussions, including the establishment of an open negotiation response notice. This provision addresses concerns that the 30-day negotiation period was not being used.
Batching: Batching groups multiple items or services into a single dispute. The final rule sets criteria to facilitate this process. Claims can be grouped if they involve the same patient (on the same or consecutive days, using the same claim form), the same service code, or specific specialty codes (e.g., anesthesiology, radiology) within the same CPT code section. A cap of 50 line items per batched dispute has been established. This provision addresses concerns about administrative backlogs and aims to improve efficiency while acknowledging the administrative capacity of entities acting as IDRs.
Administrative Fee: The federal administrative fee for both payors and providers has been significantly reduced from $115 per party per dispute to $15. The fee is necessary to make the process financially self-sustaining. The final rule also states that the government has the right to collect unpaid fees “consistent with federal debt collection laws.” The fee reduction balances that need with the goal of making the process more affordable.
IDR Registry: The final rule established an IDR registry. All payors subject to the IDR process must register and provide certain general information. This addresses concerns from providers and IDR entities that identifying payors and locating their contact information can be difficult.
Extenuating Circumstances: The final rule revises the types of extenuating circumstances that may justify an extension of the IDR process time. This could occur when there is an unexpectedly high volume of disputes, the federal IDR portal fails, or there are systematic delays in processing disputes, CMS noted. Parties may continue to request extensions through the federal IDR portal.
IDR Eligibility: The final rule includes provisions to make it easier to determine whether a service is eligible for the IDR process. IDR entities must determine eligibility within 5 business days of selection and notify both disputing parties and the federal government at that time. In addition, the final rule requires parties to submit detailed information to the IDR entity within 5 business days of the request. If a party fails to do so, the arbitrator will either proceed without that information or close the dispute. The IDR process has been time-consuming, and the initial identification step has been one factor that has extended it. The hope is that establishing these timelines will reduce the overall complexity and duration of the process.
Not Included in the Final Rule
Notably absent from this final rule are enforcement provisions. Providers have raised concerns that they are not being paid, or are not fully paid, after an arbitration decision is finalized. Although the final rule requires payment within 30 days, some stakeholders will be disappointed by the lack of expanded enforcement authorities. Congress is trying to address the enforcement gap through the bipartisan, bicameral No Surprises Enforcement Act, introduced on July 23, 2025.
Initial Reaction
Initial stakeholder reactions have been appreciative that the final rule was released but generally cautious, acknowledging that important steps have been taken but more work remains. For example, the Medical Management Group Association (MGMA) released a statement, and specialty organizations representing anesthesia, emergency medicine, and radiology issued a joint statement. The Blue Cross Blue Shield Association also issued a statement.
Next Steps
I would have to agree with the general sentiment expressed in the various statements issued after the final rule's release that this is a step forward, but significant work still lies ahead. We have not yet heard the last of the No Surprises Act.
Resources
Key resources for the final rule are listed below.
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For more information and questions, please contact:
Sheila Madhani
Madhani Healthcare Consulting
Email: smadhani@madhani-health.com
Tel: (202) 679-2977