It has been more than four years since key provisions of the No Surprises Act (“NSA”) took effect. By many measures, the law is achieving one of its core objectives: protecting patients from balance billing related to certain out-of-network providers. At the same time, however, the NSA has failed to provide cost-efficient and appropriate resolution of payment disputes between providers and payers.
The Federal Independent Dispute Resolution (“IDR”) process has been strained by volumes far exceeding original expectations and continues to face operational and policy challenges, which have increased plan and issuer costs and created opportunities for provider windfalls that put significant economic pressures on self-insured group health plans and health insurance issuers. Additionally, available data indicate that a significant number of IDR claims, which are otherwise outside the scope of the NSA and the IDR process, remain subject to IDR, with IDR entities (“IDREs”) most commonly finding in favor of the provider notwithstanding the ineligibility of the claims. While the sheer volume of IDRs submitted in the first half of 2025 (the most recent publicly released data) grew significantly, the percentage of determinations that select the provider’s offer remain astonishingly high.
Efforts to date have not succeeded in providing the balance between payers and providers Congress intended. However, there is some hope that the much-anticipated Federal IDR Operations Final Rule (“IDR Ops Final Rule”) could inject greater accountability into the IDR process. The IDR Ops Final Rule is expected very soon, and could cure some of the procedural issues experienced by payers in the IDR process. While we don’t know the full scope of the IDR Ops Final Rule, it will likely finalize policies proposed in 2023 aimed at improving the Federal IDR process through enhanced communication, new procedural requirements, and more streamlined workflows for payers, providers, facilities, and air ambulance providers.
In anticipation of the IDR Ops Final Rule, we are providing an overview of some recent developments that should frame any changes to the IDR process resulting from the IDR Ops Final Rule.
First, the Departments of Health and Human Services, Labor, and the Treasury (collectively, the “Departments”) appear poised to increase oversight of certified IDREs. The Centers for Medicare & Medicaid Services (CMS) is currently soliciting proposals for a contractor to audit IDREs, with the goal of providing the Departments with greater insight into IDRE performance and accountability across both eligibility and payment determinations. Increased oversight may help address persistent concerns, including the significant volume of ineligible claims entering the Federal IDR process.
Second, for payers identifying errors after an IDR dispute has closed, the CMS June 2025 guidance remains in effect. This guidance allows parties to request reopening of disputes to correct clerical, jurisdictional, or procedural errors. The guidance outlines the process on how parties can request reopening of disputes that fall into those three categories. Although the process can be cumbersome, and many payers have not been afforded any new opportunity to challenge eligibility or clerical errors, we have seen some payers have success in utilizing this process.
Third, ongoing litigation continues to shape the Qualifying Payment Amount (QPA) methodology. On April 2, 2026, the Departments and the Office of Personnel Management released FAQ about Consolidated Appropriations Act, 2021 Implementation Part 73, extending the enforcement discretion for any plan or issuer, or party to a payment dispute in the Federal IDR process, that uses a QPA calculated in accordance with the 2021 methodology, for items and services furnished on or after February 1, 2026, and before October 1, 2026.
At the same time, the broader narrative around the Federal IDR process, including certain provider behavior within it, appears to be shifting. Recent reporting and litigation have drawn attention to potentially problematic practices by providers and their third-party intermediaries, including the submission of large volumes of ineligible disputes and offers in excess of standard charges. A recent analysis found that IDR payment determinations are on average 500-800% of Medicare, resulting in certain provider groups receiving payments that are on average up to four times higher than comparable out-of-network prices before the NSA. On May 13, 2026, the Coalition Against Surprise Medical Billing launched a massive ad campaign in the Washington area targeting private equity-backed providers who the group says are “abusing” a surprise billing law to secure higher payments from health plans, employers and consumers. Payers have begun to turn to the courts to sue providers regarding their alleged fraudulent IDR behavior. These complaints allege that some providers and their representatives are exploiting the system by overwhelming both payers and IDREs, obtaining default awards because payers did not receive sufficient notice to participate in the IDR process, and submitting “offers” of significantly higher reimbursements than billed charges. These claims include allegations of fraud, misrepresentation, and violations of state and federal law. And, they are made with the backdrop of IDREs overwhelmingly selecting provider offers (often times regardless of the factual circumstances under which the care was delivered).
Recent court decisions have added another layer of complexity. In April, two courts dismissed payers’ claims and concluded that payers cannot challenge IDR awards or related conduct through the courts, directing parties instead to rely on the administrative processes within the IDR system. This mirrors earlier rulings limiting providers’ ability to enforce IDR outcomes judicially. Appeals are pending, and similar cases remain active across the country.
Taken together, all of these recent developments underscore a central reality – while the NSA has succeeded in shielding patients from balance billing for NSA-covered claims, the system operating behind the scenes remains under significant strain and, contrary to congressional intent, is driving up health care costs and creating unintended incentives for certain provider types to remain, or otherwise become, an out-of-network provider. Regulators are aware of these issues and are considering additional actions to address them, but meaningful resolution will likely require additional oversight, rulemaking, and potentially further clarification by the courts.
For payers, actions that can be taken now are relatively limited, but include close monitoring of trends in IDR awards, thorough documentation of offers in the IDR process, and active engagement with regulators, all of which will remain essential as the next chapter of NSA implementation unfolds.
We continue to monitor developments related to the NSA and Federal IDR process. Please reach out to your Groom contact if you have any questions or would like our assistance.
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