We have some important updates to share regarding changes to the Independent Dispute Resolution (IDR) process at both the federal and New York State levels. The good news? The federal changes are largely positive and should make the dispute process smoother and more efficient for providers. The more significant changes — and the ones requiring the most attention — are specific to New York State. If your practice is located outside of New York, you can read the federal section with confidence that things are moving in the right direction, and very little will change in your day-to-day operations.
Federal IDR Updates — Applies to ALL Providers
On May 28, 2026, CMS released a Final Rule updating the Federal IDR process under the No Surprises Act. We view these changes as a win for providers. The federal government has listened to the pain points in the current system and made meaningful improvements. Here is what is changing:
• Clearer Communication from Payers: Payers are now required to use standardized Claim Adjustment Reason Codes (CARCs) and Remittance Advice Remark Codes (RARCs) on all remittance advice. This means less guesswork on your end about whether a claim qualifies for the IDR process — the payer has to tell you upfront.
• More Defined Open Negotiation Timelines: The 30-business-day open negotiation period now has a clear, documented start date tied to portal submission, and payers must formally respond by day 15. This gives providers much stronger footing and accountability in the negotiation process.
• Smarter Batching Rules: The new rules provide clearer, more flexible guidelines for grouping multiple claims into a single dispute, which helps reduce costs and administrative burden. Disputes may now be batched under three defined scenarios:
1. Same Patient, Same or Consecutive Dates of Service: Items and services furnished to a single patient on the same or consecutive dates of service and billed on the same claim form may be batched together as a single patient encounter.
2. Same Service Code Across Patients: Items and services billed under the same service code — or a comparable code under a different procedural code system (e.g., CPT and HCPCS) — may be batched together regardless of the number of patients.
3. Specialty-Specific Groupings: Anesthesiology, radiology, pathology, and laboratory services billed under service codes belonging to the same Category I CPT code section may be batched together, recognizing the unique billing patterns of these specialties.
All batched disputes are capped at 50 line items per submission to ensure timely processing by certified IDR entities.
• Faster Eligibility Decisions: Certified IDR entities must now rule on dispute eligibility within 5 business days of selection. Less waiting, faster resolution — and no more post-determination appeals of eligibility!
• Lower Administrative Fee: The fee drops from $115 to just $15 per party per dispute, effective within 5 business days of the rule’s publication.
• New Payer Registry: Payers must now register with the federal government and receive an ID number, making it significantly easier to identify the right payer and plan when filing a dispute.
Bottom Line for Out-of-State Providers
These are process improvements that work in your favor — nothing changes in your day-to-day operations or your claims eligibilities. We are hopeful these changes will have a positive impact and help with determination payment turnaround from payers.
New York State IDR Changes — Applies to NY Providers Only
IMPORTANT: The following changes are specific to New York State and do not affect providers practicing outside of New York.
The NYS SFY 2026-27 Budget, signed by Governor Hochul, has introduced significant and far-reaching restrictions to the New York State IDR process. These changes were made over the strong opposition of physician advocacy groups across the state and represent a serious setback for providers who have relied on IDR as a key tool for resolving out-of-network payment disputes. We want to be straightforward with you: there is considerable uncertainty about how these changes will play out in practice, and we are monitoring the situation closely as further legal and regulatory developments unfold.
• Commercial Plan IDR — No Change (Good News): The existing IDR framework for commercial insurance disputes is preserved. Arbitrators will continue to consider all relevant factors, including the provider’s usual charge, usual and customary costs, and gross disparity factors. This was a hard-fought win.
• Medicaid Managed Care — Removed from IDR (Effective Immediately): Out-of-network disputes involving Medicaid Managed Care enrollees are no longer eligible for IDR in New York State. This takes effect upon the Governor’s signing of the budget.
• NYSHIP/State Employee Plans — Now Subject to IDR, But Under a New Standard (Effective 90 Days After Signing): NYSHIP disputes are now brought into IDR, but awards will be benchmarked to the 50th-percentile “allowed amount,” with a hard cap at the 80th percentile. This provision has a five-year sunset. NYSHIP reimbursements will likely be significantly lower under this new benchmark standard.
• New IDR Exclusions — Regardless of Insurance Type: IDR will not be available in two new scenarios:
1. The health plan demonstrates it has a contract with the provider (or a related entity) covering the same services at the same location.
2. The health plan issued a prior authorization notice that clearly identified the disputed services as out-of-network.
What This Means for Your Practice
For our New York State clients, we want to be transparent: the path forward under the revised NYS IDR framework is genuinely unclear at this time. The budget changes introduced by Governor Hochul have created significant uncertainty for all providers who have utilized the IDR process, and there are no established best practices yet for navigating the new landscape. We will continue to do everything possible to optimize your IDR submissions as we have been doing, and we will keep you updated as we gather more information and as legal and regulatory guidance develops.
What we know now:
• Medicaid Managed Care disputes are no longer eligible for IDR as of the budget signing.
• NYSHIP reimbursements will likely be significantly lower under the new benchmark standard.
• The prior authorization exclusion is one of the most uncertain aspects of the new law. It is not yet clear how insurers will apply this provision in practice, and there is currently no established standard for how providers should respond. We will be watching this closely and will update you as more information becomes available.
This is a bulletin to keep you informed of these developments as they have been announced. As the situation evolves and further regulatory guidance is issued, we will continue to provide updates. We appreciate your trust in us and remain committed to advocating for your best interests and keeping you as informed as possible during this period of uncertainty.
