Important Federal IDR Operational Updates Continue to Be Implemented This Month

The federal independent dispute resolution (IDR) process continues to undergo major changes that can significantly impact the operations, business strategy and financial performance of key stakeholders. On June 4, 2026, the U.S. Departments of Labor, Health and Human Services, and the Treasury (the Departments), together with the Office of Personnel Management (OPM), published the IDR Operations Final Rule in the Federal Register (the Final Rule). The Final Rule aimed to improve the Federal IDR process by simplifying communication among payers and providers (disputing parties) and certified IDR entities and setting new timelines and procedures.

Several major provisions took effect at the start of this month and will continue through fall and winter, with further policy updates expected in 2027.

Key Takeaways

• New Batching Rules Are Now in Effect: The new batching and bundling provisions of the IDR Operations Final Rule now apply to disputes whose open negotiation periods begin on or after November 1, 2026.
• The IDR Gateway Is Going Live: The Departments are putting many of the final rule's process improvements into practice through the new IDR Gateway, launched on November 1, 2026. Beginning November 13, 2026, organizations with Gateway accounts can submit key IDR web forms there. After January 15, 2027, web forms will no longer be available outside the Gateway (except the resubmission form).
• CARC/RARC Requirements Start January 1, 2027: Payers must use the specified claim adjustment reason codes (CARCs) and remittance advice remark codes (RARCs) for items and services furnished on or after that date.
• More Changes Are Coming in 2027: The Departments expect to roll out additional IDR Gateway functionality in 2027.

Key Dates

Batching Changes Now in Effect

Batching rules help reduce some of the administrative burden of the IDR process by determining whether related claims can be resolved together in a single dispute or must be submitted separately. The new requirements apply to disputes with open negotiation periods beginning on or after November 1, 2026. The Departments' and OPM's guidance implementing the final rule's batching changes covers the "similar condition" requirement, the revised cooling-off periods for batched disputes and how they may "stack," how batched and bundled items and services are treated, and the definition of a bundled payment arrangement.

Under the revised framework, items and services at issue in a dispute may be batched only if they meet all four of these requirements:

1. Same Provider or Facility. All items or services must be billed by the same provider, provider group, facility or air ambulance provider, as identified by the same National Provider Identifier or Taxpayer Identification Number.
2. Same Payer. For self-insured plans, the claims must be payable by the same self-insured plan; using the same third-party administrator (TPA) is not enough. For fully insured coverage, claims may be batched when the same issuer is responsible for payment, even if the claims arise under different group or individual coverage offered by that issuer.
3. "Similar Condition." The items or services must be tied to a similar condition, which can be shown through any one of three pathways: 1) a single-patient encounter (items or services furnished to one patient on the same day or on consecutive days and billed on the same claim), 2) the same or comparable service code for one or more patients, or 3) a specialty CPT-range pathway, available for anesthesiology, radiology, pathology and laboratory services whose codes fall within the same Category I CPT code range specified in the guidance. There is no specialty CPT-range pathway for emergency medicine.
4. Timing. In general, all services in the batch must have been furnished within a 30-business-day period, counted from the date of the first service in the batch. An exception applies to items or services for which a dispute could not be initiated because they were subject to a cooling-off period.

Each batch is limited to 50 line items. Service-code modifiers do not count toward the limit, nor do anesthesia qualifying-circumstance add-on codes that function as modifiers. Traditional CPT add-on codes, however, are treated as separate dispute line items and do count.

One of the guidance's most significant clarifications is how batching interacts with the "cooling-off" period and how multiple cooling-off periods may "stack" for batched disputes. By law, after a payment determination is made, the party that initiated the Federal IDR process must wait 90 calendar days before submitting a new Notice of IDR Initiation against the same opposing party for the same or a similar item or service. The IDR Operations Final Rule shortened this cooling-off period for batched disputes from 90 calendar days to 30 business days. The cooling-off period for single disputes remains 90 calendar days.

The guidance sets out these general rules for cooling-off periods:

• Each payment determination starts its own cooling-off period. When separate disputes involving the same service code receive payment determinations at different times, several cooling-off periods can therefore run at once. The guidance expressly states that cooling-off periods may overlap or "stack," meaning a second period can begin before the first one ends.
• When cooling-off periods overlap, a party must wait until the last one expires before initiating a new dispute with the same opposing party involving the same item or service. The guidance includes several examples showing how this works in practice.
• Certified IDR entities must find a dispute ineligible for the Federal IDR process if it is subject to an active cooling-off period, citing the reason as "cooling off period not completed."

Providers that rely on batching to submit a higher volume of similar disputes to IDR have expressed concern that stacked cooling-off periods will likely prevent them from submitting new disputes for an even longer duration, until the last cooling-off period expires. This outcome is partly due to the backlog of disputes, which has caused some payment determinations to be issued after the 30-day statutory time frame. Although the backlog and timeliness of payment determinations have improved, the Gateway's new system validation of stacked cooling-off periods, based on this recently issued guidance, is likely to significantly affect many providers' ability to timely submit disputes to IDR during overlapping cooling-off periods.

IDR Gateway Implementation

This month, the Federal IDR process begins moving from stand-alone web forms to the IDR Gateway, a centralized online platform for managing disputes. Starting November 13, 2026, organizations with Gateway accounts can file the "Notice of IDR Initiation," "Notice of IDR Initiation Response," "Notice of Certified IDR Entity Selection" and "Notice of Offer" forms directly in the Gateway. Account holders can also view reports and dispute records for disputes started in the Gateway, as well as for disputes started outside it that were matched to their organization through dispute mapping.

Through the Gateway, users will be able to:

• initiate disputes and respond to them
• view dashboards and reports covering their organization's disputes
• follow dispute details, including disputes that have been assigned to a certified IDR entity
• see where each assigned dispute stands in the process
• receive notifications about dispute activity

The Gateway also adds security safeguards, including identity verification and access controls that limit use of the Federal IDR process to users located in the U.S. Only verified users may create accounts and sign in to the Gateway, but they may use automation to support parts of the process. Users are responsible for updating their automated workflows as Gateway features change.

Who Needs to Sign Up

Any organization or individual that processes disputes, represents a party to a dispute or submits IDR web forms must create a Gateway account to use the new features. A party that relies on a TPA or another organization to handle its disputes does not need its own account but should confirm that the organization acting on its behalf has one.

For now, parties and their representatives may still submit web forms without signing in to the Gateway. After January 15, 2027, web forms will no longer be available outside the Gateway, with one exception: the "Notice of IDR Initiation – Resubmission" form.

From November 13 through January 15, 2027, disputing parties can switch between the stand-alone web forms and the Gateway as needed. This is a testing period, and parties should document any issues they encounter and report them to the Departments. For questions or help, email IDRGatewayHelp@cms.hhs.gov or call 800.985.3059. The Centers for Medicare & Medicaid Services (CMS) has already published several resources on the Gateway, held listening sessions and office hours, and plans to hold additional webinars during the transition.

Additional details are available on the CMS IDR Gateway page.

Additional Gateway Functionality Expected in Spring 2027

The Departments will add Gateway functions on a rolling basis to implement the remaining provisions of the Final Rule and announce each new function to the public and disputing parties before it launches. According to a timeline issued by the Departments, rollout is expected to begin in spring 2027 and will proceed in the order below, which reflects how complex each function is to build and how much it is expected to affect the IDR process:

1. IDR Registry. Payers must register by the later of 1) 90 business days after the Departments announce that the registry is available or 2) the date the plan or issuer begins offering coverage subject to the Federal IDR process.
2. Suspension of Resubmissions of Incorrectly Batched or Bundled Disputes. Takes effect 120 days after the 90-business-day IDR Registry registration period ends.
3. Open Negotiation
4. Initiation
5. Certified IDR Entity Selection
6. Withdrawal Requests Submitted Through the IDR Gateway
7. Extensions

The provisions on open negotiation, initiation, certified IDR entity selection, remaining withdrawals and extensions (items 3 through 7 above) will apply 90 calendar days after the Departments announce that the supporting functionality is available. Although these changes are still some time away, stakeholders should begin operational and contingency planning now. For example, it is important to decide how best to submit disputes based on a plan or issuer's own registration in the IDR Registry or how to ensure batched and bundled disputes are submitted correctly the first time if future attempts to resubmit disputes are limited.

CARC and RARC Requirements Begin January 1, 2027

For items and services furnished on or after January 1, 2027, payers must include CARCs and RARCs on the paper and electronic remittance advice they send to out-of-network providers and facilities. These codes signal whether an item or service is subject to the No Surprises Act's surprise billing protections and Federal IDR process.

Guidance issued on July 17, 2026, identifies which RARCs to use, when each one applies and how to implement them technically. The Departments also state in the guidance what happens if a plan or issuer fails to comply with the CARC and RARC requirements. In that case, providers, facilities, and air ambulance providers retain the right to initiate the open negotiation period within 30 days of receiving the initial payment or notice of denial of payment for otherwise qualified IDR items and services. Alternatively, if the plan or issuer's failure leaves a provider, facility or air ambulance provider without the information needed to initiate the 30-business-day open negotiation period, that provider or facility may request an extension due to extenuating circumstances by emailing FederalIDRQuestions@cms.hhs.gov. Finally, the Departments have indicated that they will revise the guidance as needed.

Other Final Rule Provisions Already in Effect

• Lower Administrative Fee (June 11, 2026): For disputes initiated on or after June 11, 2026, the administrative fee fell from $115 to $15 per party per dispute.
• Provisions Effective August 3, 2026: The following took effect on the final rule's effective date: the definition of a bundled payment arrangement, new requirements for the QPA information payers must provide with the initial payment or notice of denial, certified IDR entity procedures for retaining the certified IDR entity fee, and clarifications of existing policies on failing to pay fees on time and on how the certified IDR entity fee is allocated after a payment determination, agreement or withdrawal.

Congressional Scrutiny of IDR Continues

These operational changes come amid intensified scrutiny of IDR by the U.S. Congress. Lawmakers are examining the volume, cost and outcomes of disputes filed under the No Surprises Act and considering possible legislative reforms. As discussed in a previous Holland & Knight alert, U.S. House of Representatives Committee on Energy and Commerce Ranking Member Frank Pallone Jr. (D-N.J.) has introduced the Lower Premiums, Faster Payments Act. The bill would effectively end the IDR process for items and services furnished on or after January 1, 2028, and establish a recalculated QPA as the out-of-network payment rate. Rep. Pallone also sent oversight letters to six of the 17 certified IDR entities (IDREs) requesting information on dispute volumes and eligibility determinations, arbitrator training and oversight, the use of artificial intelligence and automation, appeals and quality-control procedures, top filers and their success rates, ownership structures, and potential financial relationships between IDREs and the parties appearing before them. Responses were due September 24, 2026.

In addition, on November 2, 2026, Rep. Pallone and Committee Chairman Brett Guthrie (R-Ky.) sent a letter to the Congressional Budget Office requesting an analysis of the IDR process' overall effects on private health insurance premiums and federal deficits over the next 10 years, including its direct costs and indirect effects on negotiated in-network rates. The letter states that the IDR process has not been functioning as Congress intended and appears to be adding significant costs to healthcare system. Reps. Pallone and Guthrie argue that Congress must fully understand the No Surprises Act's impact before considering whether to reform or modify the law. The U.S. Senate Committee on Health, Education, Labor and Pensions and House Committee on Ways and Means are also considering legislative changes that would retain arbitration while addressing issues such as outlier payment awards, ineligible disputes and non-payment of awards. Stakeholders should continue to monitor these legislative developments alongside the operational changes described above.

What Stakeholders Should Do Now

• Sign up for the IDR Gateway or confirm that your TPA or dispute-processing vendor has done so ahead of the January 15, 2027, cutoff for web forms outside the Gateway. Note that Gateway access is tied to individual users, who must provide personal credentials such as a Social Security number.
• Review batching practices for disputes with open negotiation periods beginning on or after November 1, 2026, paying particular attention to the same-payer, "similar condition," timing and 50-line-item requirements, as well as implications related to stacked cooling-off periods.
• Document any issues you encounter with the Gateway and report them to the Departments. CMS has addressed several operational questions and issues to date and should be receptive to feedback that can inform improvements as Gateway functionality continues to roll out.
• Prepare for the implementation of CARC/RARC requirements, which apply to items and services furnished on or after January 1, 2027. Although CARCs and RARCs are intended to help facilitate eligibility determinations, the rollout of these requirements may uncover gaps in the coding of items and services that stakeholders believe should be subject to IDR.
• Watch for Departmental announcements about new Gateway functionality. These announcements will start the clock on the IDR Registry deadline and the effective dates of the remaining process changes.

For more information or questions, please contact the authors.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.