ModifiedMedicarePolicy N/A

Federal Independent Dispute Resolution (IDR) operations under the No Surprises Act

Final rules establishing operational requirements for the Federal IDR process, disclosure and remittance advice requirements, registration and process amendments, affecting group health plans, health insurance issuers, nonparticipating providers/facilities, and FEHB carriers.

Policy Summary

PayerMedicare

PolicyFederal Independent Dispute Resolution (IDR) operations under the No Surprises Act

Policy CodePolicy N/A

Change TypeOperational & procedural amendments

Effective DateN/A

Next Review DateN/A

Key ActionSubmit open negotiation, response, and IDR initiation notices and supporting documentation through the Federal IDR portal using standard forms.

SourceLink

POLICY UPDATE CHANGES

Final rules require plans and issuers to include specified disclosure information with initial payments or notices of denial and to use CARCs and RARCs when providing remittance advice to entities without a contractual relationship.

Requirements finalizing amendments to open negotiation, initiation, eligibility review, fee payment/collection, bundled payment arrangements, batching, and extensions for extenuating circumstances in the Federal IDR process.

Plans and issuers will be required to register in the Federal IDR portal to aid party identification and applicability determinations.

The Departments are finalizing a codified definition of 'bundled payment arrangement' applicable to the Federal IDR process.

Finalized requirement that plans and issuers use specified CARCs and RARCs on remittance advices to convey No Surprises Act-related information and improve identification of eligible disputes.

Open negotiation notices, responses, and IDR initiation notices must be furnished through the Federal IDR portal using standard forms; 30-business-day open negotiation period begins on submission of the notice and required remittance advice.

Require the open negotiation notice to include a copy of any remittance advice associated with the initial payment or notice of denial of payment for the item or service.

Non-initiating parties must provide a written notice and supporting documentation in response to the notice of IDR initiation within 3 business days after IDR initiation, including eligibility objections and objection to preferred certified IDR entity selection.

Certified IDR entities are given 5 business days after final selection to determine whether the item/service is a 'qualified IDR item or service'; if found ineligible the dispute is closed.

Final rules modify the line-item limit for batched disputes from the proposed 25 items to a 50 line-item cap and refine batching criteria.

Trek Health ingests and normalizes Transparency in Coverage data and payer policy updates to give provider organizations a clear view of how commercial reimbursement behaves across markets, payers, and services. Our platform transforms raw payer disclosures into structured intelligence that supports contract evaluation, payer negotiations, and service line strategy. By combining market benchmarks with ongoing policy visibility, Trek helps teams identify variability, risk, and opportunity in commercial reimbursement. The result is faster insight, stronger negotiating positions, and more informed financial decisions.

>5.1Mdisputes submitted to Federal IDR as of Jan 31, 2026

489Kdisputes submitted in first year

976,721disputes challenged for eligibility (2022–24)

355,804disputes found ineligible (2022–24)

50finalized batched line-item cap

portalrequired submission channel

Eligibility, Notices, and Operational Criteria

inv-01: Eligibility and procedural criteria (excerpt)

Eligibility and procedural criteria emphasized in the final rules and preamble (excerpt):

A dispute is eligible for Federal IDR only if it concerns a qualified IDR item or service and is not payable by coverage excluded from surprise billing protections (for example, Medicare or Medicaid) or governed by a specified State law or an All-Payer Model Agreement.

Parties must satisfy the 30-business-day open negotiation period and may not initiate Federal IDR until the open negotiation requirements and timing rules are met (including the statutory wait after open negotiation where applicable).

Batched or bundled disputes must comply with applicable regulatory rules for batching and bundling; incorrect batching (for example, mixing items paid by different plans or issuers) or improperly identified bundles makes disputes ineligible.

Non-initiating parties may contest eligibility in their notice of IDR initiation response and may submit supporting documentation and attestations (including plan type) to enable earlier eligibility assessment.

Plans and issuers must provide specified disclosure information and include No Surprises Act–specific CARCs/RARCs on remittance advices sent to entities without a contractual relationship; plans and issuers must register in the Federal IDR portal/registry as required.

Certified IDR entity fees, adjudication, and administrative processes are governed by the finalized IDR operational rules and separate fee guidance; certified IDR entities continue to perform eligibility review and may close disputes found ineligible.

inv-02: CARC/RARC remittance requirements and applicability

Remittance advice communication requirements to reduce submission of ineligible disputes and improve early identification of eligibility:

Plans and issuers must use specified CARCs and RARCs on remittance advices (including ERA/ASC X12 835) when sending remittance advice to entities with which they do not have a direct or indirect contractual relationship, to convey No Surprises Act applicability and related information.

This CARC/RARC requirement applies to paper and electronic remittance advice provided to such non‑contracted entities; future Department guidance will specify the exact CARCs/RARCs and implementation timing.

A CARC or RARC indicating ineligibility is not dispositive of Federal IDR eligibility; certified IDR entities retain authority to determine eligibility during eligibility review.

inv-03: Bundled payment arrangement criteria

Bundling eligibility and submission criteria:

A dispute may be submitted as a bundled payment arrangement when multiple services for a single patient are billed or paid under a single service code that represents multiple items or services (for example, a CPT, HCPCS, or DRG code).

Bundled payment arrangements are distinct from batched disputes and are subject to their own requirements; not all batching rules apply to bundles.

Bundling is not limited to Medicare definitions or to situations where provider and plan mutually agree; Departments adopt broader criteria to allow single CPT/HCPCS/DRG codes to constitute bundling when definition conditions are met.

Example: If services are billed under a single CPT code representing multiple services (for example, bilateral mammography billed as CPT 77066), the services represented by separate unilateral CPT codes billed under that single code may be treated as a bundled payment arrangement.

inv-04: CARC/RARC inclusion

Disclosure requirement for CARCs and RARCs

Plans and issuers must include specified CARCs and RARCs on remittance advices sent to entities without a direct or indirect contractual relationship to communicate whether the No Surprises Act applies and related applicability details.

Departments will issue guidance identifying specific CARCs/RARCs and when a code can satisfy separate disclosure requirements; plans/issuers need not implement until guided applicability dates.

inv-05: QPA disclosure

QPA-related disclosure triggers

Plans and issuers must disclose the QPA and related information with each initial payment or notice of denial when the recognized amount is the QPA, and in specified situations when the billed amount determines cost sharing (including for air ambulance and select emergency/non‑emergency cases where billed amount is used).

Disclosure elements include QPA and additional identification (legal business name, plan sponsor where applicable) and registration number as required by the Federal IDR registry rules.

inv-06: QPA disclosure and open negotiation/IDR initiation criteria

Disclosure and process requirements that apply when an item or service may be eligible for Federal IDR or when initiating open negotiation/IDR.

Plans/issuers must disclose QPA and related information with each initial payment or notice of denial; for provider‑initiated notices QPA is required only if it was provided with the initial payment/denial.

Parties must exchange open negotiation notices and responses via the Federal IDR portal using standard forms; parties must exhaust the 30-business-day open negotiation period before initiating Federal IDR.

The party receiving an open negotiation notice must furnish an open negotiation response notice through the portal by the 15th business day of the 30-business-day open negotiation period (business days exclude weekends and Federal holidays).

Plans/issuers and certain plans (self‑insured group health plans, FEHB carriers, issuers) must register with the Federal IDR Registry within the required timeframe (e.g., before 90 business days after registry availability or when plan becomes subject to registration) and include registration number in disclosures when required.

inv-07: Open negotiation notice & response criteria

Required elements and expectations for open negotiation notices and responses.

Open negotiation notice must include identifying information for the provider/facility/air ambulance (name, contact, legal business name, NPI) and for the plan/issuer (registration number if available or attestation that registration number not provided on remittance advice; legal business name of plan or plan sponsor where applicable; contact info).

Open negotiation notice must include item/service identifiers sufficient to identify the item or service (dates furnished, claim number, service code, place of service or bill type, state, service type and whether professional or facility), and the date provider received initial payment/denial when provider submits notice.

Open negotiation notice must include initial payment amount (including $0 if denied), the QPA if provided with initial payment or denial, an offer of an out-of-network rate, and cost‑sharing amount if submitted by a plan/issuer; it must include a copy of any remittance advice associated with the initial payment/denial.

The party in receipt must provide an open negotiation response notice through the Federal IDR portal within 15 business days; failure to timely furnish the response does not extend the open negotiation period or delay initiation of Federal IDR.

inv-08: Open negotiation notice and response required elements

Required content elements for open negotiation notices and response notices are finalized as follows.

Provider identification: name, current contact info, legal business name, and NPI (required).

Plan/issuer identification: registration number as required or attestation that registration number was not provided on remittance advice; legal business name of plan or plan sponsor where applicable; contact info; plan type if submitting party is plan/issuer (required).

Third‑party representative: name, contact info, and attestation of authority (required).

Item/service identifiers: dates of service, claim number, service code, place of service or bill type, state, service type; if provider submitting, date of receipt of initial payment/denial (required).

Payment details: initial payment amount (including $0) and QPA if provided with initial payment/denial; responding plan/issuer must confirm or provide QPA with supporting documentation (required).

inv-09: Open negotiation and IDR initiation required elements

Required content elements

Provider/facility identification and contact info including legal business name and NPI (required).

Plan/issuer identification including registration number or attestation, legal business name or plan sponsor name, contact info, and plan type if submitting party is plan/issuer (required).

Third‑party representative identification and attestation of authority (required).

Item/service identification (dates furnished, claim number, service code, place of service) and dates of initial payment/denial if provider (required).

Initial payment amount and qualifying payment amount where applicable (required).

inv-10: Notice of IDR initiation content criteria

Finalized required elements for a notice of IDR initiation include (but are not limited to):

Initiating party identification: information sufficient to identify provider/facility/air ambulance (name, contact, legal business name, email, phone, mailing address), NPI, and TIN when initiating party is a provider (required).

Plan/issuer identification: registration number as required or attestation that it was not provided on remittance advice; legal business name (or plan sponsor name for self‑insured plans without legal name); contact info; and if initiating party is plan/issuer, plan type and TIN (required).

Third‑party representative: name/contact/TIN and attestation of authority to act (required).

Identification whether dispute includes batched or bundled qualified IDR items or services (required).

Include QPA when it was provided with the initial payment or notice of denial; provider‑initiated notices require QPA only if included with the initial payment/denial (required when applicable).

inv-11: IDR notice and response criteria

Required content and timing for notices used to initiate and respond to Federal IDR:

A notice of IDR initiation must include: initiating party identification (legal business name, contact info, NPI, TIN if provider); service identifiers (date(s) of service, place of service, claim number, service code); payment info (initial payment amount including $0, QPA if available, and remittance advice copy); attestations that item/service is a qualified IDR item and basis for eligibility; and other required fields.

Non‑initiating party must submit a notice of IDR initiation response with required information to the initiating party and the Departments within 3 business days after IDR initiation (including any objection to preferred certified IDR entity and any eligibility objections).

Failure to timely furnish the IDR initiation response may limit the non‑initiating party's opportunities (for example, to contest entity selection or to assert eligibility objections early).

inv-12: Notice content criteria

Required contents of the notice of IDR initiation response (non-initiating party obligations):

Provider/facility/air ambulance identification: name, contact, NPI, and TIN if provider (required).

Plan/issuer identification: registration number or attestation, legal business name or plan sponsor name, contact info, plan type and TIN if plan (required).

Third‑party representative: name/contact/TIN and attestation of authority (required).

Identification of each disputed item/service with dates and claim number (and date provider received initial payment/denial if provider) (required).

If plan/issuer: If the non‑initiating party is a plan/issuer: state whether the initial payment and QPA are accurate and provide supporting documentation if not; include amount of cost sharing (if any).

inv-13: Submission and entity selection rules

Manner and timing for submission and certified IDR entity selection:

All open negotiation notices and notices of IDR initiation and responses must be furnished to the other party and the Departments via the Federal IDR portal (CMS‑9897‑F) using the standard forms developed by the Departments.

Non‑initiating party must provide the notice of IDR initiation response within 3 business days after IDR initiation; parties then have 3 business days after initiation to jointly select a certified IDR entity.

If parties fail to jointly select a certified IDR entity by the end of the third business day after initiation (per the finalized definition of failure to jointly select), the Departments will select a certified IDR entity and notify parties no later than 6 business days after IDR initiation; limited alternate timelines apply when notices are submitted on the third business day to avoid default joint selection gaming.

inv-14: Certified IDR Entity Selection Criteria

Procedural criteria governing selection and finalization of certified IDR entities for Federal IDR disputes.

Parties must attempt to jointly select a certified IDR entity within 3 business days after IDR initiation; if non‑initiating party agrees or fails to object within that period, initiating party's preferred entity may be considered jointly selected.

If non‑initiating party objects within 3 business days and designates an alternative preferred certified IDR entity, the initiating party has opportunity to agree or object under specified timelines; special rules apply when notices are submitted on the third business day to avoid inadvertent default selection.

If failure to jointly select: If parties fail to jointly select by the end of the third business day, the Departments will proceed to select a certified IDR entity and notify parties by the sixth business day after initiation; the Departments may provide additional limited days where notices are submitted on the third business day, and may randomly select an entity if needed.

Preliminarily selected certified IDR entities must attest within 3 business days that they meet conflict‑of‑interest requirements; if they do not or fail to respond, the Departments will randomly select and notify parties promptly (typically within 1 business day after conflict notice or end of attestation period).

inv-15: Operational criteria for IDR entity selection and eligibility review

Operational criteria and steps affecting certified IDR entity selection, eligibility determination, and information requests include:

Preliminary selection becomes final only after the preliminarily selected certified IDR entity attests within 3 business days that it meets conflict‑of‑interest requirements; upon attestation Departments notify parties and the date of final selection is the date of that notice.

Certified IDR entity must make and notify parties and the Departments of an eligibility determination no later than 5 business days after final selection; if the item/service is found ineligible, the dispute is closed.

Certified IDR entities may request additional information from disputing parties; parties are expected to submit requested information within 5 business days via the Federal IDR portal; timelines for the applicable stage are tolled while awaiting requested information; if necessary information is not received and adjudication cannot proceed, the dispute may be considered withdrawn, otherwise the certified IDR entity must proceed without the information when possible.

Departments considered but did not finalize a departmental eligibility review to make eligibility determinations during backlogs; certified IDR entities remain responsible for eligibility determinations.

inv-16: Federal IDR operational criteria

Operational criteria governing adjudication, withdrawal, and batching within the Federal IDR process:

If a certified IDR entity requests additional information and a party fails to respond within 5 business days, the certified IDR entity must proceed adjudicating the dispute without the requested information if possible while continuing due diligence; nonresponse is not treated as automatic confirmation of eligibility.

Provision of a withdrawal request through the Federal IDR portal pauses Federal IDR timelines for up to 5 business days or until the non‑initiating party responds; parties may withdraw under specified conditions and timeline tolling rules apply.

Batched disputes: up to 50 qualified IDR items/services may be batched into a single determination provided they meet batching criteria (same biller/NPI or TIN; paid by same plan or issuer with distinctions for fully insured vs self‑insured plans; relate to treatment of a similar condition; furnished within same 30‑business‑day period and meet open negotiation timing rules).

Disputing parties are responsible for providing correct contact information; lack of receipt when contact info provided by the party does not itself provide grounds for a good‑cause extension except in extenuating circumstances.

inv-17: Batching eligibility and operational criteria

Conditions under which multiple qualified IDR items and services may be batched into a single determination:

A batched dispute may include up to 50 qualified IDR line items (finalized line‑item cap).

Items/services included in a batch must have been furnished within the same 30‑business‑day period (counting from the first item/service in the batch) and satisfy the open negotiation timing requirements for batching as finalized.

Items/services in a batch must be billed by the same provider, group of providers, facility, or provider of air ambulance services (same NPI or TIN) and must be paid by the same group health plan or the same health insurance issuer per the finalized distinctions between fully insured and self‑insured plans.

Certified IDR entities retain existing fee structures; Departments will provide further guidance and examples for batch implementation.

inv-18: Batching eligibility criteria

Finalized batching criteria for qualified IDR items and services

Batched items/services may be submitted only when payment for those items/services is required to be made by the same group health plan or the same health insurance issuer; for fully‑insured coverage the same issuer may satisfy this requirement even across different insured group plans, while for self‑insured plans batching is limited to claims payable by the same self‑insured plan (TPAs may not substitute for the plan across different self‑insured plans).

Single patient encounter batching: Items/services furnished to a single patient during a single patient encounter and billed on the same claim form (single patient encounter defined as one or more consecutive days on the same claim form) are eligible to be batched.

Same or comparable service code batching: Items/services furnished to one or more patients and billed under the same service code or a comparable code under a different procedural coding system (for example, CPT vs HCPCS comparable codes) may be batched.

Category I CPT ranges:

Codes, Identifiers, and Transaction Standards

Remittance advice codesmixed

CARC / RARC

No Surprises Act-specific claim adjustment reason codes and remittance advice remark codes required on remittance advice to entities without contractual relationship.

Service code types for bundlingmixedCovered

CPT	Single CPT code may constitute a bundled payment arrangement (example: CPT 77066 for bilateral mammography).
DRG	DRG codes may represent bundled payment arrangements when a single service code represents multiple services.
HCPCS	HCPCS codes may be used to identify bundled payment arrangements.

No Surprises Act-related RARCs under considerationmixed

N871	Identifies initial payment calculated based on specified State law per No Surprises Act discussion
N859	Identifies a claim processed subject to the No Surprises Act and eligible for Federal dispute resolution
N883	Alert: Processed according to State law
N830	Existing vague RARC referencing Federal/State balance billing regulations (commenters recommended deactivation)

Transaction standardsmixed

No codes listed

Service identification elementsmixed

No codes listed

Identifiers required in noticemixed

NPI	National Provider Identifier to identify the provider as provided with the claim

Service identification elements (IDR initiation)mixed

No codes listed

Identifiers required in noticemixed

NPI	National Provider Identifier required in notice
TIN	Taxpayer Identification Number required for initiating providers and plans when applicable

Service identifiersmixed

Service code and claim number must be provided as part of notice of IDR initiation and response.

Eligibility timing referencesmixed

No codes listed

Batching criteria (non-coded descriptive group)mixed

Batched items must be billed by same provider/facility (same NPI or TIN), paid by same plan/issuer, relate to similar condition, and be furnished within the same 30-business-day period or meet open negotiation timing rules; bundled payment arrangements may be included per definitions and guidance.

service-code batching considerationsCPT

Category I CPT ranges (examples discussed)

Discussed in comments as potential grouping basis but no exception to line-item limit finalized.

Allowed batching code groupingsmixedCovered

same or comparable service code	Items/services billed under the same service code or comparable codes across coding systems (e.g., CPT with modifiers, HCPCS with modifiers, DRG with modifiers) may be batched.
Category I CPT ranges (Anesthesia/Radiology/Pathology/Lab)	Specified narrower Category I CPT code ranges (to be published in guidance and with technical corrections described) may be batched together for those specialties.
single patient encounter	Items/services furnished to a single patient during a single patient encounter and billed on the same claim form may be batched.

What Providers and Billers Must Do

Note

Pre-initiation information sharing and remittance disclosures

Before initiating the Federal IDR process, providers (or their authorized third‑party representatives) must ensure required information is shared via the Federal IDR portal and that remittance advice includes the No Surprises Act-specific claim adjustment reason codes (CARCs) and remittance advice remark codes (RARCs) as specified in Departments' guidance. When providing remittance advice to an entity with which a plan or issuer does not have a direct or indirect contractual relationship (regardless of paper or electronic format), the plan or issuer must include CARCs and RARCs in the manner and timeframe set forth in guidance. Providers must supply the remittance advice copy with open negotiation notices and with notices of IDR initiation when they are the initiating party.

Pre-initiation: share required information and remittance advice (including CARC/RARC) via the Federal IDR portal.
Remittance format: CARC/RARC requirement applies to paper and ERA; plan/issuer must include codes when remittance goes to non-contracted entities.
Include a copy of any remittance advice associated with the initial payment or denial when submitting an open negotiation notice or notice of IDR initiation.

Key Terms and Interpretations

Federal IDR process / qualified IDR item or service definition

DefinitionFederal IDR process: the No Surprises Act mechanism to resolve disputes between plans/issuers and nonparticipating providers/facilities (including air ambulance) over out-of-network payment amounts when State law or an All-Payer Model Agreement does not govern the method.

Qualified IDR item or serviceAn item or service eligible for resolution through the Federal IDR process; items/services governed by specified State laws or All‑Payer Model Agreements are ineligible.

ScopeApplies to disputes about initial payment amounts and notices of denial by plans/issuers for emergency, non‑emergency, and air ambulance services as set out in sections 9816/9817 (Code), 716/717 (ERISA), and 2799A‑1/2799A‑2 (PHS Act).

Bundled payment arrangement (definition)

DefinitionBundled payment arrangement: an arrangement where multiple items/services furnished to a single patient are billed under a single service code that represents multiple items/services (e.g., DRG) or where a plan/issuer makes or denies an initial payment under such a single service code.

Policy Summary

PayerMedicare

PolicyFederal Independent Dispute Resolution (IDR) operations under the No Surprises Act

Policy CodePolicy N/A

Change TypeOperational & procedural amendments

Effective DateN/A

Next Review DateN/A

Key ActionSubmit open negotiation, response, and IDR initiation notices and supporting documentation through the Federal IDR portal using standard forms.

SourceLink

On This Page

Offer: initiating notice must include an offer of an out‑of‑network rate for each item/service; responding party may provide counteroffers privately but is not required to submit counteroffers via the portal (required).

Remittance advice copy: a copy of any remittance advice associated with the initial payment or notice of denial must be included (required).

If submitting party is a plan/issuer, include amount of cost sharing imposed for the item/service (if any).

Statements regarding notice‑and‑consent exceptions and an attestation on eligibility for Federal IDR with supporting documentation for each disputed item/service (required).

Confirmation or copy of accurate remittance advice associated with the initial payment or notice of denial (required).

Include a copy of any remittance advice associated with the initial payment or notice of denial of payment for the item or service (required).

Attestation that the item/service is a qualified IDR item or service and basis for attestation (required).

Statements confirming nonparticipating status and notice‑and‑consent exception inapplicability where applicable (required).

If provider/facility: If the non‑initiating party is a provider/facility: statement regarding notice‑and‑consent exception applicability (if asserting it does not apply, provide documentation).

For each disputed item/service: either attest that it is a qualified IDR item or service eligible for Federal IDR or provide explanation and documentation if asserting ineligibility (required).

Confirm accuracy of remittance advice provided by initiating party or provide corrected remittance advice (required).

State whether non‑initiating party agrees or objects to initiating party's preferred certified IDR entity; if objecting, name an alternative preferred certified IDR entity and explain any conflict of interest (required).

Anesthesiology, radiology, pathology, and laboratory items/services billed under service codes belonging to specified Category I CPT code ranges (to be published in Department guidance with technical corrections) may be batched together.

TPAs may not batch claims payable by different self‑insured plans even if they administer those plans; departments will publish guidance detailing CPT code ranges, technical corrections, and batching instructions.

Billing Rule

Use of the Federal IDR portal for required notices

All notices initiating open negotiation, open negotiation responses, and notices related to IDR initiation and IDR initiation responses must be submitted through the Federal IDR portal using the standard forms the Departments develop. Parties are not required to submit duplicate notices through proprietary plan portals; the Federal IDR portal is the required mechanism for these specified notices.

Open negotiation notice and open negotiation response notice: portal-only submission required to the other party and the Departments.
Notice of IDR initiation and notice of IDR initiation response: portal-only submission as specified by the Departments' forms.
Parties should not be required to submit the same notice through proprietary plan/issuer portals.

Documentation Required

Provider identification and TIN requirement

To initiate open negotiation or IDR, providers must identify themselves with complete contact details and tax identifiers. If a provider is the initiating party for an IDR notice, the notice must include the provider's Taxpayer Identification Number (TIN) in addition to the name, mailing address, phone, email, and NPI. All notices (open negotiation, open negotiation response, notice of IDR initiation, and notice of IDR initiation response) must include provider identification consistent with claim submission.

Provider identification: legal business name, email, phone, mailing address, and NPI.
Provider TIN: required in a notice of IDR initiation when the initiating party is a provider, facility, or air ambulance provider.
Use the same contact information as provided on the claim form.

Documentation Required

Third‑party representative authorization and identification

When a third party (e.g., billing agent, law firm, TPA acting with authorization) submits notices on a provider's behalf, the notice must include the third party's legal name, contact information, TIN (where required), and a clear attestation that the third party has authority to act for the party in open negotiation or the Federal IDR process. Providers relying on representatives must ensure appropriate attestations accompany submissions.

Third-party contact info: legal business name, email, phone, mailing address, and TIN when required.
Attestation: statement that the third party has authority to act on behalf of the provider or plan for open negotiation or Federal IDR.
Include representative details on both open negotiation notices and IDR initiation/response notices.

Prior Authorization

Exhaustion of open negotiation prior to IDR initiation

Providers must exhaust the 30-business-day open negotiation period before initiating the Federal IDR process. The open negotiation period begins on the day the initiating party first submits the open negotiation notice (including the required remittance advice documentation) to the other party and the Departments via the Federal IDR portal. An initiating party that did not receive required remittance disclosures from a plan or issuer retains the right to initiate open negotiation within 30 business days of receiving the initial payment or notice of denial.

30-business-day exhaustion: cannot initiate IDR before the end of the open negotiation period.
Open negotiation start date: the date the open negotiation notice (with remittance advice) is first submitted to the other party and the Departments.
Exception: if remittance disclosures were not received due to plan noncompliance, provider may initiate open negotiation within 30 business days of receipt of the payment or denial.

Documentation Required

Open negotiation response notice content and timing for providers

Providers receiving an open negotiation notice must submit an open negotiation response notice within 15 business days through the Federal IDR portal. For provider-submitted response notices, required elements include provider identification (name, contact, NPI), dates the item/service was furnished, dates the provider received the initial payment or notice of denial (if provider), the claim number, attestation that the notice-and-consent exception does not apply (when applicable), statements as to whether each item/service is subject to the Federal IDR process or why it is not, and confirmation regarding the accuracy of the remittance advice provided. The Departments are not finalizing a requirement to include counteroffers in the portal response; parties may exchange counteroffers outside the portal if they choose.

Deadline: 15 business days to respond to an open negotiation notice.
Provider response content: identification, claim/service dates, date provider received initial payment or denial, claim number, attestation re: notice-and-consent exception, eligibility statements for each item/service, and remittance accuracy confirmation.
Counteroffers: not required to be submitted via the portal; optional and may occur off-portal.

Denial Risk

Notice of IDR initiation response requirements for providers (non‑initiating party)

When a notice of IDR initiation is submitted, the non-initiating party (including providers when they are non-initiating) must submit a notice of IDR initiation response via the Federal IDR portal within 3 business days of IDR initiation. Required response elements include full party identification (including TIN where applicable), third-party representative identification and attestation (if applicable), identification for each item/service and claim numbers, attestations or documentation as to whether each item/service is a qualified IDR item or service, confirmation or corrected remittance advice, statements regarding accuracy of initial payment and QPA (if plan/issuer), cost-sharing amounts (if plan/issuer), notice-and-consent exception attestation (if provider), and agreement or objection to the initiating party's preferred certified IDR entity (with an alternative selection and conflict explanation if objecting). Failure to furnish a timely response limits certain procedural rights (for example, selecting an alternative certified IDR entity) and may forfeit the ability to assert some positions early in the process.

3-business-day deadline: non-initiating party must respond within 3 business days after IDR initiation.
Response must include: identifying info (name, contact, NPI, TIN where applicable), third-party rep info and attestation, item/service identification and claim numbers, attestations on eligibility, remittance accuracy or corrected remittance, plan/issuer statements on initial payment/QPA and cost sharing, provider attestations re: notice-and-consent exception.
Certified IDR entity preference: state agreement or objection; if objecting, provide alternative entity and explain any conflict of interest.

Relation to batchingBundled payment arrangements are distinct from batched disputes; not all batching requirements apply to bundled arrangements.

ExamplesMay include instances where a single CPT/HCPCS/DRG code represents multiple component services (Departments finalized definition codified at 26 CFR 54.9816‑3, 29 CFR 2590.716‑3, and 45 CFR 149.30).

bundled payment arrangement (alternative phrasing)

Plain‑language restatementA bundled payment arrangement is when a provider/facility bills multiple services for one patient using a single service code that represents multiple services, or when a plan makes a bundled initial payment or denial under such a code.

Treatment in IDRSuch disputes may be submitted as a single bundled dispute but are not automatically subject to every batching rule; Departments clarified distinctions in final rules.

Regulatory citationFinalized at 26 CFR 54.9816‑3, 29 CFR 2590.716‑3, and 45 CFR 149.30 as adopted in the preamble and rule text.

ERA / ASC X12 835 (electronic remittance advice)

DefinitionERA / ASC X12 835: the electronic remittance advice transaction standard (ASC X12 835) used to electronically transmit remittance advice and that mandates use of CARCs and RARCs.

FunctionExplains claim adjudication and adjustments; CARCs describe why a line was adjusted and RARCs provide supplemental or informational explanations.

Standards sourceASC X12 835 implementation guide adopted at 45 CFR 162.1602; ERAs must comply with that standard.

CARC / RARC (definition)

DefinitionCARC / RARC: Claim Adjustment Reason Codes (CARCs) and Remittance Advice Remark Codes (RARCs) are standardized codes used on remittance advice to explain adjudication adjustments and provide supplemental remittance details; specific No Surprises Act‑related RARCs exist to convey applicability and processing information.

PurposeEnable plans/issuers to communicate why amounts differ from billed charges and to flag No Surprises Act applicability or state‑law processing.

MaintenanceApproved code lists and combinations are maintained and updated periodically by designated committees (CARC and RARC Committees).

remittance advice (definition — paper or electronic communications)

DefinitionRemittance advice: any paper or electronic communication accompanying payment (or notice of denial) for items and services provided to an entity that does not have a direct or indirect contractual relationship with the plan or issuer; includes ERAs (835) and paper remittance formats.

ApplicabilityRequirement to include certain CARCs/RARCs on remittance advice applies only when remittance is sent to entities without a contractual relationship and does not apply to remittance information sent directly to participants, beneficiaries, or enrollees.

Use in processA copy of any remittance advice associated with the initial payment or notice of denial must be included with open negotiation and IDR initiation materials where required.

QPA (definition and when recognized amount equals QPA disclosure applies)

DefinitionQPA (Qualified Payment Amount): the amount used under the QPA methodology; when the recognized amount equals the QPA, plans/issuers must provide specified QPA disclosures with each initial payment or notice of denial and upon request.

Air ambulance nuanceFor air ambulance services, 'recognized amount' is not used; cost sharing is calculated as the lesser of the QPA or the billed amount, and QPA disclosures are required where cost sharing is based on the billed amount or QPA.

When to discloseDepartments finalized that QPA disclosures also must be provided when cost sharing is determined using the billed amount (including rare cases where billed amount is less than QPA).

Recognized amount (air ambulance) — technical distinction

Technical distinctionRecognized amount (air ambulance): the term 'recognized amount' is not used for air ambulance cost‑sharing; instead, cost sharing is the lesser of the QPA or the billed amount for air ambulance services.

Practical effectThis technical amendment clarifies that QPA disclosures apply for air ambulance services when cost sharing is calculated using the billed amount or the QPA.

Regulatory cross‑referenceAmendments made to 26 CFR 54.9816‑6(d), 29 CFR 2590.716‑6(d), and 45 CFR 149.140(d) to reflect this distinction.

Days (business days) interpretation for timelines

Interpretation'Days' used in disclosure and open negotiation provisions are to be interpreted as 'business days' (excluding weekends and Federal holidays) to align with existing regulatory timeframes.

ReasoningAligns disclosure timeframes with previously codified open negotiation and IDR timelines to minimize confusion.

ApplicabilityApplies across disclosure provisions, the 30‑business‑day open negotiation period, and response deadlines unless otherwise specified.

Open negotiation notice (definition)

DefinitionOpen negotiation notice: the required notice initiating the 30‑business‑day open negotiation period that must include specified provider and plan identification, item/service identifiers, initial payment (including $0), QPA if available, offers, and a copy of any remittance advice associated with the initial payment or denial.

Required channelMust be furnished through the Federal IDR portal (CMS‑9897‑F) using standard forms.

EffectSubmission of a valid open negotiation notice starts the mandatory 30‑business‑day open negotiation period that must be exhausted before IDR initiation.

Open negotiation response notice (definition)

DefinitionOpen negotiation response notice: the required response to an open negotiation notice that must be furnished through the Federal IDR portal and submitted as soon as practicable but no later than the 15th business day of the 30‑business‑day open negotiation period; failure to provide it on time does not extend the open negotiation period.

ContentMust include specified contact and claim information, confirmations of initial payment and QPA when applicable, eligibility statements and supporting documentation, and remittance advice confirmations where required.

LimitationsParties may exchange counteroffers privately but are not required to submit counteroffers via the portal.

Remittance advice copy required with open negotiation notice (definition)

DefinitionRemittance advice copy required with open negotiation notice: a copy of any remittance advice associated with the initial payment or notice of denial of payment for the item or service must be included with the open negotiation notice to support identification and eligibility determination.

ScopeThis requirement applies to remittance advice sent to entities without a contractual relationship and to both paper and electronic remittance formats.

PurposeAims to reduce submission of ineligible disputes and enable earlier eligibility assessment by certified IDR entities.

QPA handling in open negotiation materials

DefinitionQPA handling in open negotiation materials: when the QPA was provided with the initial payment or notice of denial (or in remittance advice), it must be included or confirmed in open negotiation materials; responding plans/issuers must state the QPA they believe is correct and provide supporting documentation if discrepant.

Provider‑initiated nuanceIf the initiating party is a provider, the QPA must be included in the notice of IDR initiation only if it was provided with the initial payment or denial.

PurposeEnsures both parties and certified IDR entities have QPA information needed to assess eligibility and payment considerations early in the process.

open negotiation response notice (term reference)

Term referenceOpen negotiation response notice: the standardized form and notice type defined in the rules that collects required contact, claim, payment, QPA, eligibility, and remittance elements for the receiving party's response during open negotiation.

RoleUsed to confirm or contest information in the open negotiation notice and to provide supporting documentation for eligibility assertions.

TimingMust be submitted via the Federal IDR portal within the 15‑business‑day response window of the 30‑business‑day open negotiation period.

notice of IDR initiation (term reference)

Term referenceNotice of IDR initiation: the formal notice submitted to initiate Federal IDR after exhaustion of open negotiation that must include detailed identification of parties, item/service identifiers, payment amounts, QPA when applicable, remittance advice copy, attestation of eligibility, and preferred certified IDR entity.

ChannelMust be furnished to the other party and the Departments through the Federal IDR portal using standard forms.

Key elementsIncludes provider/plan identification (NPI/TIN/registration), service identifiers, initial payment amount (including $0), QPA if available, remittance advice copy, attestation of qualified IDR item or service, and preferred certified IDR entity.

QPA inclusion conditional when provider initiates (definition nuance)

Conditional inclusionQPA inclusion conditional when provider initiates: when the initiating party is a provider, the QPA is required in the notice of IDR initiation only if the QPA was provided with the initial payment or notice of denial.

Plan/issuer initiatingIf the initiating party is a plan or issuer, the QPA must be included when available as part of the notice of IDR initiation.

PurposeThis approach balances burdens on provider initiators with the Departments' goal of ensuring QPA visibility for eligibility and adjudication.

Remittance advice as document associated with initial payment/denial

DefinitionRemittance advice as document associated with initial payment/denial: a copy of any remittance advice associated with the initial payment or notice of denial of payment must be attached to the IDR initiation notice; Departments clarified this replaces earlier broader proposed language.

PurposeFacilitates earlier eligibility screening and reduces burdens on certified IDR entities by providing original payment documentation.

FormatApplies to paper or electronic remittance advice; ERAs (835) are covered under ASC X12 835 standards.

qualified IDR item or service (term reference)

Term referenceQualified IDR item or service: an item or service eligible for resolution through Federal IDR; eligibility excludes items/services subject to specified State laws or All‑Payer Model Agreements and depends on required attestations and criteria.

Eligibility checksCertified IDR entities perform eligibility determinations after final selection and may close disputes found ineligible per finalized timelines.

AttestationInitiating party must attest that the item/service is a qualified IDR item or service and provide the basis for the attestation in the notice of IDR initiation.

remittance advice associated with initial payment/denial (term reference)

Term referenceRemittance advice associated with the initial payment or notice of denial: the remittance advice document that must be provided with open negotiation notices and IDR initiation to substantiate initial payment and QPA disclosures.

Required inclusionMust be included in open negotiation notices and included or attached to IDR initiation notices per finalized requirements.

UseUsed by plans, providers, and certified IDR entities to confirm initial payment amounts, QPA, registration numbers, and other identifying information.

notice of IDR initiation response timeframe (3 business days)

TimeframeNotice of IDR initiation response timeframe: the non‑initiating party must provide a written notice and supporting documentation in response to the notice of IDR initiation within 3 business days after IDR initiation.

ConsequencesFailure to timely furnish the response may forfeit certain procedural opportunities (e.g., selecting an alternative certified IDR entity) and can affect eligibility contest timing.

Submission channelMust be submitted through the Federal IDR portal to both the initiating party and the Departments.

notice of IDR initiation response (term reference)

DefinitionNotice of IDR initiation response: the standardized written response from the non‑initiating party containing identification, item/service details, agreement or correction of payment/QPA, eligibility attestations, remittance confirmations, and acceptance/objection to preferred certified IDR entity.

Required elementsIncludes provider/plan identification (NPI/TIN/registration), third‑party representative info, item/service identifiers, statements on initial payment and QPA accuracy, cost‑sharing if plan, and remittance advice confirmation.

Channel and timingMust be furnished via the CMS‑9897‑F Federal IDR portal within 3 business days of IDR initiation.

Federal IDR portal (CMS-9897-F) definition

DefinitionFederal IDR portal (CMS‑9897‑F): the Department‑operated portal and required submission channel for open negotiation notices, open negotiation responses, notices of IDR initiation, notices of IDR initiation response, and supporting documentation using standard forms.

FunctionEnables pre‑population of subsequent notices, standardized data capture, and transmission to the Departments and the other party.

RequirementUse of the Federal IDR portal is finalized as the required method for furnishing these notices; parties may still exchange other negotiation communications outside the portal but are not required to do so.

Failure to jointly select (definition)

DefinitionFailure to jointly select: finalized to mean that by the end of the third business day after IDR initiation the parties have not jointly selected a certified IDR entity (with clarified counting of business days and specific rules for notices submitted on the third business day).

ResultIf parties fail to jointly select within that period, the Departments will select a certified IDR entity and notify parties no later than 6 business days after IDR initiation.

Process detailThe Departments revised definitions to replace 'does not agree'/'fails to object' with 'fails to respond' to promote clarity and prevent gaming.

Notice of certified IDR entity selection (definition)

DefinitionNotice of certified IDR entity selection: the standardized portal form a party uses to indicate agreement or objection to a preferred or alternative preferred certified IDR entity; must be furnished within 3 business days after IDR initiation.

ContentMust state agreement or objection and include an explanation of any conflict of interest when objecting; if objecting on the third business day, special timeline rules limit further alternations.

UseUsed in the preliminary selection exchange leading to final selection or Department selection if parties fail to jointly select.

Conflict-of-interest attestation (definition)

DefinitionConflict‑of‑interest attestation: the preliminarily selected certified IDR entity must attest (via the portal) within 3 business days that it meets regulatory conflict‑of‑interest requirements, will assign personnel impartially, and will not assign personnel with disqualifying recent relationships.

ConsequencesIf the entity notifies the Departments it does not meet requirements or fails to respond within 3 business days, the Departments will randomly select another certified IDR entity and notify parties within 1 business day.

Final selectionThe date of final selection is the date the Departments notify parties after a certified IDR entity attests it meets conflict requirements.

qualified IDR item or service (eligibility caveat re State law/All-Payer Model)

Eligibility caveatQualified IDR item or service eligibility excludes items/services governed by specified State laws or All‑Payer Model Agreements; such items/services are not eligible for Federal IDR.

Determination authorityCertified IDR entities (not Departments) are responsible for making eligibility determinations within the finalized timeframe after final selection.

Attestation requirementInitiating parties must attest the item/service is a qualified IDR item or service and provide the basis for the attestation in the notice of IDR initiation.

Tolling (suspension of timeframes while awaiting information)

DefinitionTolling: suspension of the applicable procedural timeframe for a stage of the Federal IDR process while parties provide additional information requested by the certified IDR entity; tolling lasts until earlier of receipt or the 5‑business‑day expiration.

MechanicsCertified IDR entities may request additional information at any time; parties must submit requested information within 5 business days via the Federal IDR portal or timelines are tolled and determinations proceed without the information if not provided.

Withdrawal consequenceIf required information is not provided by both parties and adjudication cannot proceed, the dispute will be considered withdrawn.

bundled payment arrangement (definition restated)

Restated definitionBundled payment arrangement (restated): arrangement where a provider, facility, or air ambulance provider bills multiple items/services under a single service code, or where a plan/issuer makes or denies initial payment under such a single code (e.g., DRG), allowing submission as a single bundled dispute.

Treatment noteFinal rules codify the definition and clarify that certain batching rules do not automatically apply to bundled arrangements.

Regulatory sectionsDefined at 26 CFR 54.9816‑3, 29 CFR 2590.716‑3, and 45 CFR 149.30 and discussed in the preamble to these final rules.

batched items/services (definition)

DefinitionBatched items/services: multiple qualified IDR items and services that meet batching criteria (same biller, same plan/issuer, relate to treatment of a similar condition, furnished within same 30‑business‑day period) and may be considered jointly in a single payment determination, subject to line‑item limits.

Line‑item capFinalized maximum of 50 line items per batched dispute.

Biller requirementMust be billed by the same provider/facility (same NPI or TIN); batched items must be paid by the same group health plan or health insurance issuer per finalized distinctions for fully insured vs self‑insured plans.

single patient encounter (definition)

Single patient encounterA single patient encounter is a patient encounter on one or more consecutive days during which the qualified IDR items or services were furnished to the same patient and billed on the same claim form.

Batching implicationItems/services furnished during a single patient encounter and billed on the same claim form are eligible to be batched under the finalized criteria.

Consecutive days requirementConsecutive days and same claim form requirement prevent overly broad batching across distant dates or multiple claims.

same plan or issuer (definition/distinction for batching)

DefinitionSame plan or issuer: for batching, items/services must be paid by the same group health plan or the same health insurance issuer; for fully‑insured coverage the same issuer can satisfy the requirement across different insured plans, whereas for self‑insured plans batching is limited to the same self‑insured plan (TPA cannot substitute across different self‑insured plans).

Practical effectTPAs administering multiple self‑insured plans may not be treated as a single payer for batching across distinct self‑insured plans.

Applicable rulesThis interpretation implements statutory text distinguishing fully‑insured issuer payment from separate self‑insured plan payments.

Single patient encounter (detailed definition)

Detailed definitionSingle patient encounter (detailed): patient encounter on one or more consecutive days during which the items/services were furnished to the same patient and billed on the same claim form; used to determine whether items relate to treatment of a similar condition for batching.

Use in batching rulesFinalized as one of the permitted batching methods (single patient encounter), alongside same/comparable service code and specified Category I CPT ranges.

Claim form requirementItems must be billed on the same claim form to qualify under single patient encounter batching method.

Same or comparable service code (definition)

DefinitionSame or comparable service code: items/services billed under the same service code or a comparable code under a different procedural code system (e.g., CPT vs HCPCS, or DRG) may be batched together when they relate to treatment of a similar condition.

PurposeAllows batching of substantively equivalent services billed under different code systems or with modifiers when they represent the same service.

LimitationsDepartments will publish guidance with examples; certified IDR entities must inspect line items and cannot accept claim‑level submissions lacking line‑item detail.

Category I CPT code ranges (finalized technical corrections)

Final technical correctionCategory I CPT code ranges: Departments finalized narrower Category I CPT code spans (anesthesia, radiology, pathology, laboratory) to identify which codes within those specialties may be batched together and made technical corrections (e.g., breast mammography 77046–77067; pathology/lab code adjustments) to be published in guidance.

Guidance forthcomingDepartments will publish tables in guidance specifying exact CPT ranges and technical corrections for batching.

Operational noteThese CPT ranges are intended to promote batching efficiency while ensuring items relate to treatment of similar conditions.