Final IDR Rules Could Give Employers Some Relief, Eventually

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Quick Hits

• Starting June 11, 2026, the fee for IDR disputes will be lowered from $115 to $15, making the process more accessible for smaller disputes but potentially increasing the system backlog.
• Health plans and insurers must register in a new IDR registry to help providers correctly identify payors, potentially reducing ineligible or misdirected disputes.
• The open negotiation period will be managed through the federal IDR portal using standardized forms, with a fifteen-business-day response window, aiming to reduce disputes that are ineligible for IDR.
• An IDR entity must determine dispute eligibility within five business days, and payment determinations must be made within thirty business days, with binding decisions based on submitted payment offers.

Recent research has found that many claims that wind up in the IDR arbitration system generate awards for providers that are several times higher than the in-network median amount paid, or qualifying payment amount (QPA) for the relevant service in the relevant market. Those amounts are growing, and providers are winning nearly 90 percent of those disputes, which involve either emergency room charges or, primarily, out-of-network specialists—such as anesthesiologists, radiologists, and doctors performing neurology and neuromuscular procedures—who provide services at in-network facilities.

The U.S. Departments of Health and Human Services, Labor, and the Treasury (the “Departments”), together with the Office of Personnel Management, indicate that the regulations, which update 2023 proposed rules, are designed to streamline communication between payors, providers, and the IDR entities that resolve arbitration disputes and to clarify timelines and processes. For instance, IDR disputes will have to be submitted through the existing federal IDR portal, and they must be submitted on standard forms developed by the Departments.

Though the final rules are generally effective August 3, 2026, many of the key changes will take effect only after the Departments issue further guidance in coming months or years.

Key Provisions of the New Final Regulations

Fee Reduction

The Departments cut the IDR fee starting on June 11, 2026, to $15 from $115, regardless of the amount in dispute or the dispute’s eligibility. This is potentially good and bad news for employers, as IDR may become viable for smaller disputes, but this could also add to the IDR system’s significant backlog.

IDR Registry

Group health plans and health insurers will have to register under a new IDR registry, and each will be assigned a registration number. The Departments believe the registry will help providers “accurately identify” payors, thereby “reducing the number of ineligible disputes initiated within the Federal IDR process and reducing the number of disputes incorrectly initiated against the wrong” payor.

Negotiation Notices

Under the final rule, the open negotiation period will be run through the existing IDR portal. A party would initiate the negotiation period by filing a written notice through the portal, and the other party would have fifteen business days to respond with specific information. Both parties must use standard forms developed by the Departments.

This could be a significant development as a common employer complaint is that many IDR awards involve disputes that were never eligible for IDR in the first place.

Initiating the IDR Process

If no agreement is reached during open negotiations, either party could initiate the IDR process by submitting a notice through the existing federal IDR portal within four business days after the open negotiation period ends. The other party then would have three business days to respond with its own notice, which is a new development.

IDR Eligibility Determinations

The final regulations also standardize the timeline for determining whether a dispute is eligible for IDR. Once an IDR entity is selected to resolve the dispute, it must determine whether the dispute is IDR-eligible within five business days.

Research suggests that IDR entities are making payment determinations on disputes that were never IDR-eligible to begin with. The Departments are encouraging parties to contest eligibility during open negotiation or via the notice of IDR initiation response to avoid situations where disputes are found ineligible only at a later time—which may result in parties paying fees they otherwise would not owe—and to minimize the backlog currently plaguing the system.

Payment Determinations

Not later than thirty business days after the date of final selection of the certified IDR entity (or thirty business days after items and services are determined eligible when extenuating circumstances apply), the parties must each submit a proposed payment amount. The IDR entity then selects the offer it determines best represents the value of the item or service at issue. The IDR entity must issue a written decision within thirty days of the date it is selected. The decision is binding on the parties.

Staying Informed

Ogletree Deakins’ Employee Benefits and Executive Compensation Practice Group will continue to monitor developments and will provide updates on the Employee Benefits and Executive Compensation blog as additional information becomes available.

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