Dispute resolution likely to be more disruptive as a result of new rule

A recently released CMS final rule concerning independent dispute resolution (IDR) mediation likely will cause a further bottleneck of No Surprises Act-based appeals, experts said.

In the final rule, the fees were set at $15, down from $115 paid before the proposed rule came out. CMS in its proposed rule had originally set the revised fees higher, at $150 for a standard dispute and $75 for low-dollar disputes.

Though many of the changes finalized in the rule were welcomed by industry executives, a drastic reduction in administrative fees charged for requesting a ruling is likely going to make an existing problem — a large backlog of disputes — even bigger. ^a

“The next 10 months (are) going to be really ugly,” said Kevin Isaacs, founder and president of Tribunus Health, a contract negotiation firm. “The cost has come down to initiate these disputes. In theory, more claims will come in, (so) not only are we going to still be in the pain of the backlog that we have, but it’s going to get worse.”

The disputes often are over such services as neonatology, emergency department care, anesthesiology and radiology.

The 10-month window is relevant because CMS timed the implementation of the lower fees to begin almost immediately, while other possible offsetting changes won’t take effect until next year. Additionally, payers won’t be able adjust to the new changes very quickly, Isaacs said.

“Maybe I’m underestimating them, but I imagine a significant IT lag exists for payers to reengineer legacy billing engines and coordinate new electronic data streams across clearinghouses so the claims pipeline doesn’t crash,” Isaacs said.

“So it is now much cheaper to dump claims into the system, but the underlying data will remain messy until the payers can turn that giant ship around,” he said.

Support for lower IDR fees

Some of the comments to CMS on the changes had supported the idea of not raising the fees, including from the Tennessee Hospital Association. In its Jan. 2, 2025, comment letter, the organization noted that any increase in the administrative fee would negatively impact lower dollar accounts, which could have a disproportionate impact on physician practices and/or small and rural hospitals.

Hence, CMS’s decision to reduce the fees makes some sense, though the IDR process was going like gangbusters without lowered fees, with the number of disputes continuing to grow over time. The Congressional Budget Office (CBO) estimated that there were 3.4 million disputes filed between the launch of IDR in 2022 and mid-2025. Meanwhile, a Health Affairs article noted that in the first half of 2025, parties submitted 1.2 million new disputes in the IDR portal, which is more than double the same period a year earlier.

The article also said that in the first half of 2025, administrative fees, made up of a general fee and the fee paid to the mediator, totaled $844 million.^b

“This amount is staggering on its own. But it is even more alarming that this amount — for a six-month period — is nearly equivalent to the total of $885 million in administrative fees from 2022 to 2024,” the article’s authors noted.

For Orlando-based AdventHealth, the fees were already mounting, and increasing them would be counter-productive, according to a Jan. 2, 2024, comment letter to CMS, where the letter authors said: “Based on our previous submissions, (the higher fees) would cost AdventHealth an additional $50,000 in expenses to access a process that is already very manual and administratively burdensome.”

Show them the money

Another annoying aspect of the IDR process is the lack of enforcement regarding the payment of fees and penalties, with the CBO calling for research into how the field has responded to the IDR process.^c

“Emerging evidence suggests that the law might not have the effects that CBO anticipated, according to the CBO. “Although prices for some services that had high rates of surprise billing before the law’s enactment have declined … several published reports indicate that providers are winning more than 8 in 10 IDR cases and are being awarded payments that are much higher than expected.”

Moreover, participants are dragging their feet at times in paying what they are owed under CMS rules.

“There’s not a built-in mechanism to enforce them. Often if you fail to meet a deadline, there’s not an immediate consequence set forth in this final rule,” said Jon Zucker, partner with the law firm Sidley Austin LLP, in an interview.

“It’s great that there’s all these new rules and processes and how things are supposed to work, but you need to have the (federal) departments actually following up and enforcing those rules to make sure people are following them,” Zucker said.

While not certain, he said some of the refinements in the final rule may reduce the backlog of rulings, such as some provider-payer communication standards that were made.

“Looking at the rules as a whole, the lower fee may lead to increased claims, but I think the hope would be that the other processes included in the final rule are going to lead to that better communication and hopefully allow for the process to work as intended, and then overall, eventually the number of claims being filed being reduced,” Zucker said.

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a IDR administrative costs include two fees for each dispute: an administrative fee and a fee paid to IDR entities, which are independent third-party arbitrators responsible for making payments.

b Hoadley, J., Watts, K., Keith, K., and DeGarmo, E. “The No Surprises Act IDR Process: An Early Look at 2025 Data,” Health Affairs, March 20, 2026.

c Hayford, T., Pelech, D. and Hale, J., “A Call for New Research on the No Surprises Act,” Congressional Budget Office, June 15, 2026.