To reduce No Surprises Act (NSA) claim disputes, a coalition of federal agencies has issued a new list of nine remittance advice remark codes (RARCs) for payers to use to explain payments that differ from the amount billed. Federal regulators hope the new RARCs, which supplement existing claim adjustment reason codes (CARCs), will help insurers and health plans communicate better with providers. Agencies participating in the continuing refinement and overhaul of the independent dispute resolution (IDR) process include Federal Independent Dispute Resolution Operations, including the Internal Revenue Service, the Employee Benefits Security Administration, and the Office of Personnel Management.
For instance, one of the new RARCs indicates that a state has set a certain limit on the reimbursement level for a particular service. Another RARC states that the claim is ineligible for the NSA IDR process, while yet another RARC conveys that the plan doesn’t cover the service billed in the provider’s claim.
The RARC guidance went into effect on August 6, 2026. Payers must use the RARCs in selected circumstances beginning on January 1, 2027.
The purpose of the NSA is to protect consumers with commercial health insurance coverage and self-insured employer plans from some types of unexpected medical bills. These bills include patients receiving out-of-network emergency care, emergency air transportation services, and, in some cases, care from out-of-network providers while at an in-network hospital.
The NSA established the IDR system, which provides a mechanism for providers and payers to resolve their billing disputes without implicating the patient. Some, but not all, of the requirements of the Federal Arbitration Act (FAA) apply to the IDR system, which has led some to debate whether the system should be classified as arbitration and IDR entities as arbitrators.
Employers and health plans expected IDR system utilization to be low and to produce fair results for all parties involved. However, these payers now claim that providers owned by private equity have filed a deluge of IDR disputes. They also allege that IDR entities rule in favor of providers over 80% of the time and issue extremely high monetary awards, in some cases 11 to 30 times higher than what Medicare would pay for the same services.
The newest upgrades to the IDR system are part of a larger overhaul process announced by federal regulators earlier this year. They intend to move the IDR system to a new platform, collect additional information about parties filing disputes, and require parties to complete informal dispute resolution before using the IDR process. Payers hope these changes will result in fairer outcomes.
Regulators also recently announced that they would require a renewal application process for organizations that wish to continue to provide IDR entity services and collect IDR fee revenue. The renewal process will go into effect when an organization’s five-year certification expires. The process includes a five-day public comment period, which will allow interested parties to provide input on potential bias by the IDR entity.
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