Before an eligible payment dispute can proceed to the Federal Independent Dispute Resolution (IDR) process, the parties generally must first participate in a 30-business-day open negotiation period. The purpose is straightforward: allow the provider or facility and the health plan to agree on an appropriate out-of-network payment amount before moving the dispute to formal arbitration.
For hospitals, health systems, physician groups, and other organizations managing significant volumes of out-of-network claims, however, open negotiation is more than a procedural step. Eligibility, documentation, deadlines, payer communication, and claim-level data can affect whether a dispute can ultimately proceed through Federal IDR.
Understanding how the process works—and the changes taking effect under the 2026 Federal IDR Operations Final Rule—can help revenue cycle teams better manage eligible disputes.
What Is the Open Negotiation Period?
Under the No Surprises Act, the Federal IDR process may be used to determine payment amounts for certain qualifying out-of-network services when the parties cannot agree on reimbursement.
These can include certain:
- Out-of-network emergency services
- Non-emergency services provided by nonparticipating providers at participating healthcare facilities
- Out-of-network air ambulance services
Federal IDR generally applies when an applicable All-Payer Model Agreement or specified state law does not govern the payment determination.
Before Federal IDR can begin, the disputing parties must complete a 30-business-day open negotiation period to agree on the total out-of-network payment amount.
Historically, the party initiating open negotiation generally had to provide an open negotiation notice within 30 business days after receiving an initial payment or notice of denial of payment for the item or service.
The 2026 Federal IDR Operations Final Rule introduces additional requirements for initiating and documenting this process through the Federal IDR system.
What Changed in 2026?
The Departments of Health and Human Services, Labor, and the Treasury finalized new Federal IDR operational requirements in June 2026, and the final rule takes effect August 3, 2026.
One significant change involves how open negotiation is documented.
Under the final rule, a party initiating open negotiation must submit the open negotiation notice to both the opposing party and the Departments through the Federal IDR portal. The party must also submit the payment remittance or notice of denial.
The 30-business-day open negotiation period begins when the required information is submitted through the process the Departments established.
The final rule also establishes an open negotiation response notice. The party receiving the open negotiation notice must respond to the initiating party and the Departments by the 15th business day of the 30-business-day negotiation period.
These changes clarify when negotiations begin and end, improve information exchange between parties, and help determine whether disputes are eligible to proceed through Federal IDR.
Because implementation dates and Federal IDR system functionality can vary by provision, providers should continue to monitor current CMS guidance and notices when managing disputes.
Why Open Negotiation Matters
It can be tempting to view open negotiation simply as a prerequisite to Federal IDR. But it serves an important role in the overall reimbursement process.
Open negotiation gives providers and health plans an opportunity to exchange information and potentially resolve the payment dispute without incurring the administrative costs associated with Federal IDR.
It can also allow the provider to evaluate the claim before deciding whether formal dispute resolution is appropriate.
For revenue cycle teams, this may mean reviewing information such as:
- The initial payment or denial
- The qualifying payment amount (QPA)
- Applicable CPT/HCPCS codes
- Place of service
- Payer and plan information
- Whether federal or state dispute resolution rules apply
- Documentation supporting the provider’s position
- Previous communication or negotiation activity involving the claim
CMS has specifically identified incomplete information—including missing claim numbers, explanations of benefits, QPA information, and supporting documentation—as issues that can delay Federal IDR disputes.
Not Every Out-of-Network Claim Qualifies for Federal IDR
One of the most important steps happens before open negotiation even begins: determining whether the claim qualifies for the Federal IDR process.
The Federal IDR process does not apply universally to every out-of-network claim.
Depending on the item or service, payer, plan type, state, and other circumstances, payment determination may instead fall under a state law or an applicable All-Payer Model Agreement.
That makes eligibility review a critical part of managing an NSA reimbursement strategy.
Submitting disputes that are ultimately determined to be ineligible can consume staff resources, delay reimbursement efforts, and add unnecessary administrative work.
For organizations handling substantial out-of-network claim volumes, establishing a consistent process for identifying potentially eligible claims can help revenue cycle teams focus their efforts more effectively.
What Happens During the 30-Business-Day Period?
During open negotiation, the parties can agree on the total out-of-network payment amount.
The process can involve more than simply exchanging payment offers.
Providers may use the negotiation period to review the payer’s payment methodology, evaluate claim information, provide supporting documentation, and communicate the basis for the requested reimbursement.
Strong operational processes are especially important when an organization is managing many disputes simultaneously.
Teams should be able to track:
Open negotiation initiation dates.
The start date determines when the 30-business-day negotiation period ends.
Payer responses and offers.
Maintain all communication associated with the dispute as part of the claim record.
Supporting documentation.
Organize and keep relevant claim, clinical, coding, reimbursement, and payment information accessible.
Federal IDR eligibility.
Eligibility should be reviewed before moving a claim into formal dispute resolution.
Critical deadlines.
Missing a deadline can affect the ability to pursue a dispute.
CMS encourages disputing parties to retain documentation demonstrating initiation of the required open negotiation period, including relevant communications between the parties.
What Happens if Open Negotiation Does Not Resolve the Dispute?
If the parties do not reach an agreement during the required open negotiation period, an eligible dispute may proceed to the Federal Independent Dispute Resolution process.
Under current CMS guidance, either party may generally initiate Federal IDR during the four-business-day period after the 30-business-day negotiation period ends.
That creates a relatively narrow filing window.
Once Federal IDR begins, the parties submit payment offers and supporting information, and a certified IDR entity ultimately selects one of the submitted payment offers as the payment amount for the disputed item or service.
Importantly, entering Federal IDR does not prevent the parties from continuing to negotiate. The parties may still agree on a payment amount before the certified IDR entity makes its determination.
The Importance of Documentation
Documentation plays an increasingly important role throughout the Federal IDR process.
CMS recommends that disputing parties maintain and submit information such as:
- Complete claim information
- Explanation of Benefits (EOB)
- Qualifying Payment Amount information
- Remittance or notice of denial
- Appropriate service and procedure codes
- Documentation showing that open negotiation was initiated
- Relevant communications between the parties
Maintaining this information at the claim level can make it easier to transition an unresolved dispute from open negotiation into Federal IDR when appropriate.
The 2026 operational changes further reinforce the importance of accurate documentation by adding requirements for open negotiation notices and responses.
Open Negotiation Should Be Part of a Larger IDR Strategy
For healthcare organizations managing a small number of disputes, tracking individual open negotiations may be relatively straightforward.
The challenge grows considerably as claim volume increases.
Revenue cycle teams may need to determine eligibility, initiate negotiations, monitor responses, track deadlines, evaluate settlements, prepare Federal IDR submissions, monitor determinations, reconcile payments, and identify payer reimbursement trends simultaneously.
That makes open negotiation one component of a broader out-of-network reimbursement recovery strategy.
Organizations should consider whether their processes provide visibility into questions such as:
- Which claims are potentially eligible for Federal IDR?
- Which claims are currently in open negotiation?
- When does each negotiation period expire?
- Has the payer responded?
- Has a settlement offer been received?
- Which unresolved claims should move to Federal IDR?
- What filing deadlines are approaching?
- What reimbursement patterns are emerging by payer?
Having centralized visibility into this information can help prevent eligible disputes from being lost because of missed deadlines or incomplete documentation.
Preparing for the Evolving Federal IDR Process
The Federal IDR process continues to evolve.
In addition to the 2026 operational rule, CMS is transitioning Federal IDR activity from individual web forms to a centralized IDR Gateway, intended to give parties a more unified way to manage disputes.
The Departments have also finalized changes affecting areas such as open negotiation documentation and batched disputes, with certain batching provisions scheduled to apply to disputes with open negotiation periods beginning on or after November 1, 2026.
For healthcare organizations, these developments make ongoing monitoring of Federal guidance increasingly important.
Policies, workflows, technology, and reporting processes may need to evolve as new requirements become applicable.
Building a More Consistent Approach to Out-of-Network Recovery
Open negotiation offers an opportunity to resolve an out-of-network payment dispute before arbitration, but it also sets the stage for what happens next.
Accurate eligibility review, complete documentation, timely payer communication, and careful deadline management can help healthcare organizations navigate the process more effectively.
For hospitals and health systems managing substantial out-of-network reimbursement activity, developing a structured approach across open negotiation, Federal IDR, payment reconciliation, and reporting can provide greater visibility into outstanding reimbursement and help ensure eligible disputes continue moving through the appropriate recovery process.
IDR Dynamics works with healthcare organizations throughout the Federal IDR lifecycle, including claim eligibility review, open negotiation, Federal IDR submissions, arbitration management, payment reconciliation, and reporting.
Learn more about IDR Dynamics’ Federal IDR and out-of-network reimbursement services.
References
U.S. Department of Labor. Federal Independent Dispute Resolution (IDR) Process. Provides guidance and model notices for the Federal IDR process established under the No Surprises Act
Centers for Medicare & Medicaid Services (CMS). No Surprises Act Notices and Federal IDR Updates. Provides current operational notices, implementation dates, deadline information, and updates regarding the Federal IDR process.
