New York State Department of Financial Services Introduces Guidance and Proposed Regulation to Strengthen New York’s Surprise Medical Bill Resolution Process

Strengthens Efficiency While Protecting New Yorkers from Surprise Medical Bills During Health Insurer and Health Care Provider Disputes

New York State Department of Financial Services (DFS) Acting Superintendent Kaitlin Asrow today issued new guidance to health insurers, health care providers, and independent dispute resolution (“IDR”) entities implementing improvements to the IDR process signed into law by Governor Hochul as a part of her Fiscal Year 2026-2027 (FY27) Budget. The IDR program protects patients from the financial consequences of disputes between out-of-network health care providers and health insurers. Along with this guidance, the Department is publishing a draft regulation to further implement reforms in the Budget.  

“This guidance and regulation ensure that New York’s Independent Dispute Resolution system runs effectively and efficiently while continuing to protect New Yorkers from surprise medical bills,” said New York State Department of Financial Services Acting Superintendent Kaitlin Asrow. “This advances Governor Hochul’s mission to make health care fairer, more affordable, and more accessible for all New Yorkers.”   

The Legislature recently amended Financial Services Law Article 6 to exclude Medicaid Managed Care coverage from the IDR process, add the Empire Plan and Student Employee Health Plan to the IDR process, and establish unique criteria for disputes involving these plans. The amended law also increases the time IDR entities have to issue decisions and requires health care providers and health insurers to pay an IDR entity before the IDR entity reviews the dispute, among other things. 

Governor Hochul signed these amendments into law on May 28, 2026 as part of the FY27 enacted Budget and broader efforts to modernize insurance-related laws in New York State.  

The draft regulation is subject to a 10-day preproposal comment period beginning today. A 60-day public comment period will commence upon the proposed regulation’s publication in the State Register. The law takes effect on August 26, 2026. In order to ameliorate conflicts between the new law and existing regulation and to fill in gaps in the law that are necessary for the proper handling of disputes on August 26, the amendments to the regulation will be temporarily adopted on an emergency basis effective August 26 while the proposed version of the amendments work their way through the regulatory process.  

For more information about the IDR process, please visit the Department’s IDR webpage. Health insurers, health care providers, and IDR entities with questions are encouraged to contact DFS.