Daffodil Health, an AI health plan administration platform, unveiled a new solution on Thursday that aims to help payers manage No Surprises Act disputes.
The No Surprises Act shields patients from unexpected medical bills by keeping them out of payment disputes between insurers and providers. Under the law, insurers and providers must first spend 30 days negotiating reimbursement. If they fail to reach an agreement, either party can initiate the Independent Dispute Resolution (IDR) process, in which both sides submit proposed payment amounts and an independent arbitrator, known as an IDR entity, selects one of the offers.
However, many payers are arguing that the IDR process is being abused by some providers, with providers initiating the vast majority of cases and winning most of the time at significantly inflated award levels. When the No Surprises Act was first introduced, it was estimated that there would be 17,000 arbitration cases a year, but in just the first half of 2025, there were over 1.2 million cases.
Daffodil’s new NSA dispute management solution aims to solve this issue. When a payer receives disputes from a provider, the system reads the disputes, triages and categorizes them, and then automatically creates responses to the providers that the payer can review and send.
In addition, when a provider pushes back on claims, the system assesses which claim to pay, which one to counteroffer and which one to take to arbitration by analyzing pricing, benchmarking and arbitration data. This “ensures that you spend time and money only where it matters,” said Navin Nagiah, CEO and co-founder of Daffodil Health.
For NSA claims that go into arbitration, the system proposes an arbitrator and automatically creates an arbitration package for the payer to review. Lastly, the solution allows the payer to easily show their employer groups how they’re managing NSA disputes.
“Payers need to be able to handle the rising volume of disputes with minimal to no increase in labor costs; respond to providers without batting an eyelid even if they dump 2,352 disputes on a Friday afternoon; increase their win-rate [with respect to] arbitrations, and give confidence to their employer groups that they have the infrastructure to help support the employers by sharing both their efforts and results with them easily and quickly,” Nagiah said. “That is exactly what Daffodil’s NSA solution allows you to do.”
Daffodil isn’t the only tech company looking to solve issues with the NSA dispute process. Zelis also recently launched a solution that is tackling payer IDR challenges.
Ultimately, the NSA debate isn’t really a “payer-versus-provider story,” Nagiah said.
“It’s a story about an entire industry of middlemen, on both sides of the table, whose revenue depends on artificially billed amounts, ‘paper’ savings, disputes staying complicated and contentious, etc. The more friction in the system, the more middlemen come in professing to add value and ‘take a cut,’” he said. “It behooves forward-looking payers to stop using middlemen, reduce healthcare admin spend, and both improve their own margins and help reduce premiums for their employer customers.”
Photo: KLH49, Getty Images
