State surprise billing laws and Federal IDR (including Texas)
Federal IDR is the fallback. When a state surprise billing law applies to the plan, the provider and the service, the state’s method sets the out-of-network rate instead.
Specified state laws
Federal rules call a qualifying state law a “specified state law”. It controls only when it covers the specific plan, provider or facility, and item or service. Otherwise Federal IDR applies (45 CFR 149.30) (42 U.S.C. 300gg-111(a)(3)(K)).
Self-funded employer plans
States generally cannot regulate self-funded (ERISA) employer plans, so those plans use Federal IDR unless the state lets such plans opt in to its process and the plan does so. The CMS chart lists Georgia, Maine, Nevada, New Jersey, Virginia and Washington as opt-in states (CMS chart); Texas also allows elections by self-funded plans (TDI).
Which states have their own process
The CMS Federal IDR applicability chart lists these states as having a “bifurcated” process, where a state law or All-Payer Model Agreement may apply to some plans and services: California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Maine, Maryland, Michigan, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, Ohio, Texas, Virginia and Washington. All other states, DC and the territories use the Federal IDR process (CMS chart).
Date of this list: the CMS chart states that its state law information is current as of January 11, 2023. State laws have changed since; check the state’s current law and the CMS state letters before relying on it (CMS letters index) (CMS state laws summary).
Texas
Texas law (Texas Insurance Code chapter 1467 (statute)) bars balance billing and sets up state mediation and arbitration for certain out-of-network bills. In its January 25, 2022 letter, CMS found that Texas law is a specified state law for emergency care, out-of-network facility-based providers at in-network facilities, and certain diagnostic imaging and laboratory services, for fully insured PPO, EPO and HMO plans regulated by the Texas Department of Insurance and for the state employee (ERS) and teacher (TRS) plans (CMS Texas letter).
Under the Texas process, per the Texas Department of Insurance:
- Mediation is for out-of-network facilities; arbitration is for out-of-network providers that are not facilities (TDI FAQ).
- Arbitration can be requested 20 to 90 days after the provider receives the first claim payment; mediation 20 to 180 days (TDI FAQ).
- A request starts a 30-day informal settlement period; for arbitration, the decision is due by day 51 (TDI FAQ).
- Arbitrators weigh ten factors in Insurance Code section 1467.083, including FAIR Health benchmarks (TDI FAQ).
- Self-funded employer plans may elect to use the Texas process, and ground ambulance services are covered from January 1, 2024 (TDI).
Federal IDR still applies in Texas to self-funded employer plans that have not opted in, to coverage not regulated by TDI, and to air ambulance services (CMS Texas letter). That is why Texas has a large share of Federal IDR volume: this site counts 3,461,198 determined Federal IDR line items with Texas as the place of service, 2023 Q1–2025 Q4 (Texas data page). Outcomes of the Texas state process are not in the CMS files.
Texas facts re-checked on 2026-10-19 against the TDI pages (FAQ last updated October 17, 2025) and the CMS letter.
Common questions
Does Federal IDR apply in Texas?
Yes, for disputes not covered by Texas law: for example self-funded employer plans that have not opted in to the Texas process, and air ambulance services (CMS letter to Texas, January 25, 2022).
Which states let self-funded plans opt in to the state process?
The CMS applicability chart (state information as of January 11, 2023) lists Georgia, Maine, Nevada, New Jersey, Virginia and Washington; Texas also allows elections, per the Texas Department of Insurance.
More in Learn: The No Surprises Act, in plain English · How Federal IDR works, step by step · What is the qualifying payment amount (QPA)? · Which services and specialties are covered? · Federal IDR glossary
General information, not legal advice. Rules change; check the cited sources. Last reviewed 2026-10-19.