As IDR filings surpass 5 million cases, new AI solution helps health plans manage NSA disputes efficiently and effectively through automated intake, negotiation, arbitration, and reporting workflows
SAN FRANCISCO--(BUSINESS WIRE)--Daffodil Health, an AI-powered platform modernizing U.S. health plan administration and claims processing, today announced the launch of a new product for No Surprises Act (NSA) dispute management. The new tool helps payers and third-party administrators (TPAs) manage a growing volume of disputes more efficiently across intake, negotiation, arbitration, and reporting workflows.
The NSA, which was designed to protect patients from unexpected out-of-network bills, has created an arbitration system that has grown far beyond regulatory anticipation. The federal government anticipated roughly 17,000 disputes annually. In the first half of 2025 alone, 1.2 million were filed, with IDR administrative fees reaching $844 million over the same period. A May 28 federal rule cut administrative fees by over 85%, overhauling the IDR process and making it more economical to file lower-value claims.
“Bulk filings from providers and revenue cycle management firms have pushed dispute volumes beyond what payers and TPAs can reasonably manage. When deadlines slip, cases default, and payers end up paying out claims they may have had the grounds to contest,” says Navin Nagiah, CEO and Co-Founder of Daffodil Health. “The IDR process failed because payers were never built to operate at this volume. I’ve seen how payers consistently lost ground not on merits, but on the mechanics. With filing now cheaper, volumes will climb. This product solves that problem.”
Powered by AI and workflow automation, Daffodil’s new NSA dispute management solution helps payers and TPAs:
- Manage disputes through a centralized work queue, with automated dispute intake and triage from email and payer portals
- Receive AI-supported strategy recommendations and negotiation support, based on claim context and prior dispute history
- Streamline arbitration with arbitrator recommendations and submission-ready documentation
- Track claim status, workflow stages, and financial exposure through reporting and analytics
"The IDR process was intended to balance outcomes between health plans and providers, but instead it has created a disproportionate advantage for providers,” says Paul Wann, COO and senior vice president, TPA, Personify Health. “We are seeing providers significantly increase their charges, leading to higher losses for health plans. The payer industry must improve its processes through technology and AI to restore balance. While the NSA has succeeded in protecting members, it has failed to create a fair and level playing field for payers.”
“Managing complex administrative workflows has real financial consequences for employer health plans, and doing it well is central to our mission,” adds Jaja Okigwe, CEO and President of First Choice Health. “While many providers agree to reasonable contracted rates, out-of-network billing disputes require massive administrative effort to navigate. Our experience partnering with Daffodil on workflow automation highlights how critical modern technology is to the industry. Having visibility and efficiency across administrative processes ensures that resource-intensive workflows don't compromise an administrator's ability to protect client funds.”
Daffodil Health raised a $16.3M Series A in February 2026, led by Flare Capital Partners, with participation from LRVHealth and Maverick Ventures, to support the company’s product development, expand deployments, and improve claims transparency.
About Daffodil Health:
Daffodil Health is an AI-first healthcare technology company modernizing the claims and pricing infrastructure used by U.S. health plans. Its configurable, transparent platform enables payors and third-party administrators (TPAs) to bring out-of-network (OON) repricing and payment integrity in-house—without added operational complexity or labor costs.
Daffodil replaces opaque, percentage-of-savings middlemen with a modern SaaS model that gives plans direct control over pricing logic, real-time reporting, and defensible benchmarks that withstand regulatory and audit scrutiny. Built to work alongside existing core claims systems, the platform supports next-generation plan designs such as reference-based pricing, narrow and tiered networks, and dynamic copays.
Across its customers, Daffodil has delivered consistent seven-figure improvements in plan margins by reducing administrative waste and aligning incentives. Headquartered in San Francisco, the company’s mission is to help health plans lower costs, improve auditability, and enable more sustainable, member-centric benefit designs.
About Personify Health:
Personify Health is on a mission to make health simple, personal, and engaging. We created the industry’s first and only personalized health platform, seamlessly fusing smart third party administration (TPA), digital care navigation, and health engagement into one dynamic, connected experience. Our platform addresses the full health continuum, harnessing cutting-edge AI and human expertise to provide a comprehensive set of solutions, ecosystem partnerships, and integrated services that deliver real, independently validated clinical outcomes and cost savings. Empowering 25 million members and having supported 7,500 companies to-date, we are redefining how businesses and people experience health. Visit www.personifyhealth.com to learn how healthier lives and healthier businesses happen with Personify Health.
About First Choice Health Network:
First Choice Health (FCH) is a market-leading, diversified health benefits company with high-performing administrative capabilities, expansive network solutions, and advanced enablement platforms. Built from the ground up by hospitals and physicians, FCH has spent over 40 years creating direct, financially sustainable relationships between healthcare providers, employers, and individuals. Serving more than 800,000 members nationwide, the company’s robust suite of solutions includes third-party administration, medical management services, provider data tools, and Employee Assistance Programs (EAP). These offerings are anchored by an expansive PPO network—one of the nation’s largest independent provider networks. As a recognized leader in direct-to-employer enablement, FCH combines its rich operational legacy with modern technology to drive market diversity, choice, and greater cost savings. To learn more, please visit www.fchn.com.
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