in December 2020. and a payment resolution process for physicians, hospitals, air ambulances, and other providers when such out-of-network care is given. Implementation of the law has been anything but smooth for the Departments with jurisdiction—the Departments of Health and Human Services, Labor, and the Treasury—and more than a year and a half since the surprise billing provisions took effect, resolution of outstanding issues and concerns, specifically related to the payment resolution process, seems far from certain.
One of the key pieces of the NSA, the Independent Dispute Resolution (IDR) process, continues to be in flux as court cases challenge IDR regulations and processes. Although the Centers for Medicare & Medicaid Services (CMS) has issued guidance in an attempt to address district court decisions, the Biden Administration recently announced that it plans to appeal the latest decision, and at least two court cases challenging the IDR process are still pending. In addition, reports about the IDR process released in December 2022 and April 2023 showed that the IDR process is overwhelmed by disputes, resulting in a slow process. Providers who are seeking fair arbitration of disputes with insurers over NSA-related payments face changing standards, increasing filing costs, and lengthy waiting times.
Status of Implementation
The surprise medical billing protections of the NSA took effect on January 1, 2022, preventing patients from receiving a surprise medical bill for emergency care and some out-of-network care at an in-network facility.
established patient protections, including cost-sharing requirements through the calculation of the qualifying payment amount (QPA) and the payment resolution process, respectively.
it was the treatment of the QPA in the IDR process outlined in the September IFR that created a firestorm of controversy and, ultimately, a series of consequential lawsuits.
IDR Lawsuits and Changing IDRE Guidance
Following issuance of the September 2021 IFR, several physician and other provider groups quickly filed lawsuits in various venues challenging portions of the rule that created a rebuttable presumption in favor of the QPA in the IDR process. Under the IFR, IDREs were to presume the QPA to be the appropriate out-of-network rate, and other allowable supporting factors relevant to payment, including those enumerated in the statute (e.g., the provider’s level of training, market share of the parties, and the acuity and complexity of the case), were to only to be considered in limited circumstances, despite, as the plaintiffs all argued, no statutory language creating this presumption.The judge ruled in favor of TMA and vacated the IFR provisions that created the rebuttable presumption.
In August of 2022, the Departments issued a final rule that attempted to correct issues related to the weighing of the QPA in the IDR process but did so in ways that many physicians and provider groups found too deferential to the QPA and outside the Administration’s statutory authority once again. For example, the Departments prohibited “double counting” of information submitted to the IDREs that may be accounted for in the QPA calculation. The final rule states that IDREs should consider whether the additional information included in the parties’ offers is already accounted for in the QPA or in other information submitted and then avoid weighting the same information twice. For physicians and other providers, such a standard was considered entirely unworkable given that providers were not privy to the data used to calculate the QPA,in the same district asking the judge to vacate provisions in the final rule that continued to overweight the QPA in the IDR process, and the judge issued a ruling on February 6, 2023, that did just that.
Immediately following the TMA II decision, the Departments paused all IDR determinations and directed IDREs to recall any payment determinations issued on or after the date of the ruling. On February 27, 2023, IDREs resumed processing payment determinations for services provided before October 25, 2022, as they were not affected by the TMA II decision. On March 17, the Departments issued guidance that largely reflected the statutory language related to the QPA and other supporting information to be provided to the IDRE, reinstating the IDR process for all claims and applying the new guidance to those claims submitted after October 25, 2022.
Although many stakeholders assumed that the most recent guidance might be the end of the debate over the role of the QPA in the IDR process, on April 6, 2023, the Biden Administration filed a notice to appeal the TMA II decision, further extending the uncertainty around the process.
Currently, the IDR process is operating under the March guidance.
in November 2022 challenging the calculation methodology of the QPA under the rules as contrary to the statute. and rates of other specialties, exclude bonuses and other incentive payments, and allow QPAs to be calculated by individual plan sponsors. Stakeholders are awaiting a decision in this case.
against the Departments arguing that a December 2023 600% increase (from $50 to $350) in the non-refundable administrative fee and the same-service-code batching rule are both procedurally and substantively unlawful, will be economically devastating for physicians, and will hinder access to the IDR process, impeding physicians’ ability to obtain adequate payment for their services.
December and April Reports Showed Substantial Number of Disputes Filed by Providers, Large IDRE Backlog
Providers intending to use the IDR process to secure out-of-network payment consistent with the NSA face a number of hurdles, with an overburdened, slow IDR process principal among them.Those reports show that the number of disputes has far exceeded what the Departments anticipated and that only a small proportion of disputes have been fully adjudicated. The Initial Report covered April 15, 2022, through September 30, 2022; the Second Report covered October 1, 2022 through December 31, 2022; and the Status Update provided a broader summary, covering April 15, 2022, through March 31, 2023.
The chart below details the most common disputes by CPT code.
Similarly, the top disputes by service code were consistent in both reports:
- Emergency department visit for life-threatening or functioning severity
- Emergency department visit for problem of high severity
- Emergency department visit for problem of moderate severity
- Critical care, first 30–74 minutes
IDR Process Lags Behind Dispute Submission
Although one of HHS’ guidance documents lays out expected timelines for the IDR process based on NSA regulations, the document notes thatThe long wait times for dispute arbitration may be a particular hardship for providers because it slows the revenue cycle and creates uncertainty about payment. In addition, while awaiting dispute determination, providers and payers may also have repeated disputes related to similar claims. In fact, the IDR process includes a 90-day “cooling-off period,” during which the party that initiated the IDR process may not submit a subsequent However, a subsequent submission for the same or similar items or services is allowed if the end of the open negotiation period occurs during the 90-day cooling off period. These procedural limitations, again, may slow the revenue cycle.
Accordingly, eligibility includes both whether a dispute is appropriate for the IDR process based on NSA applicability to certain items, services, and payers, as well as whether the parties engaged in the proper administrative steps prior to submitting the dispute
The Departments have tried to speed the IDR process by making it easier for IDREs to determine whether a dispute is eligible for the process. On December 22, 2022, HHS updated a guidance document and made revisions to the Selection Response form on the IDR portal to require additional information from entities disputing the use of the IDR process. The required additional information includes, but is not limited to, citations to state law (if applicable), documentation confirming a particular law applies, and proof of health plan type. In addition, a federal technical assistance team has begun providing technical assistance to IDREs by performing research and outreach on disputes about eligibility for the IDR process. Although the technical assistance team will provide assistance, the IDRE will make the final determination about eligibility for the IDR process.
Issues determining eligibility of a given claim for the IDR process can also pose a substantial hurdle for providers. Providers typically have limited resources to devote to IDR disputes, much less to analyze how NSA regulations and interact with state law in a given state.
The issue of state versus federal jurisdiction is particularly complicated. Congress drafted the NSA to defer to state-level surprise billing laws that may apply to state-regulated health insurance products.But the extent of state surprise billing laws and other state laws determining the total amount payable for a particular item of service under a particular state-regulated health plan, coverage or issuer, vary widely. Regardless, whether IDR is available or whether payment for an item or service is governed by state law is an area of tremendous complexity.
Given that the IDREs are having trouble assessing this threshold issue of eligibility, it makes sense that providers similarly face substantial challenges determining which payment disputes to submit to the IDR process.However, the state laws may only apply to certain items or services and certain state-regulated plans. State resolution processes generally would not apply, for instance, to ERISA plans or out-of-state plans. Dispute eligibility analysis can require a provider to assess whether a given dispute belongs in a state’s dispute resolution process or whether the NSA applies to a particular item, service, or payer. Myriad payer types—some of whom may correctly claim that the NSA is not eligible to them—may add to the confusion. It can be difficult, therefore, for providers to navigate the web of state and federal regulations.
Challenges with the state-federal authority analysis are coupled with administrative and procedural requirements to access the IDR process.
For example, the Initial Report found that incorrect batching of claims has led to determinations of ineligibility. Under the statute, batching of multiple claims for the same provider for the same payer is permitted wheneverThis narrower definition may have created some confusion among stakeholders and led to nonpermissible batching. It also means that fewer claims can be batched together for the IDR process, increasing volume, and perhaps leading to even greater backlog.
Difficulty with eligibility not only means that providers are expending resources conducting difficult legal analysis but also that providers may be expending resources on submitting claims that are ineligible.the advice is focused on the administrative requirements of the IDR submission process and does not help providers analyze dispute eligibility in the context of the complex legal arena of NSA, ERISA, and state law.
is pending. This increase has the potential to make the IDR process inaccessible for many physician practices, especially smaller practices that may not be able to overcome the fee increase through claims batching. Similarly, financially strained practices may not be able to withstand an IDR loss, cover the IDR fees, and the higher administrative fee, making pursuit of the dispute resolution process potentially too financially risky.
Future Areas of Potential Enforcement and Regulatory Action
Enforcement of IDR Decisions
A growing issue that seems ripe for increased enforcement is timely payment to the prevailing party after an IDR decision. The statute requires payment within 30 days following notice of the IDRE’s decision, and while some time periods in the federal IDR process can be extended for extenuating circumstances,
There are obvious financial implications for parties, particularly physician practices, when the non-prevailing party does not meet the statutory deadlines for payment, and there are financial barriers to pursuing legal action to enforce an IDRE’s decision in such situations. Moreover, late or non-payment by the non-prevailing party could erode confidence in the IDR system and serve as a deterrent to participation in the IDR process by those parties who cannot afford the risk. As such, it is important that federal and state regulators move to better enforce IDR outcomes.
is the clear place to submit complaints, but work will have to be done to ensure timely responses and engage state regulators where appropriate.
Contract Terminations and Network Adequacy
In enacting the NSA and removing patients from the middle of surprise billing disputes, Congress recognized that a meaningful and balanced IDR process would be needed to allow providers and health plans the opportunity to make their case for fair out-of-network amounts. However, the NSA could also result in payers terminating provider contracts in favor of using the IDR process.Termination of physician and hospital contracts could result in narrower or inadequate networks, impacting patient access to care.
IDR Process Has Limited Effects, Not Linked to Enforcement
The IDR process is limited in the extent of the protections it offers to physicians and other providers and its ability to protect these providers from ongoing or future NSA-related payment issues. The IDR process can result in a better payment for a specific claim submitted to the IDR process. However, the IDR process is not directly linked to enforcement actions, meaning that, theoretically, a payer can continue to deny or underpay certain types of claims, even if an IDRE previously determined a similar dispute in favor of a provider.The lack of a linkage between enforcement and the IDR process means that physicians may face an uphill, long-term battle related to out-of-network payment amounts.
Likely recognizing the potential disconnect, Congress required that two years and four years after implementation of the IDR process, the Departments will submit to Congress an interim report and final report, respectively, on whether any payersWhile unclear how Congress or the Departments will use the reports, the findings may provide direction for future policymaking.
Approaching NSA Reimbursement
As the IDR process evolves, physicians should seek to stay abreast of changes by regularly checking the CMS NSA website. When deciding whether to submit claims to the IDR process, we recommend reviewing the law—to the extent possible—to determine whether the dispute belongs in a state process or is eligible for the federal IDR process. Furthermore, the open negotiations period is required, and physician should engage in it in good faith and use it as an opportunity not only to negotiate claim payment but also to work with the payer, if possible, to understand the claim payment and the payer’s explanation for the claim payment. If the claim is eligible for the federal IDR process and an agreement has not been reached, providers can then use the information gained during open negotiation to meaningfully engage in the IDR process.Finally, despite reported delays in responses, it will prove important for physicians to report NSA problems and noncompliance to the Departments, including through the NSA Help Desk, so that the Departments are able to provide assistance at both an individual and systemic level.