Clarity and more timely results proposed for Independent Dispute Resolution process

Photo: Reza Estakhrian/Getty Images

A proposed rule pertaining to the controversial No Surprises Act Dispute Resolution process, would, if finalized, require payers to provide additional information at the time of initial payment or notice of denial of payment. 

The proposals aim to increase clarity and speed up the Federal Independent Dispute Resolution (IDR) process, which has been backlogged by claims. 

The proposal for additional payer information was in response to feedback from payers and providers and to ensure all parties have the information necessary to determine whether a payment dispute is eligible for the Federal IDR process, according to the proposed rule issued by The department of Health and Human Services, Labor and the Treasury and the Office of Personnel Management.

The departments also propose to require that payers use standardized codes to communicate whether a claim for an item or service furnished by an out-of-network provider or facility is or is not subject to the No Surprises Act's surprise billing provisions and the Federal IDR process. 

The rule would improve communications between payers, providers and certified independent dispute-resolution entities who make payment determinations, adjust federal IDR timelines, establish new batching criteria, create a more efficient process and change the administrative fee structure to improve the accessibility of the process, according to the proposal.  

WHY THIS MATTERS: WHAT THE RULE WOULD DO

These proposed changes would benefit all disputing parties and reduce the number of ineligible disputes that are submitted to the Federal IDR process, according to the Centers for Medicare and Medicaid Services.

The departments propose several changes to the open negotiation process to encourage disputing parties to engage in meaningful open negotiations before initiating the Federal IDR process. 

First, the departments propose to centralize the open negotiation process through the Federal IDR portal. Under this proposed rule, a party choosing to initiate open negotiation must provide an open negotiation notice and a copy of the remittance advice or notice of denial of payment to the other party and the departments through the Federal IDR portal. 

Under the current process, a party must contact the other party directly to initiate open negotiations, which has resulted in uncertainty as to whether open negotiation was ever properly initiated.

Additionally, the departments propose to include new content elements in the open negotiation notice, such as the plan type, the location of service and the claim number in order to help parties identify the relevant item or service and determine whether the Federal IDR process applies. 

The departments also propose provisions that would help ensure parties respond to open negotiation notices and engage with one another during the open negotiation period.

Eligibility determinations for the Federal IDR process have proven to be complex, time-consuming, and resource-intensive, and certified IDR entities are often uncompensated for such eligibility work. The delays in determining eligibility have impeded certified IDR entities' ability to make timely payment determinations. 

This proposed rule would establish a departmental eligibility review process that could be invoked when dispute volume is high.

As required by statute, both parties to a dispute must pay a nonrefundable administrative fee for participating in the Federal IDR process to ensure that the process is financially self-sustaining.

To improve efficiency, the departments propose to collect the nonrefundable administrative fee directly from the disputing parties. Further, the departments propose consequences for failing to pay the fees.

Additionally, the departments are proposing a reduced administrative fee structure and amounts for parties in low-dollar disputes to promote equitable access to initiate the Federal IDR process, and a reduced administrative fee for non-initiating parties in ineligible disputes.

Some parties have recommended that the departments provide more flexibility on the ability to include multiple items or services as separate payment determinations in a single dispute (referred to as a "batched dispute") to improve efficiency and minimize costs for disputing parties. 

After carefully reviewing this input, the departments propose new batching provisions to allow qualified IDR items and services to be batched.

In combination, the proposed changes in this rule would help improve timely payment determinations and create a more efficient Federal IDR process.

THE LARGER TREND

The No Surprises Act was signed into law in 2020 and went into effect on January 1, 2022, meant to prevent patients from getting a surprise bill from an out-of-network provider.

The intent of the Federal IDR process was to allow providers, including air ambulance providers, facilities and health plans to resolve payment disputes for certain out-of-network charges. 

It also aimed to take patients out of billing conflicts between providers and payers. On this goal, HHS appears to have been successful, but in all others the law has been fraught with complications, mainly over the provisions of the Independent Dispute Resolution process.

The biggest quagmire has been questions and litigation over how the disputed payment amount is decided and more importantly, who gets to decide. CMS has used Qualifying Payment Amount, which is the payer's median contracted rate, to determine disputed payment amounts.

Providers have argued that since the QPA is set by payers, it is one-sided. They also wait for payment while the claim goes through the IDR process.

In December 2021, the American Hospital Association, the American Medical Association and others sued HHS and other federal agencies over implementation of the No Surprises Act, saying the process favored rates set by insurers.

The Texas Medical Association filed numerous lawsuits, and has won four.

On August 24, the U.S. District Court for the Eastern District of Texas struck down a large portion of the regulations for the methodology insurers use to calculate the qualifying payment amount, according to the Texas Medical Association.

On August 3 the same federal court struck down a 600% hike in the administrative fee to access the arbitration process, as well as certain rules that limited batching to the same CPT service code.

ON THE RECORD

"The Biden-Harris Administration continues to take actions to protect patients from junk health insurance and unfair billing practices. This rule is the next step in ensuring we take patients out of the middle of billing disputes between insurers and health care providers," said HHS Secretary Xavier Becerra. "Eliminating surprise medical bills, reducing the burden of medical debt, and curtailing junk insurance plans continue to be high priorities."

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org