In response to a recent federal court ruling, HHS and other departments have proposed a new fee amount for accessing the IDR process under the No Surprises Act.
The rollercoaster ride continues. Many of us actually enjoy the ride. The ups and downs and the change in direction and acceleration can be quite thrilling. That’s true for a carnival ride, but it’s not that exhilarating when it involves keeping up with the ever-changing rules proposed and implemented by federal authorities.
The Latest Proposal
You will recall that, several weeks ago, a federal district court in Texas put the kibosh on the government’s $300 charge for parties accessing the independent dispute resolution (IDR) process. This process, which was developed as part of the No Surprises Act (NSA), is available to insurance companies and out-of-network medical providers where there is a dispute over payment for services. Originally, the fee was set at $50, then it was raised 700 percent to $350. The Texas court was having none of it, saying that the new fee was cost prohibitive to providers, and ordered the government to go back to the drawing board.
In response to the court’s ruling, The U.S. Departments of Health and Human Services (HHS), Treasury and Labor (collectively, “Departments”) proposed last month to set the IDR fee at $150. The Departments also proposed increasing the upper limit of the fee range for certified IDR entities by 20 percent for single determinations and 25 percent for batched determinations. If finalized, the proposed rule would go into effect on January 1, 2024.
According to a report on HealthcareDive, the government projects it will spend $70 million to implement the IDR process in 2024. This includes personnel costs, certifying IDR entities and completing investigations. The Departments based their costs on the assumption that there would be 225,000 IDR disputes in the coming year. This assumption is based on trends that were noted during the period of February to July of this year. The proposed fee of $150 was deemed by the Departments to be sufficient to allow the government to recoup its costs.
Where We Are
With all the changes we’ve seen relative to this topic, it’s no wonder the provider community may be in a state of confusion on where things stand. So, it may be helpful at this point to sum up where we are relative to the NSA and its associated regulations. You’ll recall that the act went into effect on January 1, 2022. The legislation was a response to patients receiving surprisingly large medical bills from providers who turned out to be out of network—unbeknownst to the patients.
The NSA stipulates what the patient can and can’t be charged by these non-participating providers. When it comes to what the insurance pays these providers, the parties are not always in agreement. When this leads to a dispute, the IDR process can be utilized. This essentially involves an arbitration process where parties submit a payment amount to a third-party arbiter—certified by the Departments—who is charged with settling the dispute by determining a payment amount in what is called a “final offer.” Of course, the non-par provider has to pay to enter into this process, and that has been the ball that has been volleyed back and forth for months now, based on court rulings and multiple Department proposals.
Thus far, the IDR process has been a mixed bag for those who have experienced it firsthand. According to one news outlet, payers, providers and arbitration service representatives told the U.S. House Ways and Means Committee in recent testimony that “the roll-out has been far from smooth.” Parties filed 334,828 disputes in the federal IDR portal between April 15, 2022 and March 31, 2023, which amounts to nearly fourteen times the number of claims the Centers for Medicare and Medicaid Services (CMS) had estimated and prepared for. This has led to high volumes and a growing backlog of disputes. The increase in the workload is the government’s rationale for raising the IDR fee from the original $50 rate. The Departments contend that the newly proposed fee ($150) will allow them to provide additional resources to address the large dispute volumes.
We will have to wait and see if the new fee—if finalized—will have the intended effect. It may, in fact, lead to less backlogs, but it could still be deemed a financial deterrent to providers wishing to access the dispute process. Hold on tight; the rollercoaster is pulling out of the station. If you have any questions on this topic, please contact your account executive.
With best wishes,