Surprise billing arbitration system for out-of-network payment disputes goes live

The Departments of Health and Human Services, Labor and the Treasury (Departments) last week announced the opening of the federal Independent Dispute Resolution (IDR) system for initiating arbitration under the No Surprises Act process and updated their guidance to certified IDR entities for determining out-of-network payment amounts.

What is the No Surprises Act?

The No Surprises Act and related regulations protect patients from surprise medical bills for non-emergency services furnished by out-of-network providers at in-network healthcare facilities, emergency services, and out-of-network air ambulance services. If a provider and the health plan or insurer disagree on the payment amount for out-of-network services and are unable to resolve the dispute through negotiation then either party may initiate the IDR process within 4 business days after the end of the 30 business day negotiation period. A certified IDR entity will then be selected, the provider and the health plan or insurer will each submit a proposed payment amount and supporting information to the IDR entity, and the IDR entity will select one of the two offers as the out-of-network rate.

In late February the Departments paused the launch of the IDR portal after a U.S. District Court judge in Texas vacated surprise billing regulatory provisions that established a presumption in favor of the median in-network rate (the “qualify payment amount” or “QPA”) of the health plan or insurer as the appropriate IDR out-of-network payment amount. For information on the ruling and the No Surprises Act click here and here.

Deadlines for initiating IDR will be back in place

Now that the IDR portal is open the short deadlines for initiating IDR will be back in place. The IDR process can be initiated only during the 4 business days immediately following the 30 business day negotiation period unless the negotiation period expired prior to the opening of the IDR portal, in which case the Departments will allow IDR to be initiated within 15 business days following the opening of the IDR portal. The initiating party must provide written or electronic notice to the other party and submit notice to the Departments through the IDR portal. The Departments have acknowledged that backlogs and delays may result from the pause in launching the IDR system, and so will consider extension requests, monitor case volume, and provide additional guidance.    

The updated guidance sets forth information that must be provided to the IDR entity as well as categories of prohibited information (e.g., usual and customary charges, the amount that would have been billed in the absence of No Surprises Act, and public payor rates). With respect to items and services other than air ambulance, a party is allowed to submit information (excluding the prohibited factors) regarding any of the following circumstances and any information relating to the offer of the other party or that is requested by the IDR entity:

• The provider’s or facility’s training, experience, and quality and outcomes measurements
• Market shares
• Patient acuity or the complexity of the item or service
• Teaching status, case mix and scope of services
• Good faith efforts (or lack thereof) of the parties to enter into network agreements with each other, and (if relevant) contracted rates between the parties during the previous 4 plan years

The presumption in favor of the QPA as the appropriate out-of-network amount continues for air ambulance services but has been dropped for other out-of-network services. The guidance requires the IDR entity to consider the QPA and all credible information submitted by either party and relating to the offer of either party (other than information relating to the prohibited factors), in determining which offer to select as the out-of-network payment amount for items or services other than air ambulance services.

Determinations of whether QPAs are calculated correctly, as well as medical necessity and denial of coverage determinations, are outside the IDR entity’s role. The guidance, however, encourages IDR entities and parties who believe the QPA is incorrect to notify the Departments through the IDR portal so the Departments can take appropriate action regarding the QPA calculation.

 

In light of these changes it will become even more crucial for providers to develop plans on when to challenge out-of-network payment amounts and to implement policies and procedures to manage the tight timeframes for contesting and negotiating payment amounts and for navigating the IDR process. Providers should also have processes in place to quickly assemble and present supporting information. 

 

For more information on surprise billing or related matters, please contact the attorney below.