On November 3, 2023, the Departments of Health and Human Services, Labor, and the Treasury (collectively, “the Departments”) released a proposed rule that would implement significant administrative and technical changes to the No Surprises Act’s (“NSA”) Independent Dispute Resolution (“IDR”) process (the “Proposed Rule”). These changes aim to create a more efficient IDR process by (1) promoting active participation by all parties, and (2) requiring additional information be shared between disputing parties and the Departments to facilitate the earlier identification of services that may be ineligible for the IDR process.
The IDR Process
IDR is a mechanism for determining the appropriate amount to be paid by group health plans and group health insurance issuers (collectively referred to as “Plans”) to out-of-network facilities and providers (collectively referred to as “Providers”) for services that are subject to the NSA’s prohibition on balance billing patients. For a more detailed discussion of the NSA IDR process, please see our previous articles here, here and here.
The IDR process has been fraught with challenges resulting from an unexpectedly high volume of disputes, an insufficient number of certified IDR entities and the underestimated complexity of determining the eligibility of a claim for IDR. These challenges have been exacerbated by multiple interruptions to the IDR process resulting from successive District Court orders requiring temporary closures of the IDR portal and significant changes to previous guidance, systems and operational processes. As of March 31, 2023, roughly only one-third of disputes submitted for IDR have been officially closed.
The Proposed Rule
The Departments issued the latest Proposed Rule to improve the functionality of the IDR process by facilitating more active participation by the disputing parties, creating more efficiencies and, hopefully, achieving more timely payment determinations. They specifically propose: (i) requiring an earlier and expanded exchange of information between payers, Providers and certified IDR entities; (ii) creating an IDR registry that would include additional information to help Providers identify and contact the applicable Plan to initiate the open negotiation period and the IDR process; (iii) adjusting certain timelines and steps in the IDR process; and (iv) establishing new batching and bundling provisions.
1. Improvements in the Plan’s Initial Payment Information to Providers
The NSA requires Plans to include in the initial claim payment or notice of denial of payment sent to a Provider, the qualifying payment amount for each item and service included on a claim and contact information for initiating the IDR process’s open negotiation period. However, Providers reported that the information currently being provided by the Plans is often insufficient to enable them to determine whether the items and services in question are eligible for the IDR process.
To address this issue, the Departments propose requiring Plans to include the following additional information in the initial payment or notice of denial of payment: (i) the legal business name of the Plan; (ii) the legal business name of the plan sponsor (if applicable); and (iii) the Plan’s registration number as described in the “IDR Plan Registry” section below. The Departments also propose requiring Plans to include new claim adjustment reason codes and remittance advice remark codes, to be specified in future guidance, in all electronic or paper remittance advice to assist Providers and certified IDR entities in determining whether a claim is subject to the NSA and eligible for the IDR process.
2. IDR Plan Registry
The Departments propose creating a new Federal IDR registry, requiring all Plans to submit contact and other information regarding each Plan and plan sponsor (if applicable). The information submitted would be accessible to all Providers to assist Providers in making preliminary determinations as to whether a dispute is eligible for the IDR process and, if so, to properly initiate open negotiations and the IDR process with the correct Plan. Each Plan would receive a unique IDR registration number to be provided to each Provider in the initial payment or notice of denial of payment so that the Provider can easily locate the correct Plan information through the IDR registry.
3. Open Negotiation
The NSA requires the disputing parties to participate in good faith negotiations during a 30-business-day open negotiation period before formal initiation of the IDR process. In response to comments that some disputing parties are not actively engaging in negotiations and/or exchanging necessary information, the Departments propose several changes to facilitate the early exchange of more robust information and to encourage active engagement during the open negotiation period in order to reduce the number of ineligible disputes submitted for IDR.
The Departments specifically propose updating the “open negotiation notice” form to include several new elements to promote greater transparency of relevant information. The Departments would also create a new standardized form, the “open negotiation response notice”, which the party receiving the open negotiation notice would be required to complete and provide to the initiating party no later than the 15th business day of the 30-business-day open negotiation period. The open negotiation response notice would include all the same elements as the open negotiation notice to confirm or update the accuracy of this information.
Each party would submit these forms and other applicable documentation to a central location through the Federal IDR portal to ensure accurate tracking of the dispute by both parties and the Departments. The use of the standardized forms is intended to promote active participation by the parties during the open negotiation period, to promote greater consistency and accuracy in the information exchanged, and to hopefully result in the settlement of more disputes without initiation of the IDR process.
4. IDR Notices
Similar to the proposed changes to the open negotiation process, the proposed rule contemplates the creation of a new standard “notice of IDR initiation” form and a new standard “notice of IDR initiation response” form, both of which would require the parties to disclose additional information and submit the applicable notice along with supporting documentation through the Federal IDR portal. The Departments hope these changes will further improve communications between the parties, assist certified IDR entities in determining whether a claim is eligible for IDR and accelerate the IDR process.
5. IDR Eligibility Determinations
The Departments are of the view that the primary cause for delays in the IDR process has been the complexity of determining whether disputes were eligible for the IDR process. Although the NSA doesn’t specify a timeframe for completion of the eligibility determination process, the Departments seek to promote further efficiency by requiring certified IDR entities to make such a determination within 5 business days after notifying the parties and the Departments of a final certified IDR selection.
However, considering the current backlog of disputes within the IDR process and the length of time it takes to reach an IDR eligibility determination, the Departments propose establishing an adjunct to the current eligibility review process, whereby the Departments would conduct the eligibility review and make an eligibility determination on behalf of the Certified IDR entity. The Departmental eligibility review process would only apply during periods of extenuating circumstances that contribute to systemic delays in processing disputes submitted for IDR. Before implementing or ending the Departmental review, the Departments would post advance public notification of the date that the Departmental eligibility review would take effect and the reasons for invoking the Departmental process.
6. Withdrawal from the IDR Process
Because the NSA regulations don’t currently include a mechanism for withdrawing a dispute from the IDR process once submitted, the Departments propose adding provisions to allow an initiating party to voluntarily withdraw a dispute from the IDR process in certain circumstances and to allow a certified IDR entity or the Departments to withdraw a pending dispute from the IDR Process if the parties fail to timely comply with a request for additional information or both parties fail to timely submit an offer.
7. Clarifying Disputes for “Bundled Payment Arrangement”
The Departments propose defining the following as “bundled payment arrangements” eligible for resolution through the IDR process as a single dispute:
- A provider, facility or provider of air ambulance services bills for multiple items or services furnished to a single patient under a single service code that represents multiple items or services (for example, a DRG code); or
- A plan or issuer makes an initial payment or notice of denial of payment to a provider, facility or provider of air ambulance services under a single service code that represents multiple items or services furnished to a single patient (for example, a DRG code).
Providers would be prohibited from unbundling individual services included in a claim that qualifies as a “bundled payment arrangement” for purposes of IDR.
8. Batching Items and Services
Many interested parties suggested that the Departments should clarify and expand the ability to batch multiple qualified items and services for resolution as a single dispute. After reviewing this input, the Departments propose adding new provisions to allow batching of the following qualified IDR items and services (“line items”) into a single dispute for purposes of IDR:
- Line items furnished to a single patient on one or more consecutive dates of service and billed on the same claim form (a single patient encounter);
- Line items billed under the same service code or a comparable code under a different procedural code system; and
- Anesthesiology, radiology, pathology and laboratory items and services billed under service codes belonging to the same Category 1 CPT code section, as specified in guidance issued by the Departments, in order to address the unique circumstances of these medical specialties and provider types.
However, the Departments propose limiting batched disputes to no more than 25 qualified line items in a single dispute to ensure that certified IDR entities can make timely determinations.
9. Reduced Administrative Fee for Low- Dollar Disputes
In response to comments that IDR administrative fees may be cost-prohibitive in certain circumstances, the Departments propose reducing the administrative fees for parties in low-dollar disputes. Specifically, the IDR administrative fee will be lowered by 50% when the initiating party attests that the highest offer made by either party during the open negotiation period was less than the amount of the full administrative fee (currently $150).
Practical Takeaways
The Proposed Rule reflects the Departments’ latest attempt to improve the functionality of the IDR process. If finalized, the changes will have significant practical implications, and would potentially benefit all disputing parties by improving overall IDR efficiency and lowering costs. Providers already using the IDR process, and those that previously avoided the process because of cost concerns, should monitor the latest developments and consider how the proposed changes may factor into decisions about challenging Plan payments going forward.
Public Comment is open until January 2, 2024. If you have any questions, would like assistance preparing public comments, or are interested in any additional information about the No Surprises Act, please contact:
- Angela Smith at (317) 977-1448 or asmith@hallrender.com;
- Benjamin Fee at (720) 282-2030 or bfee@hallrender.com;
- Matthew Reed at (317) 429-3609 or mreed@hallrender.com; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot give legal advice outside of an attorney-client relationship.
