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The No Surprises Act (NSA), enacted in 2020, was designed to protect patients from unexpected medical bills in certain healthcare settings. The law primarily applies when a patient receives emergency care at either an in-network or out-of-network facility, or receives services from an out-of-network provider while being treated at an in-network facility. In these situations, the NSA generally prohibits providers from balance billing (i.e., billing for the difference between patients’ total charges and the amount covered by insurance) patients for amounts beyond the patient’s applicable in-network cost-sharing obligations. As a result, patients are financially responsible only for the amounts they would have owed had the services been rendered entirely in-network.

Because the NSA effectively requires out-of-network providers to accept the payor’s reimbursement, together with the patient’s in-network cost-sharing amount, as payment in full, the law also created a framework for resolving disputes regarding the appropriate reimbursement amount. Prior to the NSA, there was no uniform method for determining the proper payment owed to an out-of-network provider when the provider and payor disagreed on reimbursement.

To address this issue, the Federal Independent Dispute Resolution (IDR) Process was implemented in 2022 pursuant to the NSA. The IDR process established a formal arbitration system for resolving payment disputes involving out-of-network services provided in both emergency and certain non-emergency circumstances. The process removes the patient from the payment dispute entirely and instead places the reimbursement determination before a certified independent arbitrator.

In practice, however, the IDR process has proven to be highly technical, deadline-driven, and administratively burdensome. Providers and payors must comply with numerous procedural requirements, and a provider’s failure to meet even a single deadline may result in the permanent loss of the ability to recover payment. Below is a general timeline of the federal IDR process:

  1. The health plan or issuer must issue either an initial payment or a notice of denial of payment within 30 days after the provider submits the bill.
  2. Beginning on the date the out-of-network provider receives the initial payment or denial, the provider has 30 days to initiate the open negotiation period.
  3. The parties are required to complete the full 30-day open negotiation period before either side may initiate the IDR process.
  4. Within four business days after the close of the open negotiation period, either party may initiate the IDR process by submitting a Notice of IDR Initiation to the Departments of the Treasury, Labor, and Health and Human Services (the “Departments”).
  5. The non-initiating party then has the opportunity to either accept the initiating party’s proposed certified IDR entity or object and propose an alternative entity. If no response is provided within three business days, the initiating party’s proposed entity is deemed accepted.
  6. Once contingently selected, the certified IDR entity must, within three business days, confirm that no conflict of interest exists and determine whether the dispute is eligible for the IDR process. This finalizes the entity’s selection.
  7. No later than 10 business days after the certified IDR entity’s selection is finalized, both parties must submit their payment offers and remit the required administrative fees.
  8. The certified IDR entity then has 30 business days from the date of finalized selection to issue a payment determination and notify both the parties and the Departments of its decision.
  9. Any payment owed pursuant to the IDR determination must be issued within 30 calendar days after the arbitrator’s decision.
  10. Following a payment determination, a 90-day “cooling off period” applies. During this period, the initiating party may not commence another IDR proceeding against the same opposing party involving the same or similar item or service.
  11. After the expiration of the 90-day cooling off period, any eligible claims must be refiled within 30 days. If that 30-day refiling window is missed, the claim generally cannot be refiled, and the opportunity to pursue reimbursement through the federal IDR process is effectively lost.

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