On May 28, the U.S. Department of Health and Human Services (HHS) finalized regulations intended to make the Independent Dispute Resolution (IDR) process under the No Surprises Act (NSA) more efficient and transparent in helping to resolve out-of-network payment disputes between healthcare providers and payors.
Under the IDR process, insurers and healthcare providers both file what they believe is a fair reimbursement for an out-of-network service rendered to a patient. A third-party arbiter certified by HHS then selects one of the offers.
The new rules come in response to complaints by both payors and healthcare providers about bureaucratic delays and spiraling administrative costs stemming from the fact that the number of filed disputes demanding arbitration has far exceeded the government’s expectations. The rules aim in part to reduce bottlenecks and administrative costs by helping to remove ineligible disputes from the system; reducing the administrative fee for filing an arbitration dispute by over 85% (from $115 to $15); and speeding up decisions by placing reasonable limits on the number of claims that can be batched.
Payers will now be required to use standardized claim codes when communicating about out-of-network services. This will help providers determine sooner whether their claim qualifies for the IDR process, thereby reducing confusion and the number of ineligible disputes.
The new rules lay the groundwork for a new IDR platform to help participants manage disputes, track the status of their claims, and manage activity in one place. The rules also establish a short five-day deadline for arbiters to assess dispute eligibility.
The health insurance industry is hoping the new rules will help fix some of the issues plaguing arbitration since data shows that healthcare providers are winning nearly 90% of arbitrated disputes and that communication issues have led to insurer default rates around 20%. As a result, healthcare providers are often awarded three or four times more than comparable in-network rates when they win. This has led to complaints from the insurance industry that the system is susceptible to “gaming” by a “burgeoning cottage industry” that has been developed by a handful of private equity-backed providers.
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