Out-of-Network Update: Developments with the No Surprises Act and the Independent Dispute Resolution Process
In 2022, following the lead of many states, including New Jersey with the Out-of-Network Consumer Protection, Transparency, Cost Containment, and Accountability Act, the federal No Surprises Act (“NSA”) was enacted to address billing disputes arising from out-of-network medical services. To mediate disputes arising from out-of-network payments between insurers and physicians, the NSA established a federal Independent Dispute Resolution (“IDR”) process, which providers, facilities, and health plans can use to resolve payment disputes for certain out-of-network charges.
To ensure compliance with the timeline and procedural requirements of the federal IDR process, the U.S. Departments of Labor, Health and Human Services, and the Treasury (collectively, the “Departments”) implemented a Federal IDR portal. Parties disputing out-of-network (“OON”) payments are required to utilize this online portal for the initiation of the IDR process, the selection of an IDR entity, and the submission of offers.
Following the passage of the NSA, and the promulgation of regulations to effectuate the NSA processes, multiple parties filed suits against the procedures developed to resolve NSA based disputes. For example, on August 3, 2023, the IDR portal experienced a temporary shutdown to undergo revisions aligned with court decisions including Texas Med. Ass’n v. United States Dept. of Health & Hum. Servs., No. 6:22-CV-450-JDK, 2023 WL 5489028 (E.D. Tex. Aug. 24, 2023) (“TMA III”) and Tex. Med. Assn. v. U.S. Dept. of Health & Hum. Servs., 2023 WL 4977746 (E.D. Tex. Aug. 3, 2023) (“TMA IV”).
The TMA III order vacated certain provisions of the regulation establishing the methodology for calculating the Qualifying Payment Amount (“QPA”) used in provider rate determinations, while TMA IV voided the batching provisions which provided a method for the disputing party to file arbitrations for multiple claims in one filing. TMA IV additionally eliminated the $350.00 per party administrative fee established by guidance issued on December 23, 2022, reverting the administrative fee back to the initial $50.00.
On October 6, 2023, the Departments reopened the Federal IDR portal to initiate specific new disputes related to single and bundled payments. However, the processing of ongoing batched disputes, new batched disputes, and new air ambulance disputes has been suspended indefinitely while the Departments update batching and air ambulance guidance and operations to align with the district court’s opinions and orders in TMA III and TMA IV.
While the need to ensure that the regulations created because of the NSA is a clear necessity, these lawsuits have created significant headaches for providers attempting to access the IDR process. For months, the entire service was down; providers could not file disputes and the deadlines outlined in the NSA were essentially put on ice while the Government could determine how best to comply with the court orders. While the administrative fees were reduced by a significant margin, the loss of the ability to batch claims has resulted in providers and/or insurers being forced into paying multiple IDR entities to process every claim disputed under the NSA. The IDR fees are significantly higher than the administrative fees, and the additional administrative costs and headaches that result from filing numerous disputes are not alleviated by the reduced administrative fee.
Providers should anticipate further updates and modifications to the IDR process as the Departments roll out additional regulations, guidance, and interim solutions. Additionally, because this process has proven to be significantly more carrier friendly than the associated state laws, insurers have been relying on the NSA to reject reimbursement for OON payments.
How Frier Levitt Can Help
Frier Levitt has a wealth of experience guiding and counseling out-of-network providers through negotiations with payors, as well as State arbitrations and the Federal IDR process. We have effectively assisted and defended providers at every stage of state and IDR arbitration, from initiation to resolution. For assistance with state out-of-network dispute and the Federal IDR process, contact Frier Levitt today.