Dive Brief:

• The HHS, the Department of Labor and the Department of the Treasury proposed hiking the administrative fee to enter the No Surprise Act’s independent resolution process 200%, from $50 to $150, in a proposed rule filed Thursday. The agencies also proposed increasing the upper limit of the fee range for certified IDR entities by 20% for single determinations and 25% for batched determinations. The proposed rule, if finalized, would go into effect on Jan. 1, 2024.
• The agencies project to spend $70 million to implement IDR in 2024 on personnel costs, certifying IDR entities and completing investigations. Assuming 225,000 IDR disputes close next year, based on trends observed between February and July, the proposed increase would allow the agencies to recoup costs. 
• The proposal comes a month after a Texas federal court ordered the agencies to vacate a separate fee increase, which had raised the administrative fee to $350. The judge ruled such an increase made the process “cost-prohibitive” to some parties, particularly providers.

Dive Insight:

The No Surprises Act, which went into effect in January 2022, was meant to protect patients from unexpected medical bills after receiving care from out-of-network providers at in-network facilities. However, it has complicated payer and provider relations as the parties have volleyed responsibility for payments back and forth.

The law stipulates that disputes must be adjudicated in IDR, an arbitration process where parties submit a payment offer to a third-party arbiter, who then selects one amount in what is called a final-offer or baseball-style arbitration process. 

Though simple in concept, payers, providers and arbitration service representatives told a House Ways and Means Committee this week that the roll-out has been far from smooth. 

Parties filed 334,828 disputes in the the federal IDR portal between April 15, 2022 and March 31, 2023 — nearly fourteen times the number of claims the CMS said it had estimated and prepared for.

High volumes have created a backlog, Jim Budzinski, EVP and CFO of Georgia-based Wellstar Health System told representatives in the Sept. 19 hearing. His system has filed approximately 8,000 IDR requests since the portal opened. Of those, only seven percent have been resolved, he said. 

Raising the fees associated with IDR, federal agencies suggest, could provide agencies additional resources to address the large dispute volumes.

However, if providers have to pay higher administrative fees, IDR could be a “false recourse,” because the fee may exceed the amount of the claim billed, Seth Bleier, vice president of finance at Wake Emergency Physicians Professional Association in North Carolina, told representatives this week.

Last month, Judge Jeremy Kernoodle for the Eastern District of Texas concurred that the government could not set prohibitively high rates, finding that the previous increase to $350 was too high. 

The process has faced additional scrutiny outside of fees and been the center of multiple successful lawsuits, filed by the Texas Medical Association. Providers have alleged that everything from restrictions on batching claims to rules about the rates providers could submit for consideration tilted the process in the payers’ favor. IDR has been paused nationwide since August as the CMS works to revise IDR standards to address critiques. On September 21, the CMS directed certified IDR entities to resume processing all single and bundled disputes submitted on or before August 3, 2023.