Officials from various federal agencies have announced that they are establishing a new renewal process for the “independent dispute resolution (IDR)” entities that make decisions in No Surprises Act (NSA) billing disputes. According to representatives from the U.S. Department of Health and Human Services (HHS), the U.S. Department of Labor (DOL) and the U.S. Treasury Department (Treasury), one portion of the new recertification process for IDR entities could include assessment of their fairness in deciding these disputes.
The federal agencies released a new set of answers to frequently asked questions (FAQs) about the IDR entity recertification process. One answer to those FAQs referenced the need for an IDR entity to provide rationales for its decisions that meet regulatory requirements in its recertification application. Other criteria in the recertification application include an entity’s ability to handle high volumes of disputes quickly and comply with statutory and regulatory timeframes. Another criterion includes whether an IDR entity has conflicts of interest, which federal regulations prohibit. Overall, the new recertification process will mirror the procedural and regulatory requirements as the initial certification process.
Once an IDR entity meets minimum recertification requirements, regulators will include its name on a list of entities undergoing a five-day public petition period. During the petition period, anyone, including members of the public, providers, employers, plans, insurers, and state regulators, can petition for the denial of an IDR entity’s recertification. For instance, a petition for denial might argue that an IDR entity is unfair or rules too often in favor of plans.
If an IDR entity fails to apply for recertification, or federal agencies reject its bid for recertification, it must refund IDR entity fees for pending disputes. An IDR entity that objects to its rejection must request a hearing within 30 days.
Congress passed the NSA to combat “surprise billing,” or cases in which patients with commercial healthcare insurance receive unexpected bills for certain services. These services include emergency care at out-of-network hospitals, treatment by out-of-network physicians at in-network hospitals, and emergency air ambulance services. The NSA created the IDR entity system in 2022 to run an arbitration-like review process to resolve payment disputes between payers and providers.
Insurers, plans, and their administrators complain that the IDR system disproportionately favors providers. They also claim that the system results in excessively high awards that providers never could have received through regular contracts with payers’ provider networks. In support of that claim, Turquoise Health’s IDR tracking system shows that while the median in-network reimbursement rate for one hour of hospital patient observation time was $86, the median IDR award for that same hour was $19,985.00.
Federal regulators also recently posted interim final regulations designed to reform the IDR system positively. However, the regulations appear to do little to address the perceived problems with the IDR system, other than claiming that the system is unfair to insurers and plan administrators. Nonetheless, some procedural changes might affect this sense of injustice by requiring more information about when participants initiate disputes and creating a new process to resolve disputes before the IDR entity issues a decision.
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