United States: The No Surprises Act Independent Dispute Resolution Process; 2023 Federal Status Update And 2022 Fourth Quarter Report

On April 27, 2023, The Departments of Health and Human Services (HHS), Labor, and the Treasury (collectively, the "Departments") issued their third status update on the federal Independent Dispute Resolution (IDR) portal for the period comprising April 15, 2022, through March 31, 2023, alongside the initial report on the fourth quarter of 2022. The No Surprises Act requires that the Departments publish certain information about the federal IDR process for each calendar quarter.¹

Background

The No Surprises Act directed the Departments to jointly establish one Federal IDR process.² On April 15, 2022, the Departments launched the federal IDR portal, which allows various health care providers, facilities, and payors (collectively, disputing parties) to determine the appropriate out-of-network payment rate for items and services subject to the surprise billing protections in the No Surprises Act. Through the IDR process, a certified IDR entity reviews offers made by each disputing party. The certified IDR entity then selects one of the parties' offers as the out-of-network payment amount, issuing a binding written payment determination.

April 2023 Status Update

The number of disputes initiated through the federal IDR portal between April 15, 2022, and March 31, 2023, totaled well over ten times the caseload anticipated by the Departments at 334,828 cases. Nearly half of the disputes initiated were challenged by the non-initiating parties, and just under 40,000 were determined ineligible for the federal IDR process, while 106,615 disputes were closed. All disputes must be reviewed by the certified IDR entity for confirmation of eligibility before the dispute can proceed in the federal IDR process. Certified IDR entities rendered payment determinations in 42,158 disputes, of which initiating parties prevailed in 71% of cases. An undisclosed number of cases remain pending as of May 2023.

Report Findings

Information required to be documented in the quarterly reports includes: 1) the number of Notices of IDR Initiation submitted during the calendar quarter, 2) in the case of items or services that are not air ambulance services, the size of the provider practices and the size of the facilities submitting Notices of IDR Initiation during the calendar quarter, 3) the number of Notices of IDR Initiation for which a final determination was made, including information for each final determination, 4) the number of times the payment amount determined — or agreed to — exceeds the qualifying payment amount, specified by items and services, 5) the number of expenditures made by the Departments during the calendar quarter to carry out the Federal IDR process, 6) the total amount of administrative fees paid during the calendar quarter, and 7) the total amount of compensation paid to certified IDR entities during the calendar quarter.

The fourth quarter report (Oct. 1-Dec. 31, 2022) also details state-specific breakdowns of disputes initiated, the top ten initiating and non-initiating dispute parties for each type of out-of-network service, dispute closure reasons by occurrence, and administrative fees and expenditures related to the federal IDR process. The highest dispute activity states were Texas with 25,277, Florida with 15,235, and Georgia with 9,568, whereas Maine, Vermont, and the U.S. Territories — except Puerto Rico with one — all saw zero disputes. Emergency rooms/hospitals commanded the majority of disputes, with 73% of all emergency or non-emergency disputes occurring in that setting. 42% of radiology and 72% of pathology disputes involved emergency department claims. Out of 110,034 initiated disputes, 103,170 were related to out-of-network emergency or non-emergency items or services, versus only 6,864 disputes for out-of-network air ambulance services. While 12,662 closed disputes saw payment determinations reached, in combination, the majority of closures were found ineligible (9,525) or listed as "other" closure reasons (9,527).

Footnotes

1. The Departments' previous status updates were issued in August and December 2022 in conjunction with the publication of the final rules "Requirements Related to Surprise Billing: Final Rules," and administrative fee guidance (Federal Register :: Requirements Related to Surprise Billing). These updates were provided in addition to the initial report on the federal IDR process for the second and third quarters of 2022 (https://www.cms.gov/files/document/initial-report-idr-april-15-september-30-2022.pdf).

2. Code section 9816(c)(2)(A); ERISA section 716(c)(2)(A); PHS Act section 2799A-1(c)(2)(A).

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