CMS Gets a Bad Report Card on the NSA’s First Year

Last week, the Centers for Medicare & Medicaid Services (CMS) gave itself a very bad report card on how it did during the first year of the No Surprises Act’s Independent Dispute Resolution, or IDR.

As you may know, the No Surprises Act, or NSA, protects patients from out-of-network (OON) billing in cases of emergencies or surprise OON care provided in hospitals.

The NSA then leaves payors and providers to work out reimbursement for themselves for these claims. If the provider and the payor can’t work it out, CMS has set up this IDR, whereby providers can make their case before third-party arbitrators on what the reimbursement should be.

Now, when compared to all of the medical claims in the country, even when compared to all of the out-of-network claims in the country, the NSA IDR process handles relatively very few.

OON claims only make up between 10 to 30 percent of total medical claims.

Of those OON claims, only 20 to 30 percent are true surprise billing claims, wherein the patient did not voluntarily choose to go out of network (that is, claims that should fall under the NSA).

Even of those claims that fall under the NSA, only about 3 percent of them actually end up in the IDR arbitration process. For the great majority of NSA claims, the provider and payor agree upon, at some point, an appropriate rate for those OON claims.

One more statistic: of those claims that make it to IDR, three-quarters of them are claims from only 10 providers, most of them large physician staffing organizations.

So, what’s the big deal? Why are there headlines on this, lawsuits, and congressional hearings about an arbitration process that resolves reimbursement for a teeny tiny category of claims for a teeny tiny number of providers?

This may be bad reporting style, but let’s come back to that question after we talk about CMS’s bad report card on the IDR.

Over the past year, CMS reports that about 335,000 disputes were initiated in the IDR. That’s nearly 14 times what CMS estimated the caseload would be in their regulations.

Of those, the arbitrators have only made decisions on 13 percent.

Now, if this were your kid’s report card, it wouldn’t be an F; it would be an incomplete, right, because that statistic means that your kid has only taken about one out of the 10 quizzes that were given this semester.

Now, back to why the IDR is important. If the NSA arbitrators tend to decide that in-network rates are appropriate reimbursement for OON providers, in certain regions, for certain services – or, alternately, if they decide that above-network rates are appropriate in certain regions, for certain services – that’s important for providers and payors to know when they’re making decisions about network participation.

The reimbursement patterns of the NSA IDR decisions – the decisions of this small category of out-of-network claims – is just one data point, but as we know, in the marketplace now are all sorts of reimbursement data points that have been freed by the transparency rules. For the first time ever, providers and payors alike are looking at real data on what is being charged and negotiated, and using that to think strategically about reimbursement.

Said succinctly, when it comes to claims reimbursement, the future is in the data.

But you can’t tell whether your kid is any good at math if he or she has only taken one out of 10 quizzes, and we can’t yet get a grasp on what these IDR arbitrators are deciding if they’ve only decided on 13 percent of the claims.