Major Changes Being Made to the Federal Independent Dispute Resolution Process Under the No Surprises Act

The recent final rule issued by the U.S. Departments of Health and Human Services (HHS), Labor, and the Treasury has introduced significant changes to the fees associated with the federal Independent Dispute Resolution (IDR) process under the No Surprises Act (NSA).

This Act, a part of the Consolidated Appropriations Act of 2021, aims to provide a resolution mechanism when disputes arise over payment amounts for out-of-network items and services, including those provided by air ambulance services.

The need for these amendments stems from Texas Medical Association v. U.S. Department of Health & Human Services, which vacated parts of the previous guidance for establishing the administrative fee for the federal IDR process for disputes initiated in 2023. Consequently, the departments have shifted from annually published guidance to notice-and-comment rulemaking to set these fees.

Central to this new rule is the administrative fee.

As mandated by law, both parties in a dispute must pay this non-refundable fee, calculated to cover the departments’ expenditures in managing the IDR process. The methodology for determining this fee now bases the total number of administrative fees on the projected payments to certified IDR entities, reflecting a move towards greater transparency and stability, in response to public comments. The departments have set the administrative fee at $115 per party for disputes initiated following the rule’s effective date, with annual reviews for potential adjustments.

Additionally, the rule addresses certified IDR entity fees. Entities either certified or seeking certification must disclose their intended charges for payment determinations to the departments. These fees must align with the fixed ranges set by the departments for both single and batched determinations. In response to the Texas suit’s opinion and order, the departments have established these ranges through rulemaking, enhancing transparency.

The finalized fees range from $200 to $840 for single determinations and $268 to $1,173 for batched determinations. For batched disputes exceeding 25 line items, a separate fee structure has been finalized.

Moreover, the rule maintains the process for certified IDR entities to set their fees annually within the established ranges or to seek approval for fees outside these ranges. In a new provision, these entities can now request a mid-year fee update, subject to the departments’ approval.

In summary, this final rule marks a significant shift in the federal IDR process under the NSA. It introduces a more transparent and stable framework for establishing administrative and certified IDR entity fees, providing clarity and predictability for all parties involved in these disputes.

This development is crucial in the broader context of healthcare finance and regulation, as it directly impacts how out-of-network payments are resolved, ultimately affecting both providers and patients.