No Surprise: Independent Dispute Resolution Issues Remain Unresolved

The No Surprises Act’s Independent Dispute Resolution process – deemed clunky by some – appears to be swamping the HHS system.

The No Surprises Act arbitrators are swamped, U.S. Department of Health and Human Services (HHS) Secretary Xavier Becerra told senators last week. “We are receiving 10 times the number of claims that anyone ever expected,” he said.

The Secretary was speaking at a hearing about the Independent Dispute Resolution process, or IDR, which the agency created as required by the No Surprises Act. While the Act protects patients from balance billing, that still leaves the question of how much health plans should pay providers for those out-of-network services.

Enter the IDR process, whereby third-party arbitrators decide a provider’s reimbursement by considering a number of factors outlined in the original Act and in subsequent regulations and guidance.

But the IDR process is completely overwhelmed, Becerra and other officials told lawmakers. A recent survey found that over 90 percent of emergency department claims initiated in the IDR process remain open.

The process is not quite a year old yet, so how did this train wreck happen?

Three reasons:

First, HHS underestimated how much the IDR would be used by providers to argue for reimbursement.

In the original rule, the Centers for Medicare & Medicaid Services (CMS) suggested that a little more than 17,000 claims would go to IDR in the course of a year. Last week, the trade journal Health Affairs estimated that 700,000 IDR claims have been initiated.

So, they were only off by about 683,000.

Now, numbers seem to indicate that at least half of the claims submitted aren’t actually eligible to be arbitrated. The problem is that there is no good way to weed those ineligible claims out early in the process.

Which brings us to the second problem: the processes put in place to manage the IDR. For example, the government IDR portal, meant to facilitate communication between all parties, got a late start, not launching until April of last year, and it has been at best, clunky. New features to the portal are added every month, but the IDR is still a very manual process, and difficult for all parties to use, including the beleaguered third-party arbitrators.

Finally, CMS has been required to continually change its IDR policies, particularly regarding the methodology the arbitrators should use to make their determinations, because of a series of lawsuit decisions emerging from the U.S. Federal Court in Texas.

In 30 seconds, here’s the rough-and-tumble life and times of the NSA’s IDR policy:

• In September 2021, CMS published its interim final rule on the IDR process.
• In January 2022, the policies in that regulation were put into play.
• In March 2022, the Texas court ruled that the methodology that the arbitrators used did not align with the original statute. CMS pivoted, changed its guidance, and promised a new rule with the new guidance.
• In August 2022, CMS published another final rule with the policy, as required by the Texas court.
• On Feb. 6, 2023, the Texas court said that CMS did not go far enough in changing the arbitrators’ methodology. The court said, basically, that the arbitrators should not be beholden to any methodology.
• On Feb. 10, CMS told the arbitrators to stop making decisions.
• On Feb. 24, CMS told the arbitrators to restart making decisions, but only on claims on services provided before Oct. 25, 2022, because those decisions would fall under the first Texas court ruling.
• Then, on the 17^th of this month, CMS told the arbitrators they could continue making decisions on all No Surprises Act claims, but they needed to apply the second Texas ruling to claims on services provided on or after Oct. 25.

In the words of one senator last week, “it’s a big mess.”