Health Plan Payment and Reimbursement

New data on No Surprises Act arbitration cases show providers are faring well amid systemic challenges

In a congressional hearing, a senator raised concerns that insurers are not responding to disputes as required and don’t always make timely payments after cases are settled.

May 2, 2023 3:30 pm

Providers are having success at challenging out-of-network payment amounts under the No Surprises Act, at least when they can get their cases through the arbitration system.

CMS published an update showing that between April 15, 2022, when the independent dispute resolution (IDR) portal opened, and March 31, arbitrators issued payment determinations in 42,158 disputes. Initiating parties — almost always meaning providers — prevailed in 71% of those decisions.

The success rate stands to increase over time. New regulatory guidance that seems to favor providers was available to arbitrators only for the last two weeks of the nearly year-long period. Issued March 17 in response to a court decision, the modified guidance instructs arbitrators to more directly consider multiple factors that generally would be advantageous to providers.

Sifting through a logjam

The IDR portal is available to settle disputes over out-of-network payments in scenarios where the No Surprises Act protects patients from being balance-billed. However, the portal has been beset by delays and glitches.

During the first 50 weeks after the portal opened, nearly 335,000 disputes were filed, which CMS notes is almost 14 times greater than the agency’s initial estimates for a full calendar year. Almost 40,000 disputes were deemed ineligible for the process. Eligibility was challenged by non-initiating parties in 122,800 cases, adding to the backlog by requiring IDR entities (i.e., arbitrators) to investigate.

“The process of determining whether a dispute is eligible for the federal IDR process has been a more significant burden for certified IDR entities than either the departments or the certified IDR entities initially expected,” Chiquita Brooks-LaSure, CMS administrator, said in written congressional testimony.

She said increasing the number of staff and contractors available to conduct pre-eligibility reviews, including outreach to disputing parties and technical assistance for arbitrators, should “expedite the resolution” of disputes in 2023.

In an April 26 hearing of the House Energy & Commerce Committee’s Health Subcommittee, Brooks-LaSure was unable to provide specifics when asked when the backlog would be cleared.

Possible issues with insurer conduct

Also of concern to providers are anecdotal reports that insurers are skirting the system.

In a budgetary hearing conducted in March by the Senate Finance Committee, Sen. Michael Bennet (D-Colo.) raised a few questions with Xavier Becerra, secretary of the U.S. Department of Health and Human Services.

“Insurers aren’t responding [to disputes] in a timely manner, sometimes not at all,” he said. “And even when the payment determinations are won by providers, payers still don’t pay providers after the statutory deadline. It’s a big mess, and CMS has frozen and unfrozen the process over the last few months, which has led to significant reduction in cash flows, leaving providers on the hook for tens of thousands of disputes.

“And while patients are still technically protected [from balance billing], these implementation challenges harm every single patient because they don’t know whether providers are actually going to be there to provide the services that they need. So, we’ve got to get this back on track.”

In response, Becerra implied that many of the disputes shouldn’t have been lodged.

“Everyone’s just filing all sorts of claims, and these arbitrators are trying to figure out what cases to handle,” he said. “That’s what’s bogging down the system.”

As explained by members of Congress who helped author the No Surprises Act legislation, the arbitration criteria are meant to place providers and insurers on roughly equal footing in dispute resolution, thus giving insurers motivation to include more providers in their networks. Over time, that should help reduce the flood of disputes in the IDR portal.

That theory could be tested after the release in March of the modified guidance, which seems to mirror the legislative text.

A closer look at IDR cases

A second CMS report does a deep dive into the caseload for Q4 2022 and shows that more than 110,000 cases were initiated for the quarter — a 53% increase over Q3.

Among more than 300 initiating parties, the top 10 parties accounted for 71% of all disputes.

“Many of the top parties were large practice management companies, medical practices or revenue management companies representing hundreds of individual practices, providers or facilities,” the report states. The most prolific organization was the practice management company SCP Health (31,027 disputes, or 30%). UnitedHealthcare was the most frequent non-initiating party to a dispute (25,474, or 25%).

The emergency department was by far the most frequent site of care that led to out-of-network payment disputes, at 73% of all cases, followed by inpatient settings (16%) and on-campus outpatient settings (12%). Some disputes included multiple place-of-service codes, CMS noted.

Among CPT codes that were the subject of disputes, 60% were codes 99281-99288 (emergency department services). Next up were codes 70010-79999 (radiology, 14%); codes 00100-01999 (anesthesia, 7%); and codes 95700-96020 (neurology and neuromuscular procedures, 6%).

Efforts to ease the backlog

Improvements in Q4 included an increase in the share of closed cases in which arbitrators reached a decision (40%, up from 15% in Q3) and a decrease in the proportion that was found ineligible for the IDR process (30%, down from 69%).

In late November, CMS increased its documentation requirements for parties initiating a payment dispute in the IDR portal, requiring them to establish that a dispute is eligible for arbitration.

One of the biggest sources of confusion is eligibility for the federal IDR process where a state agency has jurisdiction over some — but not all — payment disputes.

As it happens, such “bifurcated” states were the originating site of more than two-thirds of the disputes submitted to the federal IDR portal in Q4. The bifurcated states that generated the most submissions were Texas (25,277), Florida (15,235) and Georgia (9,568), according to CMS.

By law, self-insured plans cannot be subject to state regulatory processes. But CMS reported that 25% of disputes in Florida, 22% in Georgia and 14% in Texas involved a fully insured group plan, meaning the case most likely should be adjudicated at the state level and would be ineligible for the federal IDR portal.

A chart is available to help parties determine whether the federal process or a state process holds sway in specific cases.


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