Health Plan Payment and Reimbursement

With No Surprises Act independent dispute resolution changes pending, provider reps voice systemic concerns

A proposed rule issued in late October is designed to make the IDR system more efficient, but simply putting improvements in writing is no guarantee of success.

November 2, 2023 5:28 pm

The No Surprises Act’s arbitration process continues to be hampered by parties that don’t always follow the regulations, stakeholders expressed to CMS on Thursday.

The agency hosted a forum to describe changes being made to the arbitration process, also known as independent dispute resolution (IDR). A proposed rule issued Oct. 27 introduces various technical changes and requirements designed to reduce the logjam of cases that emerged because of inefficiencies in the process.

Two attendees asked how CMS would enforce some of the newly proposed regulations given that insurers to date have not always adhered to as basic an obligation as making a payment within 30 days of an IDR settlement.

A CMS representative said providers should submit such complaints to the No Surprises Act Help Desk to alert the proper authorities about such violations.

A health system representative also raised the issue that payers are not providing upfront information about qualifying payment amounts (QPAs) as required. That leaves providers to initiate the IDR process just to get information about the QPA. That, in turn, bogs down the IDR portal and requires the provider to pay the administrative fee for a case that may not warrant arbitration.

The CMS official said ongoing QPA audits should reveal such issues. And provisions in the newly proposed rule are designed to improve communications between payers and providers about information such as QPAs.

“We’ve tried to include a number of different redundancies and time points and better standardization of the sharing of information in order to provide more clarity to disputing parties,” the official said.

Enforcement snags persist

The concerns speak to broad problems with implementation of the No Surprises Act (NSA) IDR process, said Shawn Stack, HFMA’s director of perspectives and analysis. Although the changes in the newly proposed rule look promising, he said, they won’t have the intended impact if parties can continue to get away with ignoring regulations.

“This is a great step in the right direction, but there’s again no clear directive on who’s going to be policing this process, who’s going to be holding each party accountable for the new proposed rules,” Stack said. “This lack of clarity and enforcement is where we have seen CMS continue to fall short in drafting transparency and NSA rules and regulations.

“Consumers still don’t see audits or compliance findings being published on insurers and payer transparency and NSA activity, for instance, [including with respect to] the lack of insurer and payer participation in the No Surprises Act’s open-negotiation period.” (For more of Stack’s insight on proposed IDR changes, look for an upcoming Voices in Healthcare Finance podcast episode due out the week of Nov. 6.)

The proposed rule does strive to improve the 30-business-day negotiating period that precedes IDR adjudication. For example, the regulations would require the non-initiating party (i.e., the insurer) to respond in writing and with supporting documentation by the 15th business day of the period. This step “would help ensure that parties are responding to open negotiation notices and engaging with one another during the open negotiation period,” the proposed rule states.

In need of an overhaul

The dispute backlog in the IDR portal was estimated at more than 225,000 in the spring and no doubt has grown considerably since, especially with the portal closed for much of August and September while the Departments of Health and Human Services, Labor and Treasury made adjustments in response to litigation outcomes. In fact, processing of batched disputes and air ambulance disputes remained on hold as of Nov. 2.

The proposed rule aims to streamline and improve various steps of the process, including by making it easier to determine whether a dispute is eligible for the process in the first place. Among numerous other provisions of note, the rule would affect:

Provider-payer communications

Insurers would have to include specified claim adjustment reason codes (CARCs) and remittance advice remark codes (RARCs) in responses to payment claims from out-of-network providers. Communication of such codes would give providers “more accessible information to determine whether they may initiate open negotiation and the federal IDR process,” the proposed rule states.

Provider representatives attending Thursday’s call commended the idea but said its effectiveness will hinge on whether insurers are compelled to comply. A general issue with enforcement, the CMS official said in response, is that with jurisdiction by three different departments and additional variation based on plan type (e.g., self-insured or fully insured), it can be hard to definitively say how enforcement of a widespread issue would be conducted.

Another note that came up during the call was the difficulty payers have faced in transmitting QPA-related and other required information in a HIPAA-mandated electronic format. The CMS official said CARCs and RARCs are incorporated in the ASC X12 835 standard and thus can serve as mechanisms to transmit information about whether the IDR process is applicable to particular items and services.

Eligibility determinations

The rule includes deadlines of five business days for parties to submit eligibility information to arbitrators upon request and for arbitrators to rule on a case’s eligibility. The hope is that the time constraints will help speed more cases through the portal.

For eligibility determinations, a five-business-day deadline is longer than the current three-day deadline. The intention is to be stricter with enforcement, however, given that various other provisions are designed to keep the entire IDR process moving better. As is, eligibility reviews tend to take significantly longer than five days — much less three — due to the case backlog.

One key change would allow the federal departments to make eligibility determinations during extenuating circumstances such as a sustained disruption to the arbitration portal. The portal shutdown for the better part of August and September likely would have qualified as such a scenario. Currently, only arbitrators can rule on case eligibility.


The rule would allow for a greater array of services to be batched but would limit batched disputes to 25 items. Disputes going forward could be batched in the instances of:

  • A single patient encounter
  • Items and services billed under the same service code or a comparable code under a different procedural code system
  • Anesthesiology, radiology, pathology and lab items and services billed under service codes belonging to the same Category I CPT code section, as specified in federal guidance

During Thursday’s call, a radiology practice representative noted practices might have “a hundred or a thousand chest x-rays” that should be batched but would be ineligible under the 25-item cap.

The proposed rule explains the 25-item limit in part by stating, “Many certified IDR entities stated that batched determinations with more than 25 line items would be difficult to render payment determinations within the 30-business-day period if the departments proposed additional batching flexibilities.”

Administrative fee

A separate proposed rule issued in September established the fee for 2024 at $150 per party to a single or batched case. The federal departments are considering stakeholder feedback before publishing the final rule in December.

The October proposed rule would pave the way for additional adjustments in expense calculation starting in 2025. The calculation would change from the projected number of disputes to be closed to, instead, the projected number of disputes to be initiated. The federal departments say the rationale is a change in the proposed rule that would shift fee collection to an earlier stage of the IDR process.

However, with other changes that would streamline the IDR process and thus affect inputs in the fee methodology, the projected fee for 2024 would remain $150 if the updated methodology were in place next year.

Fees would be reduced in several scenarios. For example, the fee for both parties would be cut in half for designated low-dollar disputes. Low-dollar disputes generally refer to those in which the initial payment offer is less than the amount of the full administrative fee.

And for non-initiating parties (generally insurers) in cases ultimately deemed ineligible for arbitration, the fee would be cut by 80%.

Comments on the regulations are due within 60 days of the rule’s publication in the Federal Register, which was scheduled for Nov. 3 (search for CMS-9897-P at A CMS fact sheet summarizes the key provisions of the rule.


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