Health Plan Payment and Reimbursement

New data shows providers continuing to win most No Surprises Act independent dispute resolution cases

The federal departments overseeing the application of the law continue to grapple with case volumes that have dwarfed initial expectations.

February 21, 2024 12:48 pm

Providers won a large majority of disputes initiated during the first half of 2023 through the No Surprises Act’s arbitration portal for adjudicating out-of-network payments, according to newly published data.

HHS and the U.S. Departments of Labor and Treasury released public-use files (available to download here under “2023 Reporting Year”) showing the outcome of every dispute decided in the independent dispute resolution (IDR) portal from January through June. In a summary report, the departments wrote that providers (including air ambulance providers) prevailed in 77% of the nearly 84,000 disputes in which a decision was rendered.

The results indicate certified IDR entities (i.e., arbitrators) frequently considered insurers’ offers, which typically were linked to the qualifying payment amount (QPA) for the item or service in question, to be inequitable. The arbitration is “baseball style,” meaning the IDR entity has to select one side’s offer as opposed to seeking a compromise.

A previous report examined data over a 50-week stretch ending March 31, 2023, and found providers had won 71% of cases.

Of the decisions covered in the latest report, 58% were for cases involving emergency department services. The next highest category was radiology, at 17%.

The amounts offered by providers in IDR cases typically were benchmarked to past in-network rates (in some cases, contracted rates with a different health plan than the one in the dispute) or to past out-of-network payment amounts, according to the report. More than 80% of the decisions established an amount that was higher than the QPA, which is based on the insurer’s median in-network rate for a given item or service in the particular market.

A steady flood of cases

Through the first half of the year, nearly 289,000 disputes were initiated in the portal.

“The first six months of 2023 were characterized by a large volume of disputes submitted through the federal IDR portal and substantial complexity in determining whether disputes were eligible for the federal IDR process,” the new report states.

The departments previously noted that the 2022 volume was way higher than they had anticipated; the volume subsequently increased in Q1 2023 (by 24%) and again in Q2 (12%). Per their previously published estimates, the departments expected the IDR portal would be utilized for about 22,000 cases a year when including air ambulance bills.

“The top three initiating parties (SCP Health, Team Health and Radiology Partners) represent thousands of clinicians across multiple states and accounted for approximately 58% of all disputes submitted in the first six months of 2023,” the report states.

In forums with CMS, providers have expressed frustration at payer conduct with respect to the No Surprises Act, including the complaint that insurers do not always deliver upfront information about QPAs as required. Providers then must initiate the IDR process just to get details on the QPA.

On the bright side for providers, a vendor’s recent report suggests a potential benefit from the No Surprises Act is an increase in contracting opportunities. After analyzing its national database of commercial insurance claims, FAIR Health reported that in-network care as a percentage of claim lines increased from 84.1% in Q1 2019 to 90% in Q3 2023.

A causal relationship was not specified, but the jump was especially notable (2.3%) from Q4 2021 to Q1 2022. Early 2022 was the start of implementation of the No Surprises Act.

Striving to break the logjam

“Certified IDR entities have scaled up their operations to address the high volume of disputes,” the departments wrote in the new report, noting that the number of determinations made during the first half of 2023 was quintuple the amount made over the portal’s 8 ½ months of operation in 2022.

Observations since the portal opened have pinpointed the root causes of the case backlog.

“The primary cause of delays in processing disputes is the complexity of determining whether disputes are eligible for the federal IDR process,” the departments wrote. “During the first six months of 2023, non-initiating parties challenged the eligibility of 106,038 disputes. Even when the non-initiating party does not challenge the eligibility of a dispute, the certified IDR entity must still review the dispute and confirm that it is eligible before the dispute can proceed in the federal IDR process. These reviews involve complex eligibility determinations that require certified IDR entities to expend considerable time and resources.”

The hope is that changes previously made to the dispute initiation form to require specific information from the parties will allow eligibility decisions to be made more efficiently. The departments said there was a big decrease between 2022 and the first half of 2023 in the percentage of closed disputes that had been deemed ineligible.

Farther-reaching changes to the IDR process are on the way, with the pending release of a final rule designed to improve operations. The proposed rule included insurer requirements related to the disclosure of information with the initial payment or denial of payment, among other updates.

The courts weigh in

Lawsuits that were decided in 2022 and 2023 have made the IDR landscape more favorable to providers. The Texas Medical Association won four cases in federal court during that span, with the first two requiring certified IDR entities to give increased weight to specific factors other than the QPA when deciding cases. The second of the two decisions is under appeal, with arguments having taken place in early February at the U.S. Court of Appeals for the Fifth Circuit.

Last August, the TMA won the third and fourth cases, one of which was about the administrative fee, which had been raised from $50 to $350 per IDR case without a notice-and-comment period. In the wake of the court decision, the fee for 2024 was set at $115 following a notice-and-comment period.

The other case involved the guidelines for how insurers calculate QPAs. The departments have stated their intention to appeal that decision.

While the appeal plays out, “plans and issuers are expected to calculate QPAs using a good-faith, reasonable interpretation of the applicable statutes and regulations that remain in effect” after the lower-court decision, the departments wrote in October guidance. But for items and services furnished before May 1, 2024, the departments said they would relax enforcement of the requirement to recalculate QPAs, citing the heavy lift that’s required.

The new report does not cover the second half of 2023, when the portal was partially or fully closed for long stretches while the departments made changes after losing the lawsuits about the administrative fee and QPA calculation. The reported case volume thus will be vastly lower during that time frame but can be expected to surge to unprecedented levels during the first half of 2024 as the mounting backlog is addressed.


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