CAA #16: Status of the IDR Process

The No Surprises Act (NSA) created a process intended to prevent patients from receiving surprise medical bills for services they might receive from out-of-network health care providers in circumstances where an individual is not reasonably able to choose to receive services from an in-network provider.

These include emergency medical treatment from out-of-network providers and certain treatment from out-of-network providers of ancillary services working at in network facilities.  It also includes air ambulance services furnished by out-of-network providers.

The Act created a process which required payors and providers to negotiate the payment that providers subject to the Act would receive.  If negotiations were unsuccessful, the Act permitted either side to initiate an independent dispute resolution (IDR) process to determine the amount of payment.  The final payment amount would be determined by a government-certified IDR entity.  In all cases, the patient would not be liable for any amount over the health plan’s regular cost-sharing requirements.

The government issued detailed regulations implementing the NSA, including provisions governing the operation of the IDR process.  Perhaps the most controversial aspect of the regulations dealt with the way the process treated what the NSA called the qualifying payment amount (QPA).

The statute defined the QPA for a given service as the payor’s median in-network rate for that service.  The regulations required the parties to submit a payment offer and the IDR entity was required to select the bid closest to the QPA unless the provider offered evidence that the QPA was not reflective of the true value of the service based on certain specified criteria.

  • Health care providers objected to the regulations on the grounds that they gave disproportionate weight to the QPA, a result that they claimed was inconsistent with the language of the NSA.
  • Multiple lawsuits were filed and on February 23, 2022, a federal district court in Texas found in favor of the providers and struck the regulation to the extent that it required IDR entities to use the QPA as the touchstone for their decisions.
  • The plaintiffs in the Texas case did not include any air ambulance service providers and consequently the court did not act on the regulations applicable to them. (A similar lawsuit brought by air ambulance providers is currently pending.)

The government took two actions in response to the decision of the Texas court.

  • It issued revised guidance on the operation of the IDR process. 
  • While the guidance retained the requirement that the IDR entity consider the QPA (which is expressly required by the NSA), it omitted any language suggesting that the IDR entity should give more weight to that factor than any other of the specified relevant factors.
  • Additionally, the government appealed the district court’s decision to the Fifth Circuit of Appeals. 
  • That appeal has been put on hold at the request of the government pending the issuance of new rules.

At present, federal agencies have revised their IDR process guides in response to the trial court’s decision and announced that the IDR Portal is open. Entities expecting to use the IDR process may therefore use what’s currently posted and await further guidance.

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