What’s the news?
For the fourth time in recent months, a Texas court has vacated portions of the rules governing the independent dispute resolution (IDR) process. This is the process by which health plans and out-of-network health care providers are required to resolve disputes over amounts due from plans on claims subject to the No Surprises Act (NSA). The result has been that, on August 25, 2023, the government announced that it was suspending all IDR process operations to make changes necessary to comply with the court’s rulings.
What does this mean for employers?
These rulings and subsequent suspension should not have an immediate impact on employers with fully insured plans. However, employers with self-insured plans should be alert to some potential adverse consequences.
- The financial impact of the ruling is likely to increase the amounts that plans will have pay on claims that go through the IDR process.
- The new rules may increase the administrative burden on TPAs that handle the IDR process which may also impact the amount they need to charge employers for their services.
- We know that as of now there is a large backlog of IDR claims, but we don’t know when new rules will be issued or when the suspension will be lifted. The consequent delay in payment of claims could have an impact on an employer’s stoploss coverage. This generally requires claims to paid by, or within a certain period after, the end of the policy year in order for the employer to be reimbursed.
Employers may wish to check with their TPAs and stoploss carriers for information on how these court decisions and the suspension of the IDR process will affect them.
Tell me more about the NSA and the IDR process…
The NSA prohibits out-of-network providers from balance billing patients for amounts over what their health plans pay in circumstances where the patient doesn’t have a meaningful opportunity to choose to receive services from an in-network provider. Instead, plans and providers are required to negotiate how much the plan will pay on the balance of the bill. If the parties are unable to reach an agreement, either party can initiate third-party arbitration through the IDR process.
The government created an elaborate set of rules governing the IDR process. In four separate lawsuits, an association of Texas health care providers challenged various aspects of the IDR process arguing that it did not comply with requirements of the NSA and unfairly weighted the process in favor of payors. They prevailed on most of their challenges.