A facility or provider can initiate the federal independent dispute resolution (IDR) process, or depending upon their state, a CMS-approved, state-run dispute resolution process if it thinks the amount remitted by an out-of-network payor is insufficient.
The federal IDR contains several stages. CMS offers extensive guidance here for disputing parties.
STAGE 1: Open Negotiation Period
Before initiating the federal IDR process, disputing parties must initiate an open negotiation period within 30 business days of claim payment or denial to determine an agreed upon out-of-network rate. The Department of Health and Human Services, the Department of Labor and the Department of the Treasury have issued a standard notice form that parties must use.
STAGE 2: IDR Process Initiation
If the parties can’t agree on payment during the 30-day negotiation period, the provider, facility, plan or coverage can start the process during the 4-day period after the open negotiation period (31-35 days from initial payment or denial). A federal IDR portal is available here.
STAGE 3: Certified Dispute Resolution Entity Selection
The initiating party will name a preferred certified IDR entity in the notice. The other party may agree or object to the selection within three business days.
STAGE 4: Offers Submission
Offers and additional information are due 10 business days after the date of the IDR entity selection. The parties must submit:
- Their offers of payment along with supporting documentation
- Information requested by the IDR entity
- The size of their practice or facilities at the time the information is submitted
- The practice or specialty type (if applicable)
STAGE 5: IDR Decision
The IDR entity will issue a binding determination selecting one of the parties’ offers as the appropriate OON payment amount using the criteria below. Determination of payment will be made within 30 business days of the decision.
- Default requirement is to begin with the presumption that the Qualifying Payment Amount (QPA) is the appropriate out-of-network amount.
- The IDR entity must select the offer closest to the QPA unless it feels credible information from either party clearly demonstrates the QPA is materially different from the OON rate.
- Additional information submitted by the parties must be treated as credible.
- For the IDR entity to deviate from the offer closest to the QPA, any information submitted must clearly demonstrate the value of the item or service is materially different from the QPA.
Carefully review the criteria the entity considers when determining what kind of evidence to produce showing insufficient payment. These criteria include:
- Level of training, experience and quality and outcomes measurements of the provider or facility that furnished the qualified IDR item or service
- Market share held by the provider or facility or the plan in the geographic region where the item or service was provided
- Acuity of the participant or beneficiary receiving the item or service or the complexity of delivering the item or service to the participant or beneficiary.
- Teaching status, case mix and scope of services of the facility, if applicable.
- Demonstration of good faith efforts (or lack thereof) made by the provider or facility or the plan to enter into network agreements with each other
- If applicable, contracted rates between the provider or facility and the plan during the previous four plan years
STAGE 6: Payment to Applicable Party
- The payment will be made according to the IDR entity’s decision within 30 calendar days.
Both parties must pay an administrative fee ($50 each for 2022) and an IDR entity fee (determined by the entity). Payment for these fees can be made in the portal. Within 30 days of determination, the prevailing party will receive a refund of the IDR entity fee while the other party will not.
Navigating the NSA IDR process presents several challenges. Primary among these is identifying underpayments in a timely manner for dispute and which claims have a higher likelihood of successful outcomes through the federal IDR process based on the factors the IDR entity must consider in making its decision. Facilities would need to focus on claims from OON payors that carry a 450-revenue code.
Also, multiple qualified claims may be considered as part of a single IDR determination in what is called “batching” when it involves the same facility, the same payor, the same or similar items or services and the qualified IDR items and services were furnished within the same 30-business-day period.
Facilities and providers should consult with their legal representation to determine if their state has dispute requirements and processes that differ from the NSA, as the NSA does allow for states to be the primary enforcers of the law.
An encouraging note is that some state processes predate the NSA and steps should already be in place operationally to engage in them. Many states have retained their specific dispute resolution processes. For examples, such as Florida, see CMS guidance here.
Lastly, it should be noted the IDR process heavily favors payors. Parties should review the potential ROI prior to engaging in IDR.
To learn more about complying with No Surprises Act operational requirements, read The Nuances of Operational Compliance Under the No Surprises Act.
These materials are for general informational purposes only. These materials do not, and are not intended to, constitute legal or compliance advice, and you should not act or refrain from acting based on any information provided in these materials. Neither Ensemble Health Partners, nor any of its employees, are your lawyers. Please consult with your own legal counsel or compliance professional in regard to specific legal or compliance questions you have.