A much higher volume of out-of-network pay disputes were being filed and processed through the first half of 2024 than during the year preceding it, though cases remain concentrated among a small handful of states and large provider groups, according to an analysis of the most recent data released by the federal government.
The review of independent dispute resolution (IDR) cases, published in Health Affairs Forefront, outlined a continuation of plans’ low win rates: 14% of resolved cases in the first quarter of 2024 and 18% of resolved cases in the second quarter of 2024.
In cases where plans prevailed, the median prevailing offer amount was 105% of the qualifying payment amount (or the QPA, a price used during the arbitration process that is meant to represent the median amount an insurer would pay for a service in that region).
Similar to 2023, provider groups initiated the majority of IDR cases and tended to concentrate in a handful of states like Texas, Florida and Arizona. The amounts they won, however, appear to be escalating—while median prevailing provider offers ranged between 320% and 350% of QPA across 2023, they rose to 383% in the first quarter of 2024 and even higher to 447% in the second quarter of 2024.
The Georgetown University researchers who conducted the analysis characterized providers’ lopsided win rate and the broad gulf between proposed payments during disputes as a “disconnect between the two sides as they debate what constitutes a reasonable payment for [out-of-network] services.”
Amid providers’ greater share of wins, the researchers also noted that resolved cases “predominantly” came from a few large provider organizations that tended to have private equity backing.
About two-thirds of all the resolved cases came from Team Health, Radiology Partners, SCP Health, AGS Health and HaloMD, which tended to win most of their cases. The researchers underscored Radiology Partners’ significantly higher offer amounts during the first quarters of 2024 (631% and 610% of QPA), as well as the rise of third-party IDR services provider HaloMD, which rose from 1% of resolved disputes in 2023 to 10% of the second quarter's resolved disputes.
The rise of third-party IDR services is of uncertain benefit to the healthcare landscape, the researchers wrote. These “middleman organizations” could give greater access to smaller provider organizations that would be unable to shoulder the administrative burden of securing what they see as appropriate payments, they wrote, but they also could be driving a higher volume of cases that increases systemwide costs.
Additionally, the researchers called attention to “significant variation” among the entities tapped by the government to preside over the IDR arbitration process. Citing their analysis as well as “conversations with stakeholders,” they pointed to four IDR entities that ruled in favor of providers in more than 90% of their 2024 cases, and, on the other end of the spectrum, a single IDR entity that favored providers in only a third of its cases.
“Ideally, the overall decision-making pattern should be similar across all [IDR entities], so it will be important to understand why variations exist,” they wrote.
On the other hand, the researchers applauded the substantial rise in IDR cases being processed (about 587,000 in the first half of 2024 compared to 660,000 across 2023), though they acknowledged some of the difference may stem from multiple suspensions of the IDR portal in 2023 due to No Surprises Act litigation. The total number of entities certified by the Centers for Medicare & Medicaid Services to process these disputes recently increased to 15 (though two aren’t accepting disputes at this time).
Ongoing lawsuits spun up by both sides of the contest have added ambiguity to the IDR process, which the researchers noted could be contributing to the large number of cases—including cases later deemed ineligible—being filed.
Lawsuits arguing over the methodology for determining QPA have more often than not gone providers’ way, forcing pauses, enforcement discretion and changes to IDR entities’ guidance when deciding cases. Some insurers have also pushed back with lawsuits of their own, as was the case a few weeks back when Elevance’s Blue Cross Blue Shield Healthcare Plan of Georgia alleged groups like HaloMD are gaming the system.
“The high volume of IDR cases, including the prevalence of ineligible cases, could be tempered if proposed rules for process improvements were finalized and if ongoing litigation over the QPA methodology was resolved,” researchers wrote. “Better education, training and oversight of IDR entity decision-making might also help reduce some of the uncertainties in the process.”
Broader questions such as the IDR process and how providers’ higher win rates are affecting healthcare costs for the system and patients remain unanswered, they added.