A new federal rule aims to overhaul the No Surprises Act protocols, particularly as large volumes of disputes are pushed to arbitration.
The rule, finalized jointly by the Departments of Health and Human Services, Labor and Treasury as well as the Office of Personnel Management, would reduce the administrative fees on disputes from $115 to $15, which the feds argue will make it easier to participate while "maintaining a self-sustaining program."
The agencies will allow for multiple claims to be resolved in a batch, which would both lower costs and accelerate the resolution timetable, per an announcement from the Centers for Medicare & Medicaid Services.
CMS said that there are also plans to launch a new, centralized platform for monitoring disputes that make it to the independent dispute resolution (IDR) phase, called IDR Gateway. Using this tool, users can initiate a dispute, track the status of open cases and manage other activities in one spot.
The gateway is set to roll out in phases beginning this year, CMS said. Payers will be required to register, which will make it easier for providers to make sure they're identifying the right party and lower the risk for errors and unneeded disputes.
CMS said that, over time, additional features will be added, such as in-portal navigation, with the goal of reducing unnecessary filings.
The rule would also require payers to use standardized claims codes in communications about out-of-network care, making it easier for providers to identify whether a particular claim is eligible for IDR.
"We are cutting fees, improving transparency and restoring order to a system that was overwhelmed," said CMS Administrator Mehmet Oz, M.D., in the announcement. "This is about making government processes efficient, accountable and focused on results."
Far more claims were pushed to the IDR phase than the feds had initially anticipated in setting up the No Surprises Act process. The protocols were designed with the expectation that most disputes would be resolved through negotiations, in which payers are expected to offer a fair rate based on the median in-network cost for a service.
CMS said in the announcement that since April 2022, when the processes were established, there have been more than 5 million disputes sent to IDR.
Payers have roundly criticized this trend, citing data that show a small number of providers account for a large swath of disputes that reach IDR. And when cases are sent to arbitration, providers are overwhelmingly likely to win, and win big.
Recent data from Turquoise Health finds that 5.4 million disputes are initiated each year, with $1.2 billion in arbitration feeds generated annually. The typical award amount from IDR is 8.9 times the benchmark value set by insurers, Turquoise said.
And insurers' attempts to combat what they call IDR abuse haven't found significant success. This week, a federal judge in Texas tossed a lawsuit against HaloMD, one of the organizations cited most often in flooding IDR, that was filed by Blue Cross Blue Shield of Texas.
The ruling marked Halo's fourth court win in the last six weeks, according to an announcement from the company.
"Insurers engaged in similarly wasteful litigation should assess whether continuing to do so is an intelligent use of resources," said Justin Carangelo, general counsel and chief compliance officer of HaloMD, in the release.
Elevance Health's Anthem plans also implemented a controversial policy that charges hospitals a fee for using out-of-network providers, which has drawn outrage from the provider community. The California Hospital Association sued the insurer earlier this month to challenge the policy.
The policy was rolled out as a direct response to provider behavior in flooding the IDR process, executives told Fierce late last year.
Charlene MacDonald, CEO of the Federation of American Hospitals, praised today's regulations in a statement.
"By requiring clearer payment information, more meaningful engagement during negotiations, and stronger oversight of the IDR process, the final rule helps ensure the system works more fairly and efficiently," MacDonald said. "We look forward to continuing to work with the Administration to implement these regulations and ensure the law continues to protect patients while supporting a fair, transparent dispute resolution process."
Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association, echoed the sentiment, saying that the changes would ease "significant administrative and financial burdens on medical groups seeking to resolve out-of-network payment disputes."
The group said it is committed to working alongside regulators to continue to refine the IDR process.
"We will continue to analyze the full rule in the days ahead, but MGMA is encouraged by these commonsense reforms," said Gilberg.
L. Anthony Cirillo, M.D., president of the American College of Emergency Physicians, also praised changes in the rule, and said its "overall success will now depend on strong, consistent enforcement, and meaningful consequences for noncompliance."
Payers, by comparison, were less enthused about the regulation.
"While the focus on addressing flawed incentives in the IDR process is a significant first step, more action is needed to protect Americans from unconscionable price gouging by some PE-backed providers and IDR middlemen," said AHIP Spokesperson Chris Bond.
James Gelfand, president and CEO of the ERISA Industry Committee (ERIC), said the rule was "a missed opportunity to restore the balance" between payers and providers Congress intended with the No Surprises Act.
"Without stronger guardrails and more meaningful reforms, the gaming by providers of a flawed arbitration process will continue as evidenced by the unfair and unrealistically inflated provider charges employers are seeing come through the current IDR process at a breakneck speed, and without any opportunity to appeal," Gelfand said.