This year, the CMS has frequently halted and resumed arbitration due to court cases causing disruptions in the regulatory process aimed at settling surprise billing disputes.
Summary Overview:
Last Friday, the CMS finalized its revamp of the No Surprises Act resolution process, fully reopening the portal for resolving disputes, including batched and single disputes for air ambulance services.
- Throughout the year, the agency has gradually reinstated dispute resolution services following repeated pauses in the IDR process triggered by lawsuits from a Texas provider group.
- The latest suspension in arbitrations probably led to procedural delays and a rise in the backlog of disputes, as highlighted in a recent report by the Government Accountability Office, which characterized the rollout of the IDR process as “challenging.”
Insight Analysis:
The No Surprises Act, effective since January 2022, aims to shield patients from unexpected bills when treated by out-of-network providers in in-network facilities.
Initially designed to simplify payment disputes between insurers and providers, the process involves submitting payment offers to an arbiter, who then selects a final amount using a baseball-style arbitration process.
However, since the NSA’s implementation, stakeholders such as IDR entities, providers, and insurers have reported significant challenges. The dispute portal has been overwhelmed by claims, facing multiple pauses due to legal challenges.
Initially projecting around 22,000 disputes in 2022, the government actually received nearly 490,000 from April 2022 through June 2023, leading to increased backlogs and delays in determining payments, as detailed in the GAO report.
By June 2023, approximately 61% of disputes submitted since April 2022 remained unresolved, as outlined by the office. Even upon receiving judgments, parties conveyed struggles in obtaining payments, as reported to the GAO. In a specific instance, less than 10% of disputes from an initiating party were resolved, with only 3% being both resolved and paid.
Providers raised concerns about the IDR process, leading to multiple pauses and exacerbating the existing backlogs, prompting lawsuits against the government. Spearheaded by the Texas Medical Association, these legal actions cited issues such as administrative fees, claim batching restrictions, and the definition of qualifying payment amounts, alleging favoritism towards insurers over providers in the resolution process. Courts have consistently sided with providers, including a recent ruling in August.
In October, the Biden administration proposed adjustments aimed at streamlining the IDR process and alleviating backlogs. The suggested rule emphasizes increased transparency and negotiations between parties, aiming to reduce the submission of disputes to IDR that do not qualify for the process.