A new survey conducted by AHIP and the Blue Cross Blue Shield Association (BCBSA) finds that the federal Independent Dispute Resolution (IDR) process created under the No Surprises Act is flawed and needs an overhaul.
The No Surprises Act protects patients from unexpected medical bills for emergency services, air ambulance services, or services from out-of-network providers at in-network facilities. It also established the IDR process for providers and payers to resolve disputes for qualified items or services.
Although the law has successfully protected patients from nearly 20 million potential surprise bills in 2024, AHIP and BCBSA claim that their new survey shows that the current IDR process is broken due to inefficiencies, misaligned incentives, and inadequate accountability.
RELATED: CMS report reveals thousands of No Surprises Act complaints, enforcement efforts
Twenty-five health plans covering 154 million commercial enrollees, or 71 percent of the total commercial market, responded to the nationwide survey on surprise billing and IDR process. The survey data reveals that nearly 40 percent of disputes submitted to IDR were identified as ineligible, yet many still advanced through arbitration, ultimately forcing employers and health plans to pay unnecessary claims.
AHIP and BCBSA said there is no path for health plans to appeal or even review eligibility or payment determinations, which gives IDR unchecked authority to mandate payments from health plans beyond the scope of the law even if the claim should never have been submitted. They claim some providers have exploited the process and flooded the IDR with ineligible disputes to secure higher payments.
When the IDR was established, the Centers for Medicare & Medicaid Services estimated that it would resolve 17,000 disputes each year. Within months after the system launched in 2022, 190,000 disputes were filed, more than 10 times the number expected for the first full year, noted analysts from Georgetown University’s Center on Health Insurance Reforms in a recent article for Health Affairs Forefront. They estimated that systemic flaws with arbitration and misuse of the process have led to $5 billion in wasteful spending.
“On average, the IDR process resulted in payments 400 percent above and as high as 10 thousand percent above contracted rates—with many instances far exceeding that amount,” said BCBSA President and CEO Kim Keck in an announcement. “Unchecked, these wasteful practices drive up everyone’s premiums. It's time to restore balance and transparency to this process.”
AHIP and BCBSA said that without reform, the continued growth in IDR volume, especially for ineligible claims, threatens to drive higher premiums and undermine network stability. To reduce waste, fraud, and abuse, they call for clearer eligibility standards, improved regulatory oversight and accountability, realigned incentives through required fees, stronger screening at the front end, and improved IDR operations.
Last month the Departments of Health and Human Services, Labor, and the Treasury issued a report noting that the annual volume of complaints to the IDR is now more than 100 times the initial projection. While the volume shows the magnitude of surprise billing, the influx of request has created a serious capacity issue. The federal agencies said they were working to improve capacity and clear the backlog of disputes. In July, the departments took steps to streamline operations and enhance the quality of data it uses to determine dispute eligibility. "These updates seek to eliminate ineligible disputes and transform the IDR experience for both payers and providers," they said.