The federal government has come up with a new proposal that will protect consumers against surprise billing while also addressing the controversy over the process for resolving surprise billing disputes. If finalized, the Departments of Health and Human Services (HHS), Labor, and the Treasury, along with the Office of Personnel Management (OPM) said it would improve communications, adjust timelines, set new batching criteria, and create a more efficient process.
The federal independent dispute resolution (IDR) process is a mechanism that providers, facilities, and health plans can use to resolve payment disputes for certain out-of-network charges. “This rule is the next step in ensuring we take patients out of the middle of billing disputes between insurers and health care providers,” said HHS Secretary Xavier Becerra in the announcement.
Under the proposal, payers must provide additional information at the time of initial payment or notice of denial of payment. They would also have to use standardized codes to communicate whether a claim for an item or service furnished by an out-of-network provider or facility is or is not subject to the law’s surprise billing provisions and the Federal IDR process. If approved as proposed, the government said the changes would benefit all disputing parties and reduce the number of ineligible disputes that are submitted to the IDR process.
The departments propose the following changes:
Open negotiation and IDR initiation: The Departments propose to centralize the open negotiation process through the federal IDR portal. It would require the party who chooses to initiate open negotiation to provide an open negotiation notice and a copy of the remittance advice or notice of denial of payment to the other party and the Departments through the Federal IDR portal. Currently, a party must contact the other party directly to initiate open negotiations, which has resulted in uncertainty as to whether open negotiation was ever properly initiated. The new process would also require information, such as the plan type, the location of service, and the claim number, to help parties identify the relevant item or service and whether the federal IDR process applies. The Departments also propose provisions that would help ensure parties respond to open negotiation notices and engage with one another during the open negotiation period.
IDR eligibility and administrative fee: The current process is problematic. Eligibility determinations are complex, time consuming, and resource-intensive and HHS noted that certified IDR entities are often uncompensated for such eligibility work. The delays in determining eligibility have impeded certified IDR entities’ ability to make timely payment determinations. Under the proposal, there would be a departmental eligibility review process to facilitate faster dispute processing. The law requires both parties in a dispute to pay a non-refundable administrative fee. To improve efficiency, the departments propose collecting the fee directly from the disputing parties and establishing consequences for failing to pay the fees on time. The proposal also suggests a reduced administrative fee structure and amounts for parties in low-dollar disputes as well as reduced fees for non-initiating parties in ineligible disputes.
Batching: The proposed rule would allow qualified IDR items and services to be batched in a single dispute to address the unique circumstances of certain medical specialties and provider types.
For more information, see the CMS fact sheet.