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Federal Departments Release New Proposed Rule on No Surprises Act IDR Process

Federal Departments Release New Proposed Rule on No Surprises Act IDR Process

On October 27, 2023, the U.S. Departments of Health and Human Services, Labor, and the Treasury (the Departments) and the Office of Personnel Management released a proposed rule on the No Surprises Act’s federal independent dispute resolution (IDR) process. The first iteration of the No Surprises Act regulations went into effect almost two years ago on January 1, 2022. The intent of the law was to protect patients from surprise medical bills and increase transparency for out-of-pocket costs of care between providers and patients.

Multiple lawsuits, including amicus briefs signed by the AAO-HNS, have been filed concerning the flawed implementation of this law. The core concern of many of these suits has been the Administration’s failure to implement this law according to Congressional intent, which has resulted in an unbalanced, costly, and inefficient process. This most recent proposed rule is partly an attempt to address some of these concerns. The proposed rule would make the following changes to the IDR process:

  • The Departments are encouraging the disputing parties to engage in an open negotiation prior to initiating the IDR process. This has always technically been a requirement, but this rule attempts to centralize the process in the portal and provide more clarity to both parties. Specifically, the rule would require that payers provide additional information at the time of initial payment or notice of denial of payment, including the legal business name of the plan or issuer, the legal business name of the plan sponsor, and its IDR registration number. These proposed changes would facilitate communication between parties prior to and during open negotiation and reduce the number of ineligible payment disputes submitted to the Federal IDR process. Also, the rule would set strict deadlines for both parties to submit necessary notices and information to the portal during the open negotiation process.
  • In an effort to streamline the time and resource intensive process, the rule would implement a departmental eligibility review process which could be enacted when dispute volume is high. Specifically, the rule would require certified IDR entities to determine eligibility within five business days of final certified IDR entity selection and notify both disputing parties and the Departments.
  • One of physicians’ key criticisms regarding the IDR process is the practical inability to batch claims. This rule would allow disputing parties to group IDR items and services together, in order to maximize efficiency and minimize cost. The proposed rule would allow the following items to be batched: 1) Items and services furnished to a single patient on one or more consecutive days and billed as a single claim form or encounter, 2) items and services billed under the same service code or a comparable code under a different procedural code system, and 3) anesthesiology, radiology, pathology, and laboratory items and services billed under service codes belonging to the same CPT code section. HHS proposes limiting the batched determinations to 25 in a single dispute.
  • Physician groups, including the AAO-HNS, also expressed concern over the costly administrative fee required to participate in the IDR process, after the Administration raised it from $50 to $350. Following a recent court ruling which found that the Administration made that change improperly, HHS temporarily lowered the fee to $150. The proposed rule would officially set the administrative fee at $150 per entity, effective January 1, 2024. This still represents a 300% increase from the initial level of $50.
  • The rule would also have the disputing parties pay their administrative fees directly to HHS, as opposed to having the IDR entities collect these fees on HHS’s behalf. The rule also would impose a two-day time limit for each side to pay their fees, in an effort to move the process along in a timely manner.

Once this proposed rule is published in the Federal Register on November 3rd, comments may be submitted for up to 60 days. The AAO-HNS plans to submit comments by the deadline.

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