The federal government’s independent dispute resolution (IDR) process, aimed at resolving surprise billing disputes, faces a significant backlog with over 330,000 balance billing disputes filed—14 times more than anticipated. Initiating parties, mostly providers, have had a high success rate. Efforts are underway to address the backlog and improve eligibility determinations. Challenges with qualifying payment amounts and code batching persist.
An update from the federal government highlights a persistent backlog in the independent dispute resolution (IDR) process, responsible for resolving surprise billing disputes. Since the launch of the IDR process nearly a year ago under the No Surprises Act, an astonishing 330,000 balance billing disputes have been filed, nearly 14 times the initial expectations of the Departments of Health and Human Services (HHS), Labor, and the Treasury.
The latest status update published by CMS provides insights into initiated disputes, dispute eligibility, and payment determinations. Alongside confirming the ongoing backlog of IDR cases, the update reveals the high success rate of initiating parties, predominantly providers. From April 15, 2022, to March 31, 2023, certified IDR entities resolved payment determinations in 42,158 disputes, with initiating parties prevailing in about three-quarters of those cases.
A separate report focusing on the IDR caseload for the fourth quarter of 2022 indicates that practice management companies, medical practices, and revenue cycle management companies representing numerous individual providers or facilities filed the majority of cases. Furthermore, the caseload increased by 53 percent compared to the previous quarter.
The federal IDR process aims to address disputes related to surprise bills, typically involving out-of-network payments. The No Surprises Act prohibits such surprise bills in most scenarios where an out-of-network provider treats patients at in-network facilities.
The persistent backlog in the IDR process can be attributed to the need for additional outreach and analysis for disputes filed earlier in 2022, as certified IDR entities require extensive efforts to determine eligibility.
The status update reveals that non-initiating parties challenged the eligibility of 122,781 disputes within the first 50 weeks of the IDR process. Of the disputes closed during that period, approximately 39,890 were deemed ineligible for the federal IDR process.
Even if the non-initiating party does not challenge the dispute’s eligibility, certified IDR entities must review and confirm eligibility before proceeding further. These eligibility reviews involve complex determinations and require substantial time and resources.
To expedite eligibility determinations, the departments encourage both parties to provide all the necessary information during the initiation of the federal IDR process. Data elements have also been added to the dispute initiation form to ensure comprehensive information is provided for eligibility determinations. Parties are now advised to attach supporting or contesting documents for eligibility when initiating or challenging a dispute.
Given the high volume of disputes and the complexity of eligibility reviews, the departments are actively working to address the backlog and assist certified IDR entities in resolving disputes as swiftly as possible. They have engaged a contractor and additional government staff to conduct pre-eligibility reviews, offering outreach and technical assistance to support eligibility determinations. Additionally, the departments are exploring further policy and operational enhancements, including potential rulemaking, to improve the dispute eligibility determination process and expedite payment determinations by certified IDR entities.
In addition to the growing backlog, the federal IDR process has encountered various challenges. Providers have faced difficulties in understanding the qualifying payment amount (QPA), which is the median contracted rate for a specific service in the same region and a factor considered by certified IDR entities in making payment determinations. Providers argue that the weight given to the QPA by certified IDR entities favors payers. Moreover, issues related to code batching and bundling have led to confusion and complications within the process.