February 16, 2024

ACEP First Look: CMS Data on Federal IDR Process Under the No Surprises Act

This week, CMS released a significant amount of data and a new fact sheet on the federal independent dispute resolution (IDR) process under the No Surprises Act (NSA).

After initial review, there are a few summary points –

  1. CMS data shows providers winning 77% of the time in fair and independent arbitration process. Insurers are underpaying providers based on a Qualifying Payment Amount (QPA) formula that’s invalidated by Federal Courts. So, paying you less while charging patients and employers more.
  2. The data is a small subset of the total amount of out-of-network claims, and only those that went through the IDR process – but there are SO MANY claims that were never disputed.
  3. Only 10% of eligible claims are estimated to go through arbitration even though insurers are underpaying providers 100% of the time.
  4. Premiums have gone up consistently prior to NSA so suggesting it as cause for premium change is premature at best.
  5. Insurers continue to post record profits while premiums continue to increase - pre and post NSA.

Of particular note for EM - the data does show, broken out by specialty, that IDR awards are often significantly higher than the Qualifying Payment Amount (QPA). For many of us, that's probably not a huge surprise and makes intuitive sense from what we expected and have seen and heard.

ACEP is continuing its review and will have a more thorough update after a more extensive look.

A few more key takeaways:

  • The Departments are publishing information in a Federal IDR public use file (IDR PUF) and Federal IDR supplemental tables for the first and second quarter of 2023.
  • The majority of disputes were initiated by a small number of initiating parties or their representatives. The top 10 initiating parties represented approximately 78% of all disputes initiated in the first six months of 2023. Many of the top initiating parties are (or are represented by) large practice management companies, medical practices, or revenue cycle management companies representing hundreds of individual practices, providers, or facilities.
  • Certified IDR entities rendered 83,868 payment determinations in the first six months of 2023, more than five times the number of payment determinations made in all of 2022 (16,238).
  • Certified IDR entities made 26,741 payment determinations in the first quarter of 2023, 64% more than the prior quarter, and made 57,127 payment determinations in the second quarter of 2023, which was more than twice the number from the prior quarter. Certified IDR entities closed 134,036 disputes in the first six months of 2023.
  • Despite the increase in the number of payment determinations, due to the high volume of disputes initiated, there are disputing parties who are still awaiting eligibility and payment determinations.
    • The primary cause of delays in processing disputes is the complexity of determining whether disputes are eligible for the Federal IDR process.
    • During the first six months of 2023, non-initiating parties challenged the eligibility of 106,038 disputes.
    • Even when the non-initiating party does not challenge the eligibility of a dispute, the certified IDR entity must still review the dispute and confirm that it is eligible before the dispute can proceed in the Federal IDR process.
    • These reviews involve complex eligibility determinations that require certified IDR entities to expend considerable time and resources. Eligibility reviews conducted by certified IDR entities are processed more quickly when both parties provide all the required information at initiation.
  • The prevailing offer was higher than the qualifying payment amount (QPA) in approximately 82% of payment determinations.
  • Given that providers, facilities, or air ambulance service providers prevailed in the majority (77%) of payment determinations during this period, the median prevailing offer is often the offer from the provider, facility, or provider of air ambulance services.
  • Some providers, facilities, and air ambulance service providers benchmarked their offers to past in-network rates with either the disputing plan or issuer, or with a different health plan or issuer in the same state. Some providers, facilities, and air ambulance service providers benchmarked their offers to past OON payment amounts, including past OON payments made under a single case agreement with the disputing plan. Health plans and issuers often benchmarked their offers to the QPA.
  • Data from the KFF shows that since 1999, healthcare insurance premiums for families have increased every year, regardless of the NSA or even the global COVID pandemic. Premiums increase while provider reimbursement decreases, which just leads to insurance company record profits every year. Supporting source: Premiums and Worker Contributions Among Workers Covered by Employer-Sponsored Coverage, 1999-2023 | KFF
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