Intensifying federal government oversight on the issue of healthcare price transparency and involvement in the resolution of provider and insurer payment disputes suggests a growing need to arm group health plan sponsors and participants with the information they need to navigate the No Surprises Act Independent Dispute Resolution (IDR) process. While enforcement of the evolving legislative and regulatory landscape remains a concern, what is clear from the latest IDR Reports is the emergence of a vast underestimation in the number of cases being brought to arbitration.
We recently highlighted a significant disparity between the estimated amount of IDR cases and the actual amount of IDR cases initiated by providers, revealing that 334,828 disputes were initiated between April 15, 2022 and March 31, 2023. That’s nearly 20 times the 17,000 claims per year anticipated by the Centers for Medicare & Medicaid – and quite a disconnect. Delving further into the first half of last year, the 288,810 cases initiated were 13 times higher than projections for the entire year. They included 136,111 in the first quarter and 152,699 in the second quarter.
Given the overwhelming volume of complex and time-consuming payment-dispute reviews, the U.S. Departments of Health and Human Services, Labor and the Treasury have proposed streamlining the process for determining IDR process eligibility and speeding up payment determinations. They also anticipate increasing capacity of certified IDR entities to make the IDR process more efficient. Many of these parties involve large practice-management companies, medical practices or revenue cycle management companies.
A closer look at the statistics show that the 10 parties initiated as many as 78% of the cases, with SCP Health, Team Health and Radiology Partners accounting for as much as 58% of initiated disputes for the first six months of 2023. Interestingly enough, providers won 77% of IDR cases, while 82% of awards to the winning party was the offer closes to the qualifying payment amount. In addition, 22% of initiations were deemed ineligible. Certified IDR entities have been busy over the past two years, increasing payment determination output in each quarter compared to the prior quarter. In just in the first six months of 2023 they rendered more than five times the number of payment determinations made in all of 2022. This could be a result of the various starts and stops in the process created by Judge Kernodle’s Court decisions in the Texas Medical Association (TMA) cases I, II, III, and IV. Additionally, this information suggests that the IDR Entities are ignoring the decisions that have held each of the seven factors, including the QPA amount, are supposed to be considered equally. The other factors are less concrete than the QPA amount, for example factors like patient acuity, level of training and experience of the provider, and good faith efforts to enter into a network agreement.
Where all this statistical analysis may resonate most with health plan sponsors is that open negotiation and IDR procedures may trigger a new risk for those that apply reference-based pricing (RBP) to non-network providers or RBP plans that directly contract with providers and facilities. Such uses of RBP may allow for a calculation of a median in-network rate (a trigger for application of the IDR process). Single cases agreements are excluded. To avoid harmful exposure to the medical overbilling epidemic, we recommend adoption of a “pure” RBP plan that does not contract with providers and, therefore, avoids the IDR process based on the guidance received to date. In the absence of any out-of-network claims, direct-contracting fees or need to determine a median in-network rate, these plans will not be adversely affected by the NSA.
At the end of the day, we remain dedicated to empowering plan sponsors and participants, emphasizing the importance of enhanced education to navigate the IDR process and make informed healthcare decisions.
Value of a Medical Billing Partnership
To support annual enrollment and help manage plan design and administration, plan sponsors are benefiting from partnerships that provide them with insights through data-driven solutions. Real-time price information of the true cost of health care services enables sponsors and members to make the most advantageous cost-benefit decisions regarding enrollment options.
As your partner, aequum can help lower costs, achieve savings, enhance member experience and maximize your plan’s success in 2023/24 and beyond. Please contact us if you have any questions or need support.