Insights and Key Takeaways from SIIA’s Price Transparency Forum: Navigating the Federal IDR Process and the Implications of the J&J Litigation

This year’s Self-Insurance Institute of America (SIIA) Price Transparency Forum served as a vital platform for industry leaders to discuss the importance of transparency and navigating complex issues. During the event, presenters and attendees examined key issues, providing insights and key takeaways, particularly around the Federal IDR Process and the J&J litigation.

The Federal Independent Dispute Resolution (IDR) Process has become a cornerstone (but overutilized) process to address disputes over out-of-network healthcare charges under the No Surprises Act. This process enables insurers and healthcare providers to resolve payment disagreements through baseball style arbitration rather than litigation, protecting patients from surprise medical bills.

Outcomes from Arbitrations: A Mixed Bag

Data from 2023 indicates a high volume of disputes handled through the federal IDR process. Between January 1 and June 30, 2023, an astounding 288,810 disputes were initiated via the federal portal. Notably, the top ten parties, primarily large practice management and revenue cycle management companies, represented 78% of these disputes.

Despite overall statistics showing that providers are winning 77% of the time, members of the Self-Insurance Institute of America, Inc. (SIIA) report better outcomes. SIIA members attribute their success to better preparation and understanding of eligibility criteria, which has led to many claims being dismissed due to issues such as timeliness and claim type.

Enhancing the IDR Process

A primary challenge within the IDR process is the high rate of disputes being rejected due to eligibility issues. In the first half of 2023, 106,038 disputes had their eligibility challenged, highlighting the urgent need for better tracking and identification mechanisms.

To improve efficiency and transparency, several enhancements have been proposed, including submitting more comprehensive information through the federal portal, such as all Open Negotiation documents.

This would facilitate better tracking and management of claims, ensuring that both providers and insurers have access to all relevant documentation during the arbitration process.

Legal Challenges and Evolving Jurisprudence in the IDR Process

The IDR landscape has been further complicated by litigation brought by the Texas Medical Association.

Recent oral arguments before the Fifth Circuit Court of Appeals revolved around whether IDR entities should prioritize the Qualifying Payment Amount (QPA) before considering other factors and whether they could assume the credibility of the QPA. Judges also questioned the authority of agencies to determine how the QPA is calculated.

Adding to this complexity, enforcement litigation outcomes have varied. In the Middle District of Florida, the Court dismissed complaints for failure to state a claim, concluding that only a few components of the Federal Arbitration Act (FAA) applied and that IDR entities could not be sued.

In contrast, the Southern District of Texas held that an IDR entity could indeed be sued, despite only a few components of the FAA applying. This split in judicial decisions highlights the evolving and uncertain legal framework surrounding the IDR process, underscoring the need for continued legal clarity and consistency.

The J&J Lawsuit: A Lesson in Fiduciary Responsibility

The recent lawsuit involving Johnson & Johnson (J&J) highlighted the critical importance of fiduciary responsibilities. The case serves as a cautionary tale for all healthcare entities, emphasizing the need for strict adherence to fiduciary duties.

J&J’s legal troubles stemmed from failures in contract review and data management, highlighting the need for meticulous compliance practices.

Best Practices for Compliance

In light of the J&J case, several best practices for compliance were discussed. These include:

  • Thorough Contract Review: Regular reviews of all contracts to ensure compliance with fiduciary responsibilities.
  • Data Management: Ensuring all necessary data is accessible and well-managed, even when there are challenges in obtaining it.
  • Ongoing Education: Continuous education for staff on fiduciary duties and the importance of compliance.

Moving Forward: The Path to Improved Transparency and Accountability

Developments in the IDR process and lessons from the J&J lawsuit highlight the need for ongoing improvements in transparency and accountability within the healthcare sector. As SIIA members and other stakeholders continue to navigate these challenges, the focus must remain on refining processes and ensuring all parties are well-equipped to handle disputes effectively. By adopting best practices and staying informed about the latest legal and procedural developments, healthcare providers and insurers can better navigate this complex landscape.

aequum’s Role in the IDR Process

aequum LLC has been pivotal in advocating for plan participants and reducing costs within the IDR process.

With a strategic focus on protecting partners, clients and members against unreasonable medical charges, balance billing and overpayment, aequum has successfully resolved over 12,000 claims on behalf of 425 self-funded health plans, generating 97.2% savings since inception.

This dedication underscores aequum’s commitment to safeguarding plan participants and reducing employee dissatisfaction with healthcare plans.