Primer on the Federal IDR Process for Surprise Medical Billing

Background

On December 20, 2020, the No Surprises Act (NSA), part of the Consolidated Appropriations Act, 2021, was enacted to address surprise billing. The NSA established federal surprise billing requirements with respect to out-of-network emergency services, out of-network non-emergency services provided during a visit at an in-network facility and out of-network air ambulance services. In these instances, and for plan years beginning on or after January 1, 2022, the NSA generally limits the amounts consumers pay for care and specifies a procedure used to determine how much group health plans and insurers must pay providers for care, including the use of an Independent Dispute Resolution (IDR) process. Outcomes can vary depending on the type of service disputed, with some services seeing higher awards than others.
 

How Do You Engage in the IDR Process?

Under the current rules, the group health plan must make an initial payment (or notice of denial of payment) to the out-of- network provider for services rendered, after which either party may initiate open negotiations to attempt to reach a mutually agreed on payment amount for services. If negotiations are unsuccessful, the parties may use the IDR process which is a “baseball-style” arbitration wherein the arbiter will choose one of the final reimbursement offers submitted by either the provider or the payor with the arbiter’s decision deemed binding.

If negotiations fail, either party can elect to enter into the IDR. There are six fundamental steps for this process:

1. To initiate the IDR process, the party must submit written notice using the federal form (see the link on the right).
2. The parties have 10 days to choose a certified IDR entity and each submit their proposed payment amount.
3. If the parties involved reach a settlement on their own once the review has commenced, the parties must each pay half of the IDR entity fee unless they otherwise agree to allocate the fee.
4. The IDR entity selects one of the two offers within 30 business days.
5. The IDR entity notifies the parties in a written decision.
6. Once the certified IDR entity selects an offer, the plan has 30 days to make any additional payments.
   
   

Important Timeline for IDR Process

• OON provider/facility has 30 days to negotiate the OON [payment or denial]
• If unsuccessful, the IDR process can be initiated
• Parties have 3 days to jointly select an Independent Dispute Resolution Entity (IDRE)
• Within 10 days time, each party submits an offer
• Within 30 days, the IDRE chooses an offer
• Payor must pay the provider or facility within 30 days

Helpful Resources

• IDR Initiation Form – Notice of IDR Initiation (dol.gov)
• IDR Guidance for Parties – Federal Independent Dispute Resolution (IDR) Process (cms.gov)
• Certified IDR Entities – List of certified organizations | CMS

This Compliance Overview is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice. © 2021 Society of Professional Benefit Administrators. All rights reserved.