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Federal Agencies Provide an Independent Dispute Resolution Checklist

The IRS, DOL, and Treasury Department (the Departments) issued a checklist to help employers and insurers better understand their No Surprises Act compliance responsibilities.

The checklist specifically focuses on the independent dispute resolution (IDR) process. The Departments issued the checklist in response to a flood of questions and complaints on how employers and insurers should comply with initial payment, notice of denial requirements, and how and when to provide information on the open negotiation period. The checklist is separated into specific categories in the hopes that it will clarify these requirements.

What is the Independent Dispute Resolution?

As a reminder, the No Surprises Act is an attempt to “protect participants, beneficiaries, and enrollees in group health plans and group and individual health insurance coverage from surprise medical bills when they receive emergency services, non-emergency services from nonparticipating providers at participating facilities, and air ambulance services from nonparticipating providers of air ambulance services, under certain circumstances.”

One of the major provisions of the first interim private rule was changing the way billing is determined when a consumer has to pay an out-of-network provider or facility. Under the first rule, the total amount a consumer will pay to an out-of-network provider or facility will be determined an All-Payer Model Agreement (APM) under Section 1115A of the Social Security Act. Some states, such as Maryland and Pennsylvania, already have APMs in place. For states that do not, the amount charged will be based on state law.

If there is no APM or applicable state law, the patient will be billed an amount agreed upon by the plan and the provider or facility. If none of the preceding apply, the amount will be determined by an independent dispute resolution entity (IDR).

An IDR can only be selected after a 30-day “open negotiation” to attempt to resolve the dispute. If the plan and provider or facility cannot agree upon a payment rate, the parties must then jointly select a certified IDR. If the parties cannot agree on an IDR, the Departments will select one for them. After receiving each parties’ proposals and supporting documentation, the IDR will select one of the parties’ offers and issue a binding determination. Each party is required to pay a $50 administrative fee. However, the losing party is responsible to pay the IDR’s fee for adjudicating the dispute.

The negotiation and IDR deadline will follow the timeline below:

Independent Dispute Resolution Action Timeline
Initiate 30-business-day open negotiation period 30 business days, starting on the day of initial payment or notice of denial of payment
Initiate IDR process following failed open negotiation 4 business days, starting the business day after the open negotiation period ends
Mutual agreement on certified IDR 3 business days after the IDR initiation date
Departments select certified IDR if parties cannot agree 6 business days after the IDR initiation date
Submit payment offers and additional information to the IDR 10 business days after the date of the IDR selection
Payment determination made 30 business days after the date of the IDR section
Payment submitted to applicable party 30 days after the payment determination

When making a decision, the IDR must presume that the qualifying payment amount (QPA) is the appropriate amount. Typically, a QPA is the plan’s median contracted rate. Parties are allowed to submit other information as allowed by statute, but the credibility of the information is determined by the IDR. Generally speaking, the IDR will select the offer that is closest to the QPA. If they do not, the decision must be based on information that “must clearly demonstrate the value of the item or service is materially different from the QPA.”

IDR’s will be required to submit monthly reports. The Departments will use those monthly reports to issue quarterly public reports on payment determinations. If you are interested on how CDR’s become certified by the Departments, check out the Center for Medicare & Medicaid Services (CMS) website.

Employers and insurers are encouraged to review the checklist and adjust their compliance procedures accordingly. The Department of Health and Human Services has also provided a portal to help individuals start a dispute and guide them through the process.

If you have more questions, contact your OneDigital consultant. For more information on how to ensure your organization remains compliant, visit OneDigital’s Compliance Confidence page.