CMS Updates Guidance for Independent Dispute Resolution Entities

April 20, 2022 - CMS has updated its surprise billing guidance to require independent dispute resolution (IDR) entities to consider more than just the qualifying payment amount (QPA) when determining reimbursement amounts for out-of-network services under the No Surprises Act.

The Biden administration announced the interim final rule on surprise billing in September 2021. The rule detailed the arbitration process when payers and providers cannot agree on an out-of-network reimbursement rate following a surprise medical bill.

During the process, an independent dispute resolution entity determines the final reimbursement rate for the treatment or service.

The rule has faced significant pushback from hospital groups since its introduction.

The American Hospital Association (AHA) and the American Medical Association (AMA) have maintained that the interim final rule placed too much emphasis on the QPA as a determining factor. The No Surprises Act states that IDR entities should consider several different factors when determining a reimbursement rate.

The revised guidance from CMS addresses these concerns. It states that IDR entities must consider the QPA—the payer’s median contracted rate for the service—and other information that either party submits or the IDR entity requests.

For non-air ambulance items and services, additional factors include:

• the provider’s level of training, experience, quality, and outcomes measurements
• the provider’s regional market share
• the acuity of the individual who received the item or service, or the complexity of providing the service
• the teaching status, case mix, and scope of services that the provider or facility offers
• demonstration of good faith efforts, or lack of efforts, from the provider and payer to enter into network agreements

For air ambulance services, IDR entities should consider:

• the provider’s quality and outcomes measurements
• the acuity of the individual who received the service
• the training, experience, and quality level of the medical personnel
• the air ambulance vehicle type, including the vehicle’s clinical capability level
• the population density of the pick-up location
• the demonstration of good faith efforts, or lack of efforts, from participating parties to enter into network agreements

The guidance also stated that IDR entities may not consider usual and customary charges for the service, the amount that providers would have billed without the No Surprises Act provisions, or the reimbursement rate for the service by public payers.

The CMS guidance noted that it is not the IDR entity’s responsibility to determine whether the QPA is correct, make determinations of medical necessity, or review coverage denials.

The updated information comes after a federal judge in Texas ruled in favor of the Texas Medical Association (TMA) and determined that the IDR provisions in the interim final rule violated the policies in the No Surprises Act.

Additionally, AHA and AMA recently submitted a supplemental brief to the US District Court for the District of Columbia, asking officials to vacate the IDR provisions of the rule. The groups stated that HHS had not accepted the Texas judge’s decision in the TMA case, nor had the department shown any intent to change its interpretation of the No Surprises Act in the final rule on surprise billing.

In addition to the revised guidance for IDR entities on the IDR process, HHS launched an online portal where healthcare providers and payers can initiate the IDR process. Parties must begin the process within four business days after the 30-day negotiation period.

CMS and HHS have also developed a portal where uninsured and self-pay patients can initiate the IDR process related to the good faith estimates policy.