Independent Dispute Resolution Case Load 14X More Than Expected

May 15, 2023 - Nearly a year after the federal government launched the independent dispute resolution (IDR) process under the No Surprises Act, over 330,000 balance billing disputes have been filed, nearly 14 times more than the Departments of Health and Human Services (HHS), Labor, and the Treasury expected.

CMS recently published the status update on the federal dispute resolution process containing the latest numbers on initiated disputes, dispute eligibility, and results of payment determinations. In addition to confirming an ongoing backlog of IDR cases, the update also revealed a high success for initiating parties, which have largely been providers.

From when the IDR portal opened on April 15, 2022, through March 31, 2023, certified IDR entities rendered payment determinations in 42,158 disputes. Parties that filed the dispute — known as initiating parties — were the prevailing party in nearly three-quarters of those cases.

A separate report on the IDR caseload for the fourth quarter of 2022 showed that practice management companies, medical practices, or revenue cycle management companies representing hundreds of individual practices, providers, or facilities filed the most cases. Caseload was also up by 53 percent compared to the previous quarter, the report also said.

The federal IDR process is available to resolve disputes over surprise bills, which typically involve out-of-network payments. The No Surprises Act prohibits surprise bills in most scenarios involving an out-of-network provider treating patients at in-network facilities.

The IDR process continues to face a significant backlog of disputes because disputes filed earlier in 2022 more often required additional outreach and analysis in order for certified IDR entities to determine eligibility, according to the status update.

The status update found that non-initiating parties challenged the eligibility of 122,781 disputes in the first 50 weeks of the IDR process. Of the disputes closed during that period, about 39,890 were ultimately deemed ineligible for the federal IDR process.

But even if the non-initiating party does not challenge the eligibility of the dispute, the certified IDR entity must review and confirm that it is eligible before it proceeds further in the federal IDR process, the status update explained.

“These reviews involve complex eligibility determinations that required certified IDR entities to expend considerable time and resources,” the update stated.

The Departments noted that eligibility reviews are processed faster when both parties provide all information required for the federal IDR process initiation. They have also added data elements to the dispute initiation form to ensure the form covers enough information for certified IDR entities to make eligibility determinations. Parties should also now attach documents supporting or contesting eligibility when initiating or challenging a dispute.

Given the large volume of disputes and the complexity of eligibility reviews, the Departments said they are working to clear the backlog and help certified IDR entities resolve disputes as quickly as possible.

“To help facilitate eligibility determinations, the Departments engaged a contractor and additional government staff to conduct pre-eligibility reviews, which include outreach and technical assistance in support of the certified IDR entities’ eligibility determinations,” the status update stated. “The Departments are also considering additional policy and operational improvements, including through rulemaking, to improve the process for determining the eligibility of disputes and ultimately increase the speed with which certified IDR entities render payment determinations.”

The federal IDR process has experienced several roadblocks in addition to a growing backlog. Providers have encountered issues with understanding the qualifying payment amount (QPA), which is the median contracted rate for a specific service in the same region and is one of the factors certified IDR entities consider when making payment determinations. Providers have challenged the weight certified IDR entities give the QPA, arguing the strategy favors payers. Batching and bundling codes has also led to confusion.